I’ve come to a point in my career that I think it’s time to try working for myself. Any advice for making the transition?
There is a lot to think about and my advice is to concentrate in two areas initially. One, be clear about what you can offer to the marketplace and how you could do that. Two, be ready for the responsibilities of running your own business. The two are different. The first one is about what project management experience you are selling and the approach to doing that. You can consider contracting or consulting. The second is about setting up the business infrastructure to support you, so that’s things like accounting, sales and marketing.
No doubt you are already fairly clear about what type of offering you have for the marketplace. This tends to be based on your recent experiences and could be managing similar projects, setting up things like PMOs or if you’re thinking about consulting in project management, what business challenges you can solve. If you’re not clear yet, keep researching until you do.
It’s worth spending time really thinking about the method – should you contract or consult? There are differences, for example, when there is a clear requirement, i.e., a need for a short-term project manager to deliver an IT infrastructure project, organisations tend to use contractors to fulfil this need because they know what they are looking for. When the requirement is not so clear e.g., it’s a new technology or product related project and the organisation is unclear on what is required, organisations will look to engage with an expert, in this case, a consultant. It’s popular at the moment for a consultant role in project management to mean someone can advise and deliver. The consultant can work with the organisation to get to the point where the requirement is clear and then deliver it on their behalf.
Pursuing the consultant route will mean you have to build and maintain your intellectual property (IP) i.e., what is it that organisations are buying from you. The position requires credibility and experience because the role is much more visible within an organisation. Potentially you could be working multiple assignments at any one time as consulting engagements rarely require full-time commitment. The way you are rewarded could also vary – some engagements are payment on results, others day rate. In pursuing the consultancy route your skill set also has to incorporate both project management expertise and consulting skills so your current development needs may need to be addressed. The consulting route may be more difficult but the rewards potentially greater as you build a sustainable business.
Contracting, however, is much easier to get started in. Contract project manager roles are widely advertised so if you have experience in an area that is popular with lots of organisations, it will be easier to gets things up and running. You’ll be working 5 days a week, charging a day rate, concentrating on delivering a single assignment and then moving on to the next job.
Contracting or consulting? It’s a personal choice based on many different factors like what you think you are capable of; how long you’re able to spend setting up a business without an income, whether you have an offering that suits consultancy.
Whatever method you choose, you will still need to attend to small business matters. It can be easy to neglect the actual running of the business – getting invoices paid, marketing for future opportunities, paying taxes, setting up insurances etc – when you are out there delivering your services. You need time to start your new venture which will mean no income for a while. This is one of the main factors that make people hesitant in starting out on their own, so it might be worth thinking about what nest egg (three to six months’ salary?) you may need to make you feel comfortable and confident in getting started.