Ebook: The MBA's Guide to Independent Consulting

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This e-book is for anyone with an MBA who is building a professional services practice, or who is considering establishing one.
If you are a consultant, coach, or advisor and have earned your MBA at a top program, this book is for you. You might be an experienced professional services provider, running your own firm, or you might just be considering taking on a single consulting engagement as part of a transition. This e-book provides helpful tips across the spectrum from neophyte to experienced solopreneuer.
As an MBA myself, I never expected my career to take this turn. Many of us are a little surprised to find ourselves in uncharted territory, especially after years of management training programs, formal mentoring relationships and regular performance reviews.
We recognize that independent consulting is truly the road less traveled by MBAs, who are often, by nature, team players and striving to be part of, and eventually run, large organizations. We want to help you avoid the bumps along the way as you accelerate into a profession that provides more flexibility, intellectual challenge, room for growth and financial upside than nearly any other option out there.

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Ebook: The MBA's Guide to Independent Consulting

  1. 1. THE MBA’S GUIDETO INDEPENDENTCONSULTING
  2. 2. WEBSITE • BLOG • FOLLOW ME ON TWITTER 2IS THIS E-BOOK RIGHT FOR ME?This e-book is for anyone with an MBA who isbuilding a professional services practice, orwho is considering establishing one.If you are a consultant, coach, or advisor and have earned your MBA at a top program, thisbook is for you. You might be an experienced professional services provider, running yourown firm, or you might just be considering taking on a single consulting engagement aspart of a transition. This e-book provides helpful tips across the spectrum from neophyte toexperienced solopreneuer.As an MBA myself, I never expected my career to take this turn. Many of us are a little surprisedto find ourselves in uncharted territory, especially after years of management training programs,formal mentoring relationships and regular performance reviews.We recognize that independent consulting is truly the road less traveled by MBAs, who areoften, by nature, team players and striving to be part of, and eventually run, large organizations.We want to help you avoid the bumps along the way as you accelerate into a profession thatprovides more flexibility, intellectual challenge, room for growth and financial upside thannearly any other option out there.Best of luck, and let me know how your journey goes!Sincerely,Robbie Kellman Baxter
  3. 3. WEBSITE • BLOG • FOLLOW ME ON TWITTER 3ABOUT THE AUTHORRobbie Kellman Baxter is passionate about helpingindependent consultants dramatically increase their revenueswhile staying true to their personal objectives. She has beenrunning her marketing strategy consultancy, PeninsulaStrategies, for over 10 years, working with companies likeNetflix, Yahoo!, and eBay, as well as dozens of private techcompanies backed by a who’s who of the Silicon Valley VCcommunity. After 10 years running her boutique consultingfirm, Robbie was so inundated with requests for advice fromclassmates and acquaintances interested in following in herpath that she committed a percentage of her time to helpingpeople like her thrive as consultants.A lifelong resident of Silicon Valley, Robbie has helped dozens of professionalservices providers, including MBAs, lawyers and physicians, establish thrivingconsultancies that enjoy consistent growth and profitability. Robbie’s clients say shehas a unique and powerful ability to reframe complex, ambiguous situations and tosimplify the decision-making process. Like Robbie, many of her mentoring clientshave advanced degrees from top schools and are used to professional success. Theyfind themselves for the first time off the beaten career path, and come to Robbie formentoring because of Robbie’s own success in building a prominent and successfulconsulting practice (www.peninsulastrategies.com). Robbie has been certified as aMaster Mentor™ by Million Dollar Consultant™ Alan Weiss, whom she credits withbeing a key contributor to her professional success.Robbie’s expertise in strategic marketing helps consultants to quickly build a robustclient pipeline and strengthen loyalty among existing clients. You can reach Robbieat rbaxter@peninsulastrategies.com.
  4. 4. WEBSITE • BLOG • FOLLOW ME ON TWITTER 4TABLE OF CONTENTSMBAs Can Take the Road Less Traveled 5Leveraging the Business School Network 6Independent Consultant ≠ Big Firm Consultant 8Getting Started 9Best Practices: Structuring and Pricing Projects 10Potential Pitfalls: Lessons Learned 11Things to Remember 12Peninsula Strategies’ Getting Started Checklist 13
  5. 5. WEBSITE • BLOG • FOLLOW ME ON TWITTER 5MBAs CAN TAKE THE ROAD LESS TRAVELEDIf you have an MBA from a good program, youlikely have the right set of skills to be a successfulindependent consultant. The value of a consultantis to provide advice and expertise that an organizationlacks. Often the consultant provides a useful wayof framing a challenge or opportunity so that newsolutions become apparent and even obvious. MBAsare trained to think in this strategic way, so this rolecan be very natural. However, consulting is not foreveryone.Most MBAs are used to being part of a team, andchoosing the safe and expected course. While someMBAs go on to become iconoclastic entrepreneurswith groundbreaking new ideas, the vast majority end up in general management roles, oras partners in large professional services and financial firms. So being an independentconsultant can be scary—how will you impress people at cocktail parties?But for the brave ones who takethis road less traveled, there istremendous opportunity to engagewith organizations at key moments,and dramatically improve theirposition in the market, while makinga good living and enjoying the kindof flexibility and self-determinationthat is virtually impossible ateven the very top levels of otherprofessions. Are you comfortabletooting your own horn? Dealingwith peaks and valleys of incomeand stress? Diving into newindustries and challenges andbeing expected to come up tospeed rapidly? Consulting can be agreat transitional role, or a 30-yearcareer, but to be successful, youneed to have high self-esteem inaddition to great professional skills.DEFINITIONS• Coach: works proactively with an individual or team to helpthem achieve a defined goal, making recommendations andassigning tasks to achieve that goal.• Consultant: an outsider who intervenes in an organization’s“business as usual” to assess, recommend and implement.• Contractor: a non-employee who behaves like an employeefor a finite period. A contractor is managed by an employeeof the organization, and generally looks like an employee.• Mentor: has succeeded where the individual wants to succeed,and who agrees to be available on a reactive basis to provideguidance and feedback relating to defined areas.• Solopreneur: an entrepreneur who does not aspire to haveemployees, often someone who provides professional services.• Economic Buyer: a person who can sign the check forconsulting services, without getting additional input orapprovals.• Peer-to-Peer Relationship: a relationship where twoprofessionals see one another as equals, in contrast to arelationship where the client sees the consultant as acommodity or a vendor.
  6. 6. WEBSITE • BLOG • FOLLOW ME ON TWITTER 6LEVERAGING THE BUSINESSSCHOOL NETWORKThe coursework at a strong business school can provide a great framework for consulting. Youknow enough to be dangerous across all of the major functional areas—finance, operations,technology, marketing, sales and HR. Or at least you should, if you were paying attention!But more importantly than the academic knowledge you picked up at business school, yourtwo years provide you with membership in an exclusive, merit-based club. People talk aboutthe “old-boys” club, which usually implies powerful people whose families are social friend,but your fellow alumni are more of a “new kids” club, of people united by admission intoa highly gated program, as well as a shared rigorous academic experience. In addition,unlike college alumni associations, nearly everyone who attended business school works inbusineses—and is likely to be, at some point, either an economic buyer (someone who cansign a check for a consultant) or a source of well-placed referrals.Classmates are the most natural of connections because you probably have shared historyand experiences with them. Over time, these people grow in professional stature andinfluence, but they are likely to remember the study group (and beers) you shared whilestudents. There is a level of trust and understanding in these relationships, which allows youto skip what is often the most difficult task of the independent consultant—establishing apeer-to-peer relationship with potential clients.Even people who are not from the same class can develop a peer-to-peer relationship morequickly than strangers, because of the experience and group membership. Membership inthe same b-school club can be tremendously powerful.Once you have reached out to all the classmates you know, and let them know about yourconsulting business, you need to actively nurture your relationships at your school. You cantake a passive role, attending events and reading school news, but you can also take a moreactive role with your school. There are standard known roles, like class secretary, organizerof reunions, or leader of local alumni association, each of which gives you a reason to contactothers in your class. Many schools have a formal alumni consulting program to connect alumsto work on pro-bono strategy projects. In addition, you can reach out to your school’s staffand sometimes even faculty to offer your services, perhaps offering to run a workshop orteleconference, or getting involved in a new university initiative that might use your skill set.The more you give, the more you’re likely to get. I would caution you to only participate if youbelieve in what you’re doing, and are prepared to work hard and do a great job. Half-heartedefforts will not help your school, nor will they help your reputation.Please note that I am assuming that you care about your school, want to help, and that partof what motivates you is a genuine desire to strengthen the school’s reputation and the tiesamong all alums.
  7. 7. WEBSITE • BLOG • FOLLOW ME ON TWITTER 7Another way to leverage the network is to reach out to faculty for advice. Often facultymembers are interested in the consulting challenges you are facing and are willing to offerfeedback, sometimes for a fee and other times for free. In addition, you may want to exploreexecutive-level courses and workshops provided by your institution—the best consultantscontinue with their professional development and are always trying to learn more.CHECK LIST OF “HOW TO GET THE MOST FROM YOUR BUSINESS SCHOOL NETWORK”J Update the alumni directory to reflect your status as consultant.J Make sure your class secretary knows what you’re up to.J Include the people you know from business school in your LinkedIn network.This includes faculty, staff and students – but only the ones you actually knew.Don’t ruin your credibility with mass outreach to strangers.J Get involved in hosting and organizing alumni events—this gives you achance to reach out to speakers of interest and also to get to know a lot offellow alums. Start with an open heart and a willingness to help, and seewhat happens.J Make a commitment to your organization by stepping into a formal role,as part of your local alumni association, or on a board or committee.J Explore workshops and courses available to alums. Most top schoolsprovide a robust set of opportunities, ranging from teleconferences toterm-length courses designed for the MBA.J Explore corporate networks: Most big employers of MBAs—investmentbanks, consulting firms, consumer packaged goods companies, large techcompanies—have formal networking associations for alums. These can begreat sources of business and of colleagues and subcontractors.J Remember karma. Any volunteer work you do needs to come from a placeof generosity, and a true desire to help your school. If your objectives areselfish, that attitude will come through.
  8. 8. WEBSITE • BLOG • FOLLOW ME ON TWITTER 8INDEPENDENT CONSULTANT ≠ BIG FIRMCONSULTANTMany MBAs spend a few years (or at least a summer) as consultants witha big firm. There is a range of functional areas these consulting firmsserve, such as business strategy, marketing strategy, or technologystrategy and implementation.This kind of experience can be tremendously valuable for anyonethinking about independent consulting. In a big consulting firm, you get exposed to relationshipdevelopment, prospecting for new business, scoping and writing proposals, structuring thework, running a project kickoff, executing on the project, successfully completing a project,and upselling new work. These experiences position you well for starting your own consultingbusiness, and also give you a sense of whether you are cut out for the life of an outsideadvisor—a lone wolf. Even in big firms, the partners are responsible for building their ownbusinesses.In solo practice, everything is magnified. You lose the big brand behind you, the ability toopen doors just by invoking your firm’s name. You don’t have a clear path ahead of you,which can be a blessing or a curse. You need to sell yourself and you need to deliver, andthere’s no one else to blame if things don’t work out. Many people who are successful in bigfirm consulting never successfully make the transition into being solopreneuers.DIFFERENCES BETWEEN BIG AND SOLO FIRMCONSULTINGBig firms can be more appealingbecause of…1. Brand: It can help your self-esteem to be part ofsomething big.2. Income: In a big firm, consultants general have a basesalary on which to rely, in addition to any commissionsor bonuses. When you’re on your own, you’re on yourown.3. Selling: In big firms, inbound inquiries are frequent,and doors open easily.4. Support: Big firms provide terrific support, includ-ing technology, admin and design. On your own, youneed to build your own support team.5. Security: In big firms you get insurance, retirementplans and a steady stream of work, in addition to awell-defined career path.But being a solopreneur can be atremendously satisfying path…6. Flexibility: A solopreneur can choose the hours andlocation of his or her work, and also choose to take onmore or less work over time.7. Control: An independent consultant decides howthe work gets done, and doesn’t have to adhere to afirmwide approach.8. Ownership: Whatever you build as an independentconsultant is yours. You are not an employee but anentrepreneur—and that feels different!9. Possibility: As your interests change, you can explorewriting, speaking, product creation, teaching…allunder the consulting umbrella. The possibilities areendless.10. Impact: When you work on your own, you can seethe impact you make on the organizations of yourclient. Your fingerprints are all over the project, andyou can measure the impact you have made.
  9. 9. WEBSITE • BLOG • FOLLOW ME ON TWITTER 9GETTING STARTEDGetting started can feel daunting. Even if you have been consulting for a while, you may notfeel like you’ve really committed to being an independent consultant. Many MBAs naturallyfall into independent consulting when they are between jobs, as a means of testing a newrole, or helping a former employer with a specific project.But if you really want a big pay off, you have to invest up front. Acting “as if” your consultingpractice will be a big success is often an actual driver of business success.You need at the bare minimum, a website that shows credibility and relevance (See Call Out Box).You need a high quality business card with room and appropriate surface area for makingnotes. You need an office space where you can be productive—at a minimum, a high qualitycomputer, printer and phone line. You need professional advisors—an attorney and accountant,and maybe a bookkeeper and an admin. If you have kids, you need childcare—maybe evenbefore the revenue starts coming in. Remember, you are a highly trained professional, andyou are likely to succeed, if you set yourself up for success.You need business attire. Even if your clients conform to business casual attire, you need todress professionally, and as a rule, you should be one step dressier than your clients. Invest inhigh quality, well-tailored clothes, a good haircut and a statement briefcase or bag.You need professional development.At a minimum you need subscriptionsto general business news, andindustry specific news. You also maywant to take workshops, hire a mentoror coach, buy books on consulting…there are lots of resources out there.The important thing is to considerwhat you would do if you knew thebusiness were going to take off—anddo it.CREDIBILITY AND RELEVANCEAll of your marketing materials are reallyabout establishing credibility and relevance.Credibility means that potential buyers believe that youare a substantial high-quality person and that your firm is asubstantial, high-quality institution. You indicate that you arecredible by showing that you’ve been in business a while,that you have a lot of clients, that you personally have animpressive pedigree, or that you and your firm have wonprestigious accolades. If you are just starting out, yourcredibility will come from your work experience, quotesfrom managers and colleagues, and maybe your roles inprofessional associations.You show your relevance by describing situations wherepeople should call you in, by describing your typical buyer,by providing case studies and through your thoughtleadership on timely topics. Anyone who looks at your homepage should be able to tell at a glance that you are credible,and recognize situations where you would be relevant.
  10. 10. WEBSITE • BLOG • FOLLOW ME ON TWITTER 10BEST PRACTICES: STRUCTURING ANDPRICING PROJECTSBest Practice #1: Know why you’re consulting. A wise colleague told me about the 3Csof consulting: Compensation, Control and Content. Flexibility is a key benefit of being asolopreneur, and you want to make sure that you structure your practice to best suit yourneeds. If you are motivated by earning money, you may want to focus on productizing someof your offerings or taking on subcontractors. But if control is your primary priority, you maystructure your work around local clients, or projects that are low stress. And if you are inconsulting because you are passionate about certain intellectual ideas, you may be highly-disciplined about the nature of the work you take on. Any of these is fine, but it’s important tobe deliberate about how you build your business.Best Practice #2: Set your fees using value-based pricing. My mentor, Million DollarConsultant™ Alan Weiss, taught me early that consultants should price work based on valuedelivered, rather than hours invested. MBAs are not commodities, and you shouldn’t price yourtime as a commodity, even a high priced one. You want your clients to look to you for resultsand achieved objectives, and to pay you for the impact you have on their business. Alwaysfocus on the value you provide, and set your price based on that value. Early in your consultingcareer, you may wish to take on contractor roles, which are often hourly. That’s fine, and canfeel less risky, if also less rewarding, but just make sure you know the difference between atrue consulting relationship and a gun-for-hire hourly relationship.Best Practice #3: Offer options. One key difference between a consultant and a contractoris that a contractor takes direction from the client, while a consultant assesses the objectivesand then determines how best to achieve those objectives. As a consultant, you might havedozens of ways you could successfully achieve the client’s objectives. For example, if myclient wants me to get them from San Francisco to LA for a meeting, I could book them the firstSouthwest flight to LA, or hire a chauffeured limo, or give them a map and a good pair ofwalking shoes. Any of these approaches enables the client to achieve the objective, but withdifferent amounts of effort, cost, and fringe benefits. You might want to give your clients a fewoptions, at different price points and with different trade-offs.Best Practice #4: Set a minimum for true consulting projects, but also provide lower-effortresources for people who are not quite ready to commit to the engagement. The cost toyou of selling, scoping and managing a project does not correlate to the size of the projectitself. Smaller projects are almost always less profitable than big ones, and often end updisappointing the client who pushed for a bargain and ended up with what they paid for.Structure the project for success and price it fairly. Everyone will be happier. One way to avoidgetting into the situation of negotiating on a very small project is to throw out your minimumearly in the discussion—“I’m not sure what this will cost, but certainly $25-50K at a minimum.”Some people might balk, but those are likely the ones who don’t have budget or aren’tlooking at the potential impact of the work. On the other hand, it can be helpful to havelower-priced offerings, which do not require a proposal, such as a half-day brainstorm session,a retainer relationship, a workshop, or even a book.
  11. 11. WEBSITE • BLOG • FOLLOW ME ON TWITTER 11POTENTIAL PITFALLS: LESSONS LEARNEDToo much time wasted, talking to people who can’t sign the check. Just because it canbe easier and more comfortable to talk with gatekeepers, fellow consultants or lower-levelteam members, don’t pretend that you will get business by building such relationships. Theonly way to grow your business is to quickly identify people who can actually make thedecision to hire you, and build peer-to-peer relationships with them. You have the backgroundto make the peer-to-peer relationship happen—you just need to commit.Not investing in yourself and your business, even after you’ve committed to consulting.If you are committed to being a consultant, you need to invest. No one wants to work withan unsuccessful MBA consultant. The investment is actually pretty small, relative to the kindof investment required to establish other types of business. Most of the expenses have to dowith marketing yourself, staying current on your industry, and having some basic tools withwhich to do business. If you are cheap on these areas, it will show. Get a decent computer.Hire advisors to help you grow your business. If you can’t justify even that minimal investment,you probably shouldn’t be a consultant.Refusing to focus on a key area of expertise, and going to market as a generalist. Oneof the things new consultants struggle with most is coming up with a succinct, focused valueproposition. There is no sentence that can capture your full range of experiences and skills,so it is tempting to just say that you can do everything. But the main reason that you shouldchoose a focused area of expertise is that you want to own a position, be a thought leaderand have people immediately think of you when that topic arises. If you are “a marketingexpert,” only people who know you well will reach out, but if you are an expert on marketingluxury goods to baby boomers, your name will quickly become associated with that niche.The bigger the position, the more expensive it is to “own” it.Putting all your eggs into a single client’s basket. Often a single client will take up all ofyour bandwidth. It can feel flattering to be in such demand, and the revenue can be attractive.But this kind of relationship does not help you build a business. You are not growing therange of experiences from which to draw, and you are probably doing more implementingand less advising than you think you are. There’s no shame to being a contractor, but if youwant to be a consultant, don’t try to fool yourself. A true consultant should have at least ahandful of different clients every calendar year. A corollary to this pitfall is neglecting businessdevelopment because you’re too busy delivering on projects.Ready, aim, aim, aim aim, aim…. It’s important to be prepared, and to invest in a website, anoffice where you can get your work done, and maybe even to create some intellectual capitalto serve as catnip for potential clients. But it’s equally important to get out into the marketand start talking to buyers, just as soon as you can. You can always improve your materials, orrefine your positioning, but the best way to build your business is by…having some business.Make sure you talk to people who can buy your services directly and on a regular basis.
  12. 12. WEBSITE • BLOG • FOLLOW ME ON TWITTER 12THINGS TO REMEMBERTO SUMMARIZE, HERE ARE THE KEY TAKEAWAYS:• MBAs enjoy several unique advantages compared to other independent consultants,including a strong network, relevant training, and great resources for continuing educationand professional development.• Often the most challenging thing for an MBA about being an independent consultant isgetting comfortable with taking the road less traveled.• You need to balance the competing needs of running the business of consulting anddelivering consulting services. Your training provides you with the skills for both, but makesure you make time to do both properly.• One of the key benefits of being a solopreneur is the flexibility it provides. Consider the “3 Cs”of Compensation, Control and Content, and make sure your business is growing to serveyour requirements.
  13. 13. WEBSITE • BLOG • FOLLOW ME ON TWITTER 13PENINSULA STRATEGIES’ GETTINGSTARTED CHECKLISTJ Begin building your brand and network before going independent.J Identify your personal objectives—be honest with yourself.J Establish value proposition and positioning.J Identify target buyers, organizations and situations.J Define service offering and use cases.J Develop professional website and business card (do not skimp).J Find mentors and peers.J Develop a support network; consider getting a dog.J Update your network and contact database and begin regular outreach.J Test value proposition with “friendly” potential buyers, and adjust accordingly.J Begin a regular practice of reaching out to economic buyers.J Invest each year in establishing 1-3 programs to build market awareness.J Develop a thought leadership platform.J Offer value wherever you go.J Adjust, add and grow.
  14. 14. WEBSITE • BLOG • FOLLOW ME ON TWITTER 14WHAT PEOPLE ARE SAYING“Robbie’s counsel has been instrumental to the continued success of my business. While mypractice was in its infancy, Robbie coached me on both laying a strategic foundation andestablishing sound nuts & bolts business mechanisms. Now, several years later, my practice isthriving, and I continue to seek Robbie’s perspectives on how to grow while staying true to myprofessional and personal core. Robbie is insightful, honest, practical and generous in sharingher considerable arsenal of best practices. I recommend her without reservation.”LINDSAY PEDERSEN, LCP BRAND CONSULTING www.lcpbrandconsulting.com“Robbie is invaluable as a counselor and coach. In the four years we have worked together, shehas helped me to understand both how to make my law practice run better from a processperspective and how to make myself happier in that practice from a substance perspective.”LIZA HANKS, FINCH, MONTGOMERY, WRIGHT LLP www.familyworks-law.com“Working with Robbie has been an integral part of my success. Her keen intellect and extensivebusiness experience have helped me demystify the process, identify opportunities and finallybegin to make great strides. And on a personal level, it has been tremendously gratifying towork with Robbie. I highly recommend Robbie both as a mentor and as a professional.”PHILIP GUARINO, ELEMENTI CONSULTING www.elementiconsulting.com“I started working with Robbie at a time when I was struggling to find the right focus and futuredirection for my consulting business. Robbie helped me quickly drill down to the root of issuesI was facing, providing clarity and objective, actionable advice. Robbie’s expert guidance wascritical to me as I made an important transition in my business. She encouraged me to sharpenmy focus on key priorities and showed me how to effectively articulate my value. Robbie washighly accessible, generous with her time and a pleasure to work with.”JOELLYN “JOEY” SARGENT, BRANDSPROUT ADVISORS www.brandsproutadvisors.com“As a former CFO of a venture-backed tech company, I was looking for a mentor who couldhelp me quickly translate my success as an operating executive into a significant strategyconsulting practice...Robbie has delivered. She is helping me to structure, sell and deliver onlarge projects for demanding clients, right out of the gate. Our conversations include howto market and position my services for maximum appeal to the C-suite, how to build trustwith clients so that they turn to me for new ideas, and how to scope and deliver projects formaximum value to the client (and ultimately, fees to me). For those looking to rapidly build arewarding and profitable consulting business for the long term, I highly recommend Robbie.”TREY PRUITT, THE BANNER PEAK GROUP www.bannerpeakgroup.com
  15. 15. WEBSITE • BLOG • FOLLOW ME ON TWITTER 15SIGN UP TODAY!Visit us at www.peninsulastrategies.cominfo@peninsulastrategies.com / 650-322-5655PENINSULA STRATEGIESMENTORING PROGRAMIf you want to take your professional service business to the next leveland want a guide to help get you there, our one-on-one mentoringand small-group workshops are for you. We work with a range ofprofessionals including the following:• Consultants• Attorneys• Mental health practitioners (physicians, psychologists, socialworkers, etc.)• Financial advisorsWe can help you remove the blocks that keep your business fromgrowing the way you want it to. Our services include the following:• Private Roster™ Mentor Program• Group workshops, customized for your association• Speeches and brown bag sessions• Jumpstart remote programContact us today to see how we can help you launch your practice—or take it to the next level!

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