I would like to provide another business tip or business consulting tip regarding the three biggest fears people have when starting a consulting business and how to overcome them.
Probably the number one fear I hear about is job security. Everybody says that they can’t leave their job because they have “job security”.
I am not saying that you should just flat out leave your job without a plan or putting some thought into it, but in many cases you can do things in parallel or on the side to ramp up before you make the jump. That's what I did until I got the boat closer to the dock, so to speak, before I jumped off full time.
The reality is, having one client, (i.e. your employer, with so-called job security), versus having multiple clients and multiple engagements! I've found having multiple clients with the freedom to work with multiple numbers of people and industries is much more secure than having a single employer.
I worked 18 years in a so called secure government or civil service career, and what I actually found, was never ending layoffs, cutbacks, reorganizations, and I was always at the will or the whim of the bureaucracy or organization. Now that I'm on my own and having started 3 consulting companies, I get to control my own destiny and have much more security than I ever did with a single employer.
look at it this way, if that one client fires you, you're toast. But if you have multiple clients and you get fired by one, you still have………multiple clients!
So, it's a mindset that you have to have if you want to start your own consultancy, or consulting firm and don't let that hinder you. Job security is one fear that a lot of people have, but it's really not that big of a deal if you really think about it and shift your mindset from a single client model to multiple client model.
The second biggest fear that I hear frequently is health benefits. Everyone says, well, if I leave my job, I'm not going to have my health benefits or health insurance. The reality behind health benefits is the same as the number three biggest fear, which is retirement!
Both of these issues or fears that people have, are really just a number or dollar figure behind them. Once you look at it like a number and you say okay, I need to reach a certain amount of revenue to cover my health benefits and my retirement. It lessen that fear or issue as you now have a solution or a plan to combat that fear.
Let's say your take home salary is $100,000 a year and with a full retirement and benefit package. Let's say the benefit or health insurance package is roughly $20,000 a year for you and your family and your retirement package is another $40,000 a year.
So what you're really getting in an overall package is $160,000. $100,000 take home salary, $20,000 health insurance package and a $40,000 retirement package, so the net of that is $160,000 per year.
Knowing this now establishes your target or minimum goal that you need to make as a consultant, to be able to match your current salary and benefit package. Health insurance and retirement isn't some magic or mysterious program that only an employer can provide.
Now you do need to make a little higher than that, obviously, because of taxes, overhead and other things but you will also gain some substantial tax incentives and benefits as a small business owner that you do not get as an employee.
The tax code is conducive to small business…..so take advantage of it!
At the end of the day its just a number to you and your employer and should be treated as such when starting and scaling your consultancy. If you're doing it on the side or just starting a consultancy, that's your target number before you jump off the cliff and leave that job and that steady paycheck.
So those are the three biggest fears that I hear from a lot of people and you should be concerned, but at the same time, don't let that hold you back or from keeping you from starting your side hustle or doing something on the side or getting into consulting. I hope you found this helpful and I’d love to connect with you at www.paulklein.net.
You may be interested in my services agreement or contract template that you can download for free called “The One Page Consulting Agreement” You can use it as a template to develop your own.
I’ve used this template to get some of my biggest clients like Cracker Barrel, Taco Bell, Slack and many other great brands that I have worked with over the years. You are welcome to download it for free at www.paulklein.net.
I would love to connect with you and I am on all the usual social channels, LinkedIn, Facebook, Twitter, Instagram and so forth. I’d love to hear more from you and connect with you.