Fire your Boss! The Successful Home Freelancer's Guide

Approaching Consultancy: Understand, Consider, and Address Risks

So, you're ready to take the plunge. Spend a moment reflecting on this definition of consultancy...

-- William Cohen, How to Make It Big as a Consultant, AMACOM, NY, 1985, p. 2.

Reducing Your Risks

As we mentioned above, the transition from a time-and-effort economy to a results economy is a major personal growth experience, inherent in which are a number of risks. How can you reduce these risks?

1. Know what it takes to succeed.

People who succeed in a results-economy believe two things:

1. that they're prepared to rely only on their own ability to achieve financial security


2. that they will never get any opportunity in life unless they have first created value for someone else

Those two considerations identify entrepreneurial behaviour, which applies to any structure -- sole trader, partnership, franchise, or limited company.

2. Try to be different.

Most business strategy comes down to one of two approaches: doing things differently, or doing different things. Few businesses have the luxury of being the only player in a market, so doing things differently will be the only way to differentiate themselves from others in the field. Identifying that area of uniqueness leads to planning and strategic action. Most people recall first and second placegetters in a class and, after that, only those that differ in some way. Few people who are just starting out in business can be number one or two: most have to rely on being recognised for their differences.

3. Investigate your market.

Market and competitor intelligence is vital if you're going to differ meaningfully from the opposition. So get to know as much as you can about those competing in your market. This process must be reviewed constantly: competitors will quickly match those characteristics that previously differentiated your product or service from theirs. Change, therefore, is a constant for any business that realises the need to stand out from the rest.

4. Get the best resources.

People, planning, and equipment make up the important resources you will require. Your accountant, financial planner, and legal adviser will have the information you need on taxation, insurance, investment, and other legal issues like tenancy agreements and restrictions on business activities. A business plan will not only be an invaluable tool for yourself: it's also a requirement of banks and other fund providers. The quality of your office equipment must help to deliver the services you advertise. Quick turn-round time on tasks and projects demands the right equipment and expertise.

5. Develop and maintain a positive attitude.

A positive mental attitude is an essential life quality, especially when you're establishing a new business. "I will", therefore, continues to have a greater effect on the success of businesses than "IQ". Stories of those who have succeeded in their chosen fields identify desire and focus -- "I will" behaviour -- above education and giftedness or "IQ". This "fire-in-the-belly behaviour" leads ultimately to...

• loving what you're doing
• learning new things
• gaining extra energy

6. Be daring, but don't be reckless.

People with entrepreneurial flair who leave the security of employment to venture into their own businesses are sometimes labelled as daring risk-takers. In truth, studies show that successful entrepreneurs avoid high-risk situations. They do choose challenging goals, but they do everything they can to reduce the risks. They usually enter their new venture with an advantage -- they are experienced in the business they intend to start. They are aware of, and seek information on, the risks and potential problems. They remain open to feedback, both positive and negative. They have confidence in themselves and in their ability to make their new ventures work somehow, even if things don't happen as they hope. They work to minimise risk within the confines of their basic aim: meet challenging but not impossible objectives.

7. Heed your own advice.

"The best advice you can take is your own" is the best advice you'll ever receive. Although listening to the advice of respected others is important, the one person with a better understanding of the entire context in which your business operates is you. For various reasons, many people underestimate the value of their own contributions and place greater emphasis on the views of others.

8. Do it!

The most important four letters for people in business are "Do it". Having the best plans, the best advice, and the best intentions are essential qualities; but if you never do anything, nothing will happen. Yet gaining a reputation as a "do-er" is easy -- just do it!

Understanding, Anticipating and Addressing Risk in the Field

We've talked about the personal risks to you in stepping out on your own into your own freelance business or consultancy. But once you do so, you face a whole new range of business risks. Some small firms are endangered by owner-managers being too impetuous and taking risks that the firm can't afford to take. Many others suffer from owner- manager attitudes to risk which paralyse them by making them afraid to take any risks at all. Being in business involves some risk; so do driving a car and getting married.

Astute owner-managers must be able to calculate or estimate whether the risk of doing something new and different is one that the firm can afford to take, or one that the firm cannot afford to take.

Sometimes, when survival depends on doing something different (e.g. changing to a new location, adding a new branch, or taking on a new product), that may be a risk that the firm cannot afford not to take! Doing nothing is often more risky than doing something new and different.

If you want your small business to survive, then, insist Wal Reynolds, Warwick Savage and Alan Williams in Your Own Business, you must understand the various types of risk:

• the risk of being in business
• the risk we can afford to take
• the risk we cannot afford to take
• the risk we cannot afford not to take

They elaborate as follows:

Rules for Business Success

In 'Your Own Business', Wal Reynolds, Warwick Savage and Alan Williams summarise the rules for success in small business as:

• Create and build the business on a real market opportunity (find a niche).
• Identify or create some distinctive competence and convert this into a sustainable competitive advantage.
• Realise that competitive advantage is temporary; the firm will either be extinct or different in five years' time; therefore planning ahead and the search for new opportunities must go on continually; and change must be welcomed.
• Create and improve the firm's image.
• Strive to be the best rather than the biggest.
• Remember that success comes from finding and/or creating opportunities.
• Build on strengths and concentrate effort and resources.
• Recognise the difference between efficiency and effectiveness.
• Be innovative.
• Seek and use expert advice.
• Recognise the various types of risk.
• Avoid being over-dependent on others.
• Get rid of unprofitable and/or unsaleable products and services.
• Manage the firm's resources efficiently and effectively.
• Realise that every business/management decision and action will affect the firm's survival-ability.
• Use time efficiently and effectively.
• Keep good records.
• Regard cash flow as the life-blood of the business.
• Hire the right people, use them and involve them in the business, reward them wisely and get rid of all 'dead wood'.
• Continually update product knowledge and technical skills.
• Regularly review the suitability of the firm's location.
• Learn from errors made and do not repeat them.
• Watch for signs of mental stress and, if these are found, decide on the cause and deal with it.
• Be decisive and assertive -- decide on the best course of action and follow it.
• Believe in yourself and your business.