30 Nov The Consultancy Paradox

Common sense dictates that any independent consultant should do their absolute best on each and every project. But there’s another way of looking at it in the wake of Brexit that leaves me feeling uneasy.

Call me arrogant, but I believe I’m pretty damned good at what I do. I’ve got a string of happy clients from both before and after I set up as an independent digital communications consultant, I’ve won numerous awards for social media campaigns I’ve devised and activated over the last five years, and (I think) I’ve gained the professional respect of a lot of people I admire.

Put it this way: I’ll take the Pepsi challenge with your current digital media consultant any day of the week!

But as I approach the end of my second year working as an independent professional and reflect on what’s gone well and what’s gone not-so-well, it occurs to me that maybe ‘being pretty damned good’ isn’t necessarily, well, a good thing.

Let me explain.

Educating Yourself Out of a Job?

A large part of my rationale when jumping ship from agency life was formed by observing the industry in which I worked. When I looked around I saw both brands and PR agencies floundering when it came to digital and social media strategy and in desperate need of accurate advice and beneficial experience.

I saw an opportunity to provide them with exactly what they needed without them having the risk of employing someone on a full-time salary. And so I established a service offering set around three pillars:

1. Strategic consultancy (helping with the why and what questions)

2. Best practice training (answering the how questions)

3. Tactical implementation (supporting creative campaigns or specific short-term projects).

My first year of being self-employed went better than I could have imagined. I undertook a series of successful projects and developed working partnerships with agencies that I respected.

I set myself a revenue target that I thought was ambitious, and smashed it. So I went into year two extremely confident and with a mindset to consolidate on year one and to be in a position by the end of 2016 where I’d be doing more of the stuff I enjoy.

It started off well. One of the first projects I undertook this year was helping out Peter Jones’ investment company with some of his Dragon’s Den investments.

However, and importantly, what I never took into account was that as a consultant, and a good one, you’re effectively educating the people you work with on each and every project. Don’t get me wrong, I knew that to be the case, and I take massive pride in seeing the people I work with flourish. But what I didn’t consider was how it would affect my business.

My clients now had strategies outlined that I’d worked on and they could implement; they had best practice working processes that they could replicate; I’d trained them in the ways of The Force and they became more and more confident in social and digital media. To the point where they no longer needed me, or employed someone to take on the new work they were getting on a full-time basis.

In more than one instance, being a good consultant has cost me a longer-term job. And therein lies the paradox of working as a consultant.

Be good at what you do and you have to accept that you need to find lots of new work on a regular basis. Be average and you’ll probably have clients for longer, albeit perhaps less happy and less successful ones.

Doesn’t really seem fair, does it?!

Scaling Business as a Consultant

The counterpoint is perhaps that success breeds success. Pretty much all of my business until a few months ago came from referrals. I never had to worry about marketing myself (think of the chef who eats baked beans from a tin at home…) as work came to me.

It was fantastic, if I’m honest. And it was great while the world was on a level plain. But then, a few months back, things started to change. You see, there are certain things that as an independent consultant, you can control:

– You can control when and where you work.

– You can control who you work with and what projects you work on.

– You can control how many projects you choose to take on.

– You can control how much you charge.

But there are other, external factors that you can’t control. I’m looking at you, Brexit.

The theory goes that the better you become at your job as a consultant, the more value you add and the more you can (and should) charge for your time. Given you only have a certain number of hours in any given week, increasing your rate is how you scale your business and increase your revenue.

Agencies, on the other hand, simply employ more people in order to take on more work and make more money as they grow.

Scaling through charging more is all very well until something like Brexit comes along. But when the bottom falls out of the economy (OK I exaggerate, but not by a huge amount) at a time when organisations are still teetering carefully out of years of financial uncertainty and austerity measures, companies are less willing to spend on external consultants.

Less Work + Increased Competition = Lower Rates

The Association of Independent Professionals and the Self Employed (IPSE) says that “the number of self-employed marketing professionals has more than doubled since 2011”. There’s been and continues to be a big trend towards freelancing and consultancy, and that’s great when everything’s going well.

But when budgets are being tightened and the value of everything is questioned due to economic uncertainty and a Pound that’s in freefall, there’s not so much work to go around. Overnight (and I do mean ‘overnight’ in the case of Brexit), projects are put on hold or cancelled altogether and those all-important referrals dry up.

And pretty much the only thing you can do to counter that as an independent consultant is to drop the rate you’ve spent months and years carefully cultivating and protecting. It’s the agency equivalent of making people redundant, and it sucks.

Case in point: I recently had no less than ten new projects in the pipeline at one time, all from companies that had approached me over the summer. Ten! Since I set up two years ago I’ve only ever had a maximum of three, maybe four, at once.

Do you know how many of those projects have actually see the light of day? As I write this, just one very small consultancy project. I have a couple of other meetings coming up, but the rest have simply not materialised, generally due to “budget reviews”.

Maybe I’ve been impudent or complacent by sticking to my guns and refusing to compromise on my rate (so far)? And maybe the outlook would be different if I played the race-to-the-bottom game?

In the words of Oasis, definitely maybe.

One thing I can say with certainty, however, is that if you want to know whether Brexit is impacting people on the ground, ask freelance marketers.

(Thanks again to those who voted Leave. Love you x)

The Future for Consultancy

2017 will be a very interesting year when it comes to the freelance sector. I can’t help but think there’s a shake up coming, but how that will play out I don’t know. More work for independent consultants as organisations, and maybe agencies, downscale their in-house teams? Or less, as those same companies try and make do with what they have?

It could go either way. I fear the latter.

But in the meantime, I know an exceptional digital and social media consultant who’s got some capacity to take on new projects! I’m currently booking training courses into January and February, and am on the hunt for new projects and partnerships.

If you’ve got an existing requirement or would simply like a chat about how we might work together, email me at paul@paulsutton.co or call me on 07533 026066.