Let’s start by setting the ground rules for this post. I’m not going to sell you a bullshit course at the end, or at any point in this post. I’m not going to sugar coat things. I’m not going to give you a step-by-step guide to setting up an LLC. You can Google that.
I also don’t honestly believe everyone can pull this off. My guess is <1% of people who read this post will come anywhere close to hitting $174K on the side. The reason: because it’s a fuck-ton of work.
This past year has been extremely difficult. What I describe below isn’t fit for someone looking for a “four hour work week.” It might set you up for that, which is what I’m trying to do, but you won’t work four hours a week as a consultant.
You are also more than welcome to criticize this post. I won’t engage with you in the comments unless you show total invoices above $100K in the past year. If you are an “wantrepreneur” who hasn’t actually done anything, please know your opinion holds no weight on this website.
Ground rules set….let’s get started.
If you want to be an entrepreneur, then you should start by being a consultant. If you want exposure to a lot of different companies and business problems, then you should be a consultant. Or, if you want to make a lot of money in a “side hustle,” then you should be a consultant.
I just finished my 12th month of consulting (July 2019-July 2020). In total, I made $173,637. Since a lot of people (looking at you dropshippers) post revenue numbers that hide the fact they lost money, I’ll also post my expenses. Total expenses were $15,178, for a profit of $158,459. The margin was 91%.
The other call-out here is I had $54K worth of signed contracts that ended up getting canceled because of COVID.
I also work a full-time job. I did 100% of this work on the side.
My goal for this post is to unpack all of the claims above and answer in more detail. My goal is NOT to sell you a course. I don’t have a course to sell, and I wouldn’t do that anyway.
Instead, by the end of this post, you will know:
Why consulting is different than freelancing
Why you should do consulting (especially if you want to be an entrepreneur)
How to make money consulting
The skillsets you need
The most common questions, and my answers to them.
The best tips I can give you
Tools you need vs. Tools you can skip
It’s going to be a lot so I apologize in advance for the length of this. Read time is ~45 minutes.
Let’s get started
What is the difference between consulting and freelancing?
Right off the bat, it’s important to draw a bit of a distinction between freelancing and consulting. I think there is quite a bit of nuance here, but understanding what that nuance is can be very important.
The reason why is many people tend to conflate the two and view freelancing and consulting as synonyms. I personally believe this is the wrong ideas because it attaches some negative connotations from freelancing to consulting.
When I think freelancing, I think Fiverr. I actually have hired these guys a bunch and they do a great job. In fact, there are a couple of freelancers I hire on Fiverr that complete a large variety of the work for me.
I would argue that this work is not consulting, though.
These guys, and freelancers in general, typically perform a very specific action that is repeated as many times as possible. You could be a content writer, who pumps out words for SEO. You could be a PowerPoint expert who cranks out slides.
While you can make money on this, I think it’s much harder to do.
For one, you will typically only be hired for a limited period of time. Once that specific task is complete, the client leaves. I’ve hired Design_desk a dozen times, but months apart from each other. I don’t continue to go back to them.
There is a bigger reason why being a freelancer is harder than being a consultant.
As a freelancer, you will always be underbid by someone from a low cost of living country
Secondly, casting yourself as a freelancer almost always means you end up specializing in a specific skill that opens you up to a literal world of competition. The reality is that almost any skill today can be learned by anyone in any location.
In other words, the idea of having your “niche” be a skill is bullshit.
A common freelancing skill is WordPress web development. I threw together a quick post requesting help to build a WordPress website for an Amazon Affiliate Marketing site. (BTW: Amazon Affiliate Marketing is a bad business).
INSERT PICTURE OF UPWORK AMAZON AFFILIATE MARKETING REQUEST
As you can see, I received XX applications in 24 hours. I intentionally set the price on this project low for American standards, at $50 for what will probably amount to 10 hours of work.
While this price is low for American standards, someone in Bangladesh, India, the Philippines, or South America could earn a very nice living doing these projects.
Said differently: trying to become an expert at a specific skill is a race to the bottom.
Another example: I got a bid one day from Nairobi to write me 10,000 words of content for $50. The content wasn’t fit for the Ivy League, but you couldn’t tell it wasn’t written by a native English speaker.
Later that day, I was reached out to on Reddit by someone who offered to write the same content for $1,500. He was English and living in London.
Was his content better? Probably.
Was it 30X ($1,500/$50) better? Probably not.
Don’t get caught in a race to the bottom you cannot win.
A freelancer is good at a skill, a consultant is good at solving problems
The last section, I talked about how freelancers tend to focus on a specific skill. Instead, you should focus on being good at solving a particular problem for a client.
Solving a problem is more valuable for clients and for you. For one, clients pay more for you to solve their problems because they are exactly that…problems.
Successfully compelling Behavioral Design requires a variety of skills to be complete; so does lead magnet, paid social, scenario planning, and more.
These highest paying gigs typically boil down to consultants being able to do three things, in order:
Form a hypothesis about the situation taking place
Conduct analysis to prove or disprove that hypothesis, leading to insight
Distill and report back that insight to decision-makers
In other words, it’s a process that combines different skillsets instead of focusing on one particular skillset.
My consulting work typically follows this exact process
I do most of my consulting work for billion dollar funds and Fortune 500’s. One recent project I did was for a Fortune 500 who kept dealing with distribution issues. That was their problem. My job was to figure out what caused the problem.
I formed a hypothesis about what it could be, built internal relationships, and requested access to dozens of different data files
I combined these disparate data files into a master data file and ran a significant amount of analysis on the data to identify the issue. My initial hypothesis was wrong, but the data revealed the true issue
I built summary presentations that highlighted the issue and possible solutions to fix
Overall, that project required a fair amount of skillsets to complete. It wasn’t “freelancing” on a specific topic, but pure consulting that solved a problem. All in, I believe that project was $30K, or 3,000 WordPress Websites for $100.
I’d also argue that anyone with Excel could complete this project. The trick is reframing yourself as a consultant instead of a freelancer.
Now that we’ve talked about that distinction, now let’s talk about why you should do consulting.
Become a consultant before you become an entrepreneur
They were all started by at least one consultant turned entrepreneur.
My goal is not to be a consultant forever. I’m working on a legit business now, and I feel significantly more prepared than I would have otherwise.
While there are doubtless hundreds, if not thousands, of counterexamples of failed consultants turned entrepreneurs, there are a lot of really good reasons why you should start off your entrepreneurial journey as a consultant. These reasons are laid out below and hopefully make it a lot easier for you to end up becoming a successful entrepreneur.
Starting a consulting firm is the easiest entrepreneurship you can imagine
There’s also research about how second time founders are more successful than first-time founders. The standard hypothesis is that second-time founders now have experience and “points on the board” that allows them to make better decisions. I’d also argue that second-time founders are more confident and feel more comfortable operating in the ambiguity of a startup.
Take the free points off the table then and make yourself a second-time founder by successfully starting a consulting firm for a few years first. It’s the easiest startup you can possibly imagine.
Here are just a few of the advantages a consulting firm has:
You can get started in less than a week.
The startup cost is measured in the hundreds of dollars range.
You are almost guaranteed to be profitable.
Jay has a really interesting Twitter account I keep an eye on. Check out his tweet here: he’s right
A standard startup would kill for built-in profitability, like an accounting firm or a consulting firm.
You need to learn how to make $10 before you can make $10M
A common problem first-time entrepreneurs often have is the “pie in the sky” dreams. Everyone dreams of taking the G650 to the Super Bowl, but no one wants to think about grinding away to make just a few dollars.
It’s the desire to skip to the end of the book instead of reading every page in the long story. It’s totally reasonable. Hell, I know what house in Chicago I’ll buy when I have unlimited cash.
But the reality is, most of those who dream of the $10M+ payday because it seems not possible. They won’t even know how to get started.
If you are willing to put in the grind and figure out how to make $10, then you are on the right track. Then you can figure out how to make $100. Then $1,000. Then $100K. And so on.
A consulting business is a very low-stakes way to learn how to make the $10. Making money is a skill. Learn how to get started by starting to make some cash.
Work through your underprice phase
Every entrepreneur goes through a phase where they underprice their work. They work like a dog for a low rate, then end up raising prices and realize a few things. Clients don’t leave, new and better clients arrive, and life improves dramatically.
You want to get this out of your system as quickly as possible.
When I first started consulting, I charged $40 an hour. Then, $75. Then, $125. Now, I’m $250 an hour for my clients.
Now that I’m building a business, I’m starting off at a higher price right off the bat. It’s going to make that business a lot easier to launch.
Discover business opportunities
One of my favorite companies is Kinsta. They manage the hosting for this website, but they also have a phenomenal blog that covers a wide variety of topics. One of my favorites is how they grew to their first 1,000 customers.
They started off providing consulting services in the form of web design. However, they kept on having clients ask for a managed hosting solution that they realized there was a huge opportunity there. They took that learning and built a multi-million dollar business without a dime of venture capital money.
I’m starting to build a business now. The idea for my business came from a recognition that a particular industry keeps on trying to hire consultants to handle a specific action that I can build software around.
Start in consulting, identify a market gap, and then shift to full-on business model
How to make money consulting
Thus far, we’ve covered the difference between consulting and freelancing and why you should get into consulting. Now, let’s dig into the details of how I made that money.
In this section, I’ll split out the year into quarters and discuss each quarter specifically in terms of how much I made and what I did to make that.
Month 1-3: Getting Started
Insert graphic here on what I made, where I got clients
As you can see, I made $13,185 over the first three months with the amount increasing each month nominally. In practice, this was a couple of grand a month to figure out how this “making money online” thing works.
How I found clients
There a lot of different platforms out there: UpWork, Catalant, Freelancer.com, Toptal, Talmix, Graphite, and more.
Some are more expensive and exclusive than others. For example, Toptal regularly advertises how they only accept “the top 3%” of freelancers. UpWork pretty much takes anyone onto their platform, your abilities be damned.
I strongly recommend you start with UpWork. While it makes sense to eventually move upstream to more expensive platforms (read: platforms you make more money), it’s important to recognize that you have a much wider room for error on UpWork.
If you screw up an UpWork project, it’s a bummer. If you screw up a project on Talmix, I doubt you’ll find another one because the platform will blacklist you. UpWork is definitely the place to have a trial and error period here.
How to overcome the reviews issue on UpWork
A common complaint online is that it’s difficult to get roles on UpWork without any reviews on your profile.
If you are pitching on a project where the client has a ton of time, then of course you won’t win the project compared to someone who has a perfect review score. Instead, search for projects that include words like “Immediate”, “ASAP”, or “Today” in their description. These clients will care more about your ability to deliver immediately than your lack of review scores.
Land 5-10 of these projects and you’ll have a review score in two weeks, then you can start expanding out to projects that don’t have the same immediacy requirement.
How I pitched on projects
One person that played a big role in this for me is a dude named Lex Deville. He is a smart dude that really helped accelerate things for me on UpWork.
I wrote a whole piece on how to pitch projects on UpWork, which you can read, but I’ll summarize briefly here. This advice is coming from someone who has now both been hired and hired a lot on UpWork. Below that, I’ll post the exact script I use when applying.
Most UpWork applications have two fatal flaws. The goal is to stay away from both of those flaws.
Flaw #1: Not Personalized
When I hire on UpWork, at least 80% of the applications are generic bullshit. There is nothing specific about my job application or process. Instead, it’s all a bunch of text that does nothing to tell me as the hiring manager that you actually read the job description.
Needless to say, I have never hired anyone with this kind of application.
Flaw #2: Selfish Applications
When I first started applying for gigs, I had a fairly consistent approach. I would write about how I was excited about the job because I was really good at what they were asking me to do and that I thought I could do a great job and that they should hire me.
See the problem?
In that approach, I’m entirely focusing on what I can do. Clients do not give less of a shit. Clients care about what they will get out of hiring you.
Instead, focus exclusively on the client. Talk about what they are looking for and make an assumption about why they are looking for it. Only then should you talk about yourself.
My actual UpWork ‘script’
Sounds like you are looking for (repeat what they said in the job post. Preferably, you need (the end result for why they are hiring you. Likely something along the lines of making a decision)
I specialize in this type of work, typically for (insert your standard type of clients) My three most recent projects most similar to this one were (describe each project briefly)
I’m happy to share a project I’ve completed in the past to give you visibility of my work.
Can you tell me what would a fantastic result of this project look like to you?
When you work with me, you get transparency and communication daily through the process. For example, I insist on sending you a daily update email on what was accomplished.
If any of this is what you need, please don’t hesitate to contact me. I love to do an introductory call with clients to understand exactly what you are looking for and answer any questions you may have.
PS: Regardless of who you chose, keep my info in case you need someone later. I’m standing by to help
To be fair, i took this pitch from Lex Deville (linked above). Again, he has great shit.
How I spent the majority of my days
The most important thing to understand about this time period is that it’s a volume game. I found roughly 1 in 25 applications would even respond and have a chat conversation with me. Of those chat conversations, maybe 1 in 4 would hire me.
Said differently, I needed to apply to roughly 100 jobs in order to land one.
These weren’t huge ticket, thousand dollar gigs at this point. Most were in the $100-$500 range.
At this point, the majority of my days were spent at my day job. I was fortunate at the time to have a seat in the office where no one could see my screen and that I brought my own computer into the office.
With both of those facts, I could apply to jobs all day long.
I spent most of the day-to-day applying for gigs. The reason why is speed to application matters. Hiring managers start reviewing applications instantly. Since most gigs are posted during the day, you need to be around and applying all day.
Then, if and when you get the gig, promise delivery of the final product for a few days later. That way, you can keep applying for gigs during the day tomorrow while you work on delivering that first sold gig at night.
Again, let’s level-set. You are going to need to spend 70+ hours a week working. It will feel like more than 70 hours though, because you will be ‘on’ for all of it. You’ll be applying for gigs for easily 40 hours a week during the day and then working on delivering those gigs at night for another 30 hours or so.
If you are complaining right now about how 70 hours a week is a lot of hours, then this isn’t the right website for you. Making money on the side is NOT easy. It’s why so few people actually successfully do it.
You need to submit 100 personalized applications a day, and then only after that can you even get started on delivering the work you sold.
Month 4-6: Starting to see some traction
Insert graphic here on what I made, where I got clients
Month 4-6 was starting to get a lot better. I made $59,927 over these three months, and landed my first client above $10,000. That client ended up loving the work and hired me for another $10,000 project
How I found clients
More of the same and a bit of new.
At this point, I had a 100% JSS (Job Satisfaction Score, which is UpWork’s review score) so I was starting to win bigger and bigger projects. I won a project that paid me over $100 an hour on UpWork to help a startup Cannabis company plan out their launch. That project was part strategy, part research, and part Excel. Either way, it was exciting as hell!
I also started branching out of UpWork and trying different platforms like Catalant. Catalant is a separate platform that functions very similarly to UpWork but is for a higher price point and different clientele. While UpWork clients are typically small businesses, Catalant clients are typically Fortune 500’s.
At this point, my revenue was probably split evenly between these two platforms.
The big piece I learned in these three months was how to increase conversion rate. Remember, the last three months meant I had to pitch on 100 projects to win one.
Now, with perfect review scores and high satisfaction levels, I started to see improved response rates. I was now starting to see a response on 1 of 10 applications instead of 1 of 25.
The big learning though was the importance of getting a prospect on the phone to close the deal. When I started having a phone conversation with prospects, I was closing 3 of 4 conversations. That’s an exact inverse of the last section where I was closing 1 of 4
I wrote a whole piece on this but you need to learn how to sell via the phone.
With this increase in conversion rate, I now only needed to pitch on 12 projects to land one. I also was winning projects at a much higher price point here, such as the $10,000+ projects.
How I spent the majority of my day
Once you can reliably sell roughly 1 in 10 projects you pitch on, and they become higher price point, your day changes. I was applying for new gigs maybe part of the day for only one day per week.
At this point, my day job was becoming a lot busier. Since I couldn’t do my consulting work at the office, I had to end up doing it at home.
This point in your consulting career is really critical. It’s either a launchpad up or a quick rejection back down.
At this price point, the bar for quality work is really high. If you can deliver, then great. I can’t actually prove it, but I think these platforms only start to push you to big clients ($10,000+) once they have confidence that you are getting good reviews with $1,000 clients.
If you can’t get good review scores for these bigger clients, however, I think they start sending you back down to lower price point projects.
If you work for any of these platforms, please tell me if the algorithm works differently!
However, my experience was you need the best reviews of your life in this ‘middle rung’ of clients if you want to move to the next level
I realized this effect about halfway through this quarter and doubled down on delivering amazing work here to get these reviews.
How I balanced this with my day job
Straight up hours. I worked the day job for a standard 8-5:30, getting home and eating dinner until 6:30. I would then grind on client work until maybe 1:30/2, go to sleep, then do it all over again.
I’d also work full days on weekends, often going into my company’s office to use it to get work done.
Transparently, I also took a few sick days from my day job to stay home and catch up if I was really behind for my consulting clients.
Again, this is not an ‘easy’ path. You aren’t going to make money like this on the side by doing nothing. This is going to suck a lot of days.
At this point, I started bringing on people to help me with some of the more basic support tasks that could save me time. For example, I had a client that was looking to launch a new mental health app and hired me to help figure out the strategy.
One way I wanted to do that was to understand who else had launched a similar product in the past few years, what they did, and whether or not it ‘worked.’
I could spend a few hours going through Crunchbase to identify ~30 companies, then sit down and dissect their strategy. Instead, I started outsourcing.
I hired a VA on Fiverr from Bangladesh and asked him to find those companies for me. He is $5 an hour (which, at the time of this writing, gives him the equivalent purchasing power of $125/hour USD in Bangladesh. I’m sharing that because I’ve been criticized before for paying “low” rates. I’m paying the equivalent of $125 an hour).
He crushed it, charged me $15 in the process, and I never looked back.
To be clear, I was still working close to 100 hours a week between my day job and consulting. However, the only reason I wasn’t working 120+ hours was because I started hiring this guy every week to help me out with things.
Months 6-12: Building a brand and growing
Month 6 coincided with the winter holidays. From my time at BCG, I know consulting tends to drop down significantly between Thanksgiving and the New Year since so many clients are on vacation themselves and don’t have time to babysit consultants.
I got lucky that my largest project to date actually landed right at the holidays and continued into the New Year. This was for a Fortune 500 doing some strategic planning for a new business unit they were thinking about.
As a result, you can see I made $40,656 over these three months. This works out to $13,552 per month or a damn good full-time salary. Not too bad for the worst time of the year to hire consultants.
How I found clients
Expansion time. At this point, I’m on every platform you possibly think of. Right off the bat, here are platforms that are good sources to solicit work:
Across all of these platforms, it’s hard to go a week without someone reaching out with an aggressive offer to work together. This is fantastic because I can shift almost all of my time away from finding clients at this point. Business development is now a relatively small part of my overall day and week.
The other thing to note here is that clients are now starting to come back. A few months ago, I helped a startup conduct a merger with another startup. As part of that work, I got to meet the boards for both companies by attending a few phone meetings with everyone. I had dialed in to these meetings, said a few things on strategy, and listened on mute for most of the call because I didn’t have a driving role to play in those calls. I actually was on one at the gym if I’m being totally honest.
Well, one of those board members reached out to me just this week. She was impressed with my work last time and wanted to know if I’d be interested in helping her out.
The lesson here is that you always need to deliver good work, even if it’s only speaking for a few minutes on the call. You never know who is listening and what that could turn into.
How I spent the majority of my day
I’m busy these days. I have my day job still and what is now a full-fledged consulting business.
My time is now typically divided into three categories:
Client management: ~40% of the time
Strategy setting: ~40% of the time
Work execution: 20% of the time
Or really, just a fancy way of saying meetings with clients. I typically am on the phone ~3-5 hours a day now with different clients. Most calls are status updates on our projects, some are output reviews on the project, and some are requests for data.
Honestly, I would love to lower this amount of time, optimally by a lot.
Strategy setting & Work Execution
These days, I often don’t do a lot of the actual “grunt work” since it’s 20% of my day-to-day. In this case, I’m defining grunt work as creating tweaks to an Excel model or creating a few different versions of the same PowerPoint slide to report back to clients.
This goes back to the freelancing vs consulting point at the beginning of the piece.
I have offloaded most of the individual freelancing work at this point. I have my guy in Bangladesh, a woman in Pakistan, a guy in India, and a guy in the Philippines all working for me now. It’s a nice team of five of us who work to crush these client deliverables.
The reason for offloading the work is it allows me to focus on the most “thinking” heavy part of the work. This has fit into what I’m calling my “consulting process.”
My Consulting Process Today
Here’s what I mean by that. I had a client who is a venture-backed startup. They are in the Fintech space, and have some growth, but are worried the market opportunity might not be as large as they initially hoped. They hire me on a Monday afternoon to look into the Fintech space. There are no expert calls in this project.
Monday night, I’ll write out detailed instructions to the researcher in Bangladesh. I’ll tell him that I want him to find:
Analyst reports and market reports on the Fintech market
The last 100 startups (complete with links to their websites) of every startup that raised >$10M in the space.
Any recent news articles from reputable sources (typically Bloomberg, McKinsey, BCG) discussing this market
Any datasets (Reference USA is a great one)
The time zones work in our favor here. His day starts when mine ends in America so I go to sleep knowing he’ll handle this work. I have confidence in this because of our time working together. When I wake up, he’s deep into the afternoon and has a detailed Google Drive folder prepared for me that has the initial results from the research. If there is a lot of research, I’ll engage my secondary researcher in Pakistan.
I’ll then go through all this publicly available information and learn more. I’ll begin to understand the market, what is going on, where there are trends, etc. I’ll then repeat this process with my guy where I’ll send him more specific research requests.
By the end of the day Tuesday, I’ll have built a perspective on the market.
It’s also at this point that you are pushing back and saying: “Dean, how can you have a perspective on the market after just a few days?” It’s shocking, but most people do not do the work. I do more work in a few days on research than most do in general.
How many entrepreneurs do you know who have read the entirety of the most recent 10K’s for their competition? Often, it’s zero. I go through dozens.
People don’t put in the work. They pay me big money to put in this work.
If I need to build a model at this point, I’ll again write up detailed instructions for my model builder in the Philippines. He’ll do it while I’m asleep, and then I’ll review it during the day.
Now, it’s readout time with my client. I’ll create the ugliest PowerPoint you have ever seen. I write in a text box the words I want on a slide and how I want it arranged. I’ll then send that to my slide guy in India. He’ll take these ugly slides and make them look beautiful.
All in, I’ve spent roughly $300 on my team here on this project, with ~$40 going to research, $200 going to the model, and ~$50 on the PowerPoint slides.
Again, that’s well above market pay for their areas in the world. They do a fantastic job and I want to ensure they get well compensated for what they do. Working with this team allows me to do the thinking work (synthesized trends across all the research) while they do more manual compilation work.
This model works really well, but I want to provide a brief cautionary point here:
Before hiring a team, you need to be the team
I’ve seen a lot of wanna-be consultants or entrepreneurs try hiring a team too early. They hire someone on Fiverrr or UpWork and then say “build me a model.” The freelancer will then reply, “okay, tell me more” and the wanna-be will say, “Idk, just a model.”
There are three problems with this.
First, you won’t get back the result you are looking for from the freelancer. If you can’t describe it, they can’t build it.
Second, you have no clue the difficulty of what you are asking for. You could be asking for the easiest or hardest thing in the world. Knowing which matters to be fair to your team. When I send my team a request that I know is incredibly difficult (often for the model), I tell them to take their time to complete it and that I’ll pay any price they name. Most importantly, I’ll say thank you and be very clear how grateful I am for them doing this difficult task.
If you don’t know it’s a difficult task and ask for the “model” back in 24 hours, you are an asshole.
This leads to the third problem: the best people won’t want to work with you. The best people can work with anyone they want because they have unlimited demand. If you are a problem, then they can solve that problem by not working with you.
The solution here is to simply be the team before you hire the team.
If you notice above, I write out very detailed instructions to the team. I can do everything my team does for me, which they know because they can tell based on the notes I write out. The guy who builds models for me recently sent me this note after I sent him specific instructions on what I was looking for.
INSERT SCREENSHOT FROM JOHN ABOUT HOW I AM WAY BETTER THAN HIM
Said short, if you are hiring someone to do something that you technically can’t do, then it’s a stupid idea for you to run a consulting firm in this area. I’m hiring to save me time, not hiring to have them do the whole damn thing.
This is a subtle distinction but important.
How I balanced this with my day job
This is going to sound like a broken record here but hours.
Hours tapered off a little bit now that I had a full team in place. That being said, I think I still easily cleared 70+ per week. I installed RescueTime about halfway through this quarter and I ended up averaging about 70 per week there.
The key thing here is that after a year of trial and error, I was able to cut my hours down by over 25+ hours per week.
That is often aligned with the kinds of headlines you see out there: “Get good and hire freelancers and you’ll work 25 hours less per week!”
What is missing from the headline is what I shared above: it took me a year of roughly 100+ hours to get there.
Doing the work, just like reading the actual competitive 10K’s, is a differentiator.
Months 13+: Continued execution
Jumping ahead to present: I’m now more than a year into the consulting thing. Things are relatively consistent, with a relatively good monthly cash flow and crazy margins.
I could try to grow the consulting firm, hire more, and scale-up.
Or I could keep consulting but funnel every free penny into purchasing assets like real estate. If you’ve read anything I’ve written before, you know that my fiancee and I buy a multi-family investment property.
I’ll keep going on the consulting side of things as long as it’s generating enough money that I can flow into cashflowing property.
It will also be helpful to develop my skills even more before I move into actual entrepreneurship.
Now that I’ve gone into detail on how I made this income over the past year, the next section will talk about the skill set you need to make this happen.
The skillset you need to be a consultant
Earlier, I talked about how you should be a consultant before you become an entrepreneur. It’s helpful to read this section with that lens in mind. What you’ll find is that the skills you need to stand up a boutique consulting firm are essentially the same as the ones you need to become an entrepreneur.
There are two key things you need to know how to do if you want to succeed as a consultant: sell, and execute
How to sell consulting work
In my work, I learned you need to get people on the phone for bigger projects. As you saw above, this massively increased my conversion rate. A better conversion rate means less time selling and more working. It’s also a confidence boost. I know I can sell something every other time i pick up the phone. That puts me into a strong position when it becomes time for me to sell something at my next company.
Selling is a transferable skill. If you aren’t raising VC money and don’t have a trust fund, the only money you can get is from customers. You need to sell to do that.
There are three points on selling:
It’s a no brainer, but worth repeating. You need to be the most confident version of yourself on the phone. You need the prospect to walk away confident you can do the job, which means you need to communicate your confidence.
This doesn’t mean be a cocky shit. This means improving your diction. Research says we seem more confident when we speak faster. Remove all “Ums”, “ah’s”, and “likes” from your vocabulary. There are paid solutions here, but you can also do it a lot cheaper if you would like.
I’ll give you an exercise I stole from an old professor of mine back at Wharton. You’ve probably heard of Adam Grant of Give & Take fame. He has his actual students (i.e: me) do a homework assignment where they have to negotiate for something that typically isn’t negotiated on.
For example, go to Trader Joe’s when it’s not busy and grab a banana. Tell the cashier you’d pay a nickel for it and that you’d like to negotiate.
The goal is to get you out of your comfort zone and be willing to look like a fool. Grant spends a ton of time with billionaires and used to talk in class about how they were always willing to look stupid because they had the confidence to do so.
This is objectively ridiculous. She’s worth a billionaire dollars and has no problems making a fool of herself. Most people in her position would run Facebook ads to get followers because she can pay for it.
Instead, she asked random people to follow her instead. That’s why she’s a billionaire and 99.99% of the world isn’t. If she isn’t “too good” to sell, then neither are you.
Every prospect will have a reason not to hire you. Maybe price, maybe timing, or maybe they prefer another consultant. With most prospects, it’s easy to see what their hesitation is.
Don’t shy away from that, but address it
For example, let’s say a prospect is hesitant and keep referencing; they only want high-quality work.
Rather than ignore it, address that. Offer to share a work sample that isn’t under NDA to help alleviate their concern.
If they don’t tell you what their objection(s) is/are, then it’s on you to ask.
Ask the right questions
Every single pitch will end with the prospect asking if you have any questions. You should make sure to ask at least two.
The first question I ask is “what is going to make you so excited you hired me at the end of this project?
This gives you the rubric to understand what the client is looking for. It also communicates to the client that you are fully planning to crush the work.
Take notes on what they say here, then use that exact language back to them when you write the proposal.
The second question is: “what am I not asking about that I should be asking about?”
This is a perfectly open-ended question. It gives the client an opportunity to say something that might be itching at the back of their mind. I’ve closed at least $50K in projects based on impressing clients with this question.
How to execute consulting work
Now that you’ve sold the project, you need to execute the project. There are two things you need to know here: software and hiring.
How to use software in consulting
If you are doing anything that seems even remotely repetitive, then you should be looking for software to do it.
For example, one of my projects involved contacting hundreds of state government officials to ask them some questions about how they thought about a particular tool they use. My client was trying to understand how to improve that tool.
I had hired my researcher to go to hundreds of public websites to find these email addresses—probably $30 total. That’s 6 hours of work, or about half a work day, I saved by investing $30. Spend money to make moneye.
Under better solution, 30 seconds of Googling showed me that Woodpecker is the best Gmail email automation software. I bought a one-month subscription for $49, loaded up the contacts, and wrote the email scripts with dynamic field values.
Woodpecker handled everything else and didn’t destroy my domain in the process since it authentically dripped out the emails.
All in, I spent $79 to save 20+ hours and Woodpecker definitely did a better job that I would have.
Always look for software solutions if you do anything that is even remotely repetitive.
Said differently, the problem you are currently facing in your business (e.g: needing to send out a shit ton of examples in this example) is not something that is unique to you. Many other people will have faced the same problem, and more likely than not, many others have built software solutions to this problem.
How to hire freelancers to outsource consulting
This section will be brief because I wrote a post on hiring freelancers.
In short, you want to hire when you have a consistent task that will take you more than 5+ hours to do but you can write out the description of what you need in less than 30 minutes. In other words, a 10:1 ROI time savings.
When you are ready, go to Fiverr or UpWork. Fiverr will have gigs, UpWork allows you to post jobs.
On Fiverr, chat with top-rated people (4.8 or higher) and find someone who responds to your messages promptly. A lot of freelancers on Fiverr are slow once they get good reviews. Stay awake from those freelancers.
On UpWork, look for someone who has a pitch personal to you. I always embed a question in my job request towards the bottom, something like, how would you complete this job.
insert picture here
Note I didn’t put in a question mark in that question on purpose. The reason why is it makes the question harder to see and only someone who is carefully reading will notice it.
If someone doesn’t answer your question, don’t hire them. If they don’t carefully read a paragraph long job description, why should you have confidence they’ll understand and do the job well, along with being a good communicator with you.
This alone will weed out 90% of applications. Hire someone from the rest.
Phew. That’s a bunch about the skill sets you need to make money consulting. What is hopefully obvious about these is that the skill sets are extremely learnable if you do the work. The question is: will you do the work?
In the next section, I’ll share the best possible tips I can give you to get started and succeed in consulting.
The best possible $10K/Day tips to succeed in consulting
We’ve covered a lot of ground! Hopefully, at this point, you understand why you might want to be a consultant, know the story of how I made it work on the side (answer: hours), and have read the section on skillsets you might need.
In this section, you’ll read the five best tips I can give you. A lot of these were underlying my own story, but I thought it was worth being explicit about these tips.
#1: You are in client services, not “you” services
An ego, attitude, or self-centered attitude is the wrong one to have. As a consultant, your job is to make the client happy. If a client wants to call on Sunday, you pick up the phone. A deliverable not done and due tomorrow? You’re up all night.
It’s about the client, not you.
That’s why it’s often not possible to make this job fully sustainable. It’s why a lot of people eventually leave.
Going in, you need the attitude of “I’m going to make my clients happy” or you won’t really succeed.
I saw a Facebook post in a group recently with an individual proudly stating how she only works 9-5, tells all prospective clients that upfront, and has an email auto-responder on outside those hours saying she’s done for the day to “protect her own time.”
I saw the same person complaining the day before how she couldn’t get any clients. The correlation was completely lost on her. With these problem solivng skills, I highly doubt she delivers anything value-add to her clients in the first place.
To be blunt: that is fucking stupidity and a complete lack of awarenss. Don’t be that person. It’s not about you, it’s about the client.
#2: Raise prices when you can
When you raise prices, you often find
You don’t start losing bids
Your clients get more sophisticated (read: easier to work with)
You make more money.
Raise prices ASAP.
#3: Find your people, treat them well, pay them well. They’ll save you
When hiring freelancers, research what the median cost to live in their city around the world is. Pay them well more than that amount. My team lives in the nicest part of town in their respective cities and countries and I’m damn proud of that.
When your team requests payment, you send it immediately. Waiting to pay it will make them nervous and could prevent a cash flow problem for them. You never know what is going on in their life. Pay them when asked. Pay them earlier than when asked.
Send an unsolicited bonus at the end of the year. I’m sending my team about two months’ salary at the end of the year to say thank you. They don’t expect it, but it is a huge deal to them.
Everything here has been financial, but Dan Pink has made it clear people are most rewarded by being valued and if their work has a purpose. To that end, thank your team profusely. Ask about their families and lives. Wish them a happy birthday. When your researcher gets married and thinks he needs to be back online tomorrow, you tell him you don’t want to hear from him and won’t respond even if he tries.
Be a good person to your team and they’ll be good to you. I’ve had a couple of times where the workload was crunched and things were tight. The team went above and beyond, staying up late and reprioritizing to help out.
#4: Bookkeeping is your friend…
…but taxes aren’t. Your tax time will be a complete nightmare if you don’t have a good bookkeeping system. Set this up as soon as you can, and you’ll regret you didn’t set it up earlier.
You’ll also pay way more in taxes than you realize when there is no job who withholds from you. Nothing makes thee gross to net difference hurt more than your own consulting firm.
These are general, but they’re all tips I wish someone had given me back in the day! Now let’s talk software
The software you should use in consulting
I mentioned the software earlier. There are also a ton of freelancer/consultant targeted software out there that you’ll get targeted ads from at some point.
Here are the ones I think you should definitely use.
It costs $12 a month and, if it helps you get another few hours of work, it will pay for itself for a year.
I used to have one of those @gmail.com accounts and clients thought it was weird/it looked like a scam. It’s a lot smoother now that I have that G-Suite account
Use something to track your books. I’ve paid someone at Bench to track them for me. I now track them myself with QuickBooks since it’s under $20 a month and super easy.
I’ve also heard great things about Bonsai but I haven’t used it. Funny story, I was actually interviewing for a job with them to be a very early employee and pulled out. If I had stayed in, that equity would have been worth a lot. Whoops!
It’s a rule: death, taxes, and needing someone’s email but not having it during a project. Hunter.io is this pretty slick tool that allows you to find someone’s email, or at a minimum, the email pattern at a company (e.g: firstname.lastname@example.org or F.email@example.com, etc.)
It’s relatively cheap when you realize it gets you in touch with people you need.
Back up your computer. Think of this as an insurance policy that costs as much as a cup of Starbucks. If your computer goes down, you are royally fucked.
Regular readers of the case study know that I post my rescue time screenshot daily. Since consulting is difficult and hours intensive, any insight you can get regarding where you waste time and can get time back is worth it.
I’ve had and not had business insurance. It helps me sleep better at night and isn’t expensive. Get it from the start. I use Hiscox
It’s a buzzy startup with waitlist of hundreds of thousands of people long. If you can get off the waitlist and get access, it will save you a ton of time. I recommend trying to get on that waitlist.
Specific Tools as needed
Woodpecker, as mentioned above, is a great example. Get the tools you need to do the job you are trying to do. Spending $200 a month on specific software (about what I pay) is worth it if it saves you just a couple hours.
The software you absolutely should NOT use
You are going to get lots of targeted ads for different softwares targeted at freelancers and consultants. Honestly, I think a lot of them are completely useless and are designed to take money from newbies who don’t realize that they don’t need these software.
The exception to this rule is if you want to scale consulting business past $250K+ a year and do this as your full time job. If you want to make money on the side as a consultant, then you don’t need any of this stuff.
Any sort of website
Building a website doesn’t matter because you won’t get out of Google’s sandbox and no one will find you through SEO. This is just a distraction as you change the font and your logo a dozen times.
Linkedin has quickly become full of posts about how “I used to struggle and now I have 1203 Tesla’s.”
I work with executives all day long. These people laugh at the outreach they get from Linkedin and not hire anyone from Linkedin.
They get hit up a dozen times a day. I promise you won’t stand out.
Any sort of CRM
You won’t have enough inbound activity that you need a CRM. A CRM works best when you have dozens of opportunities that are all high priced. As a consultant doing under $250K a year, you won’t have these.
Any sort of contracting tool
PandaDoc is the obvious one here. I have yet to need my own contract. The reason why is the legal department for most companies will insist you use their standard contract.
Wasting your money and time to create a contract is a rookie move. Most real consultants will tell you that the procurement departments at clients will insist you use their internal one.
Any sort of project management tool
If you want to use Asana/Trello/etc, then you absolutely can. But you don’t need it. I’ve seen a lot of people spent a ton of time setting up a beautiful Monday.com board, only to forget that they need to be pitching on 40+ projects a day to get started.
Any sort of social media marketing tool
Another thing that a lot of newbie consultants waste time on is “marketing themselves.” They think a social media profile or Linkedin account with lots of followers will lead to work. Or, they decide a Podcast would be the best way to “get their name out there.”
I’ve never tried this because I have more work than I could handle. Trying to build a following would have actually cost me money because I’d have to invest time here that would have kept me away from working for projects.
Building a legit following takes years. I only know of one consultant who has successfully done business development via social media marketing. It took them years to do so.
I also only know of one executive who hired a consultant off of twitter. That executive was also fired for being shitty at their job.
Don’t waste your time here.
Let’s now move into an FAQ section
FAQ’s: the most common questions you’ll see online about consulting
I asked a few friends and did some digging on Reddit to figure out some of the most common questions regarding consulting. I tried to answer some of them below, but please let me know in the comments of more and I’ll try to get to all of them
How do I find a niche?
Don’t try to find a niche—pitch on all consulting projects you find and see what sticks. I tend to do a lot of work for private equity firms. I wouldn’t have guessed that when I first started. If I had gone with my initial thoughts on niche, which I thought would be strategy work for Fortune 500’s, I would have lost a significant amount of revenue.
Do I need an LLC?
Yes, absolutely. You are a business and running this as a business. Spend the time to make sure you are doing this right and set one up. I used Legal Zoom and it cost a few hundred bucks. Not having an LLC is, in my opinion, a recipe for disaster. Of course, ask an attorney for their advice and take whatever they say as more accurate than anything I say.
Do I need business insurance?
Again, absolutely. If something goes wrong, it’s going to really suck for you if you don’t have business insurance. It’s worth a few hundred bucks a month. I’ve used another provider but have switched to Hiscox. I have $2M of coverage for $125 bucks a month. Absolutely worth it, and I believe tax-deductible. Again, talk to your accountant and lawyer here and believe anything they say over anything I say.
Do I need a business bank account?
It comes with the territory of having a business LLC: separate your personal from the business. Remember, you are legit now in how you do this, so do it right.
Do I need to sign NDA’s?
Yep, you do. I’ve signed hundreds over the past year and will sign hundreds more. It’s actually a bit crazy how many NDA’s you have to sign.
Unless you are doing aerospace and defense work or biotech/pharma work with IP, I think NDA’s are silly. I’ll still sign them, though, since the market views them as necessary.
How do I compete with other consultants?
If you read this post back through, you’ll see the common thread of hours & putting in the work. I’ve been able to sell so much and secure repeat business because I do both of those things and 99% of my competition does not.
I read the 10K’s. I call 50+ customers to ask them why they like the product. I understand the most recent analyst report and market perspective. Other’s don’t.
If you take the time to do this, you aren’t “competing” with others. You are blowing them out of the water by doing the stuff they aren’t doing. Mark Cuban has talked about how he read the computer manuals cover to cover when he first started while his competition didn’t, and that’s the only reason he built his company.
Peter Thiel is right that competition is for losers. He meant that in the vein of “don’t enter a competitive industry with a new startup.”
I mean it in the sense that your competition is a lot worse at stuff than you give them credit for, and if you do the things you know you should be doing, then you will be successful.
What is the most valuable use of time?
The most valuable use of your time, if you don’t have work, is to pitch on work.
Remember, expect to pitch on 125+ projects per day to start winning some. Don’t stop after a few days, or do 30 pitches, say “fuck this” and create a Buffer account because you need to “get your name out there.”
Sit down and pitch until you have work. You aren’t going to get real work via social media.
What should I do next?
Well, if you’re still here, then thank you for taking the ~40+ minutes to stick with me on this article! I really appreciate your willingness to stick around and I hope this article has been helpful.
If you want to get started, and really are committed to making this happen, then I’d recommend the following as next steps:
Make sure you are truly willing and able to invest >100 hours a week for at least a year. It’s going to suck more than you think it will
If you are willing to do that, then I’d recommend investing a few hundred dollars into an LLC. Set up cheap insurance and
Get signed up for UpWork
Pitch on 125 projects a day, every day, until you start winning some
Keep pitching on more projects, and complete the already won projects at night
Best of luck! I’m happy to answer any questions in the comments