Eight steps to becoming an independent consultant

The career transition from corporate job to independent IT consultant isn't always smooth. One IT executive-turned-consultant shares lessons she learned during her move.


I decided to move into IT consulting in January 2007 after my position as a divisional vice president of IT with Pentair, a $3bn diversified operating company, was eliminated during a restructuring.

I knew I could bring my experience as a buyer of IT services to my new career and the service I provided to potential clients. In the 10 months I've been working as a consultant, I've learned a lot of lessons that other IT professionals interested in moving from a corporate job to consulting would find valuable.

Becoming an independent consultant is a popular career choice for IT professionals, especially if they are tired of corporate politics or corporate downsizing. IT professionals often view consulting as a relatively easy transition. Though mine has been smooth on the whole, I have made a few missteps as a newcomer to the profession. I share my lessons learned with you so that your transition to consulting goes just as smoothly.

1. Don't disclose your rates until you understand the scope of the engagement

I recently got a call from a client seeking help with an offshore outsourcing project. The client gave me a one-minute overview of her company's needs and asked me to provide my billing rates. I told the client that I was interested in their project but was not ready to discuss rates until I had a better understanding of what she was looking for.

It's a good thing I didn't blurt out my fees when she asked; after meeting with her in person to discuss the project, I learned that her starting point for negotiation was half of my going rate. If I had shared my rates during that initial phone conversation, I would have lost the opportunity immediately. Negotiating consulting rates is a lot like negotiating your salary with a new employer. By slowing down the negotiation process and standing my ground on my fee, I secured the engagement and got the rate I wanted.

Once I knew the client's needs, I was in a better position to explain the value I could bring to the engagement, the rate I should be paid and the reasons for it. Let the client know what they're getting for their money. Remember, you are selling your services and you have to convince the buyer to pay your asking price.

2. Don't overbid

Don't start with a bid for a prospective client's work that's too high because you could lose the opportunity, not to mention your credibility in the market. Start with a rate that you think is fair and competitive and stick with it. Clients respect that approach more than when a consultant starts high and comes down to meet their needs. I know I got turned off when I was a full-time IT executive procuring services from consultants whose rates seemed astronomical to me.

If you're not familiar with market rates, you can ask other consultants what to expect from a particular type of service. Job sites such as Craigslist, Elance, Monster and CareerBuilder that post consulting opportunities will also give you a sense of market rates. Be aware that rates vary by city.

Typically, IT management consulting engagements range from $175 per hour to $200 per hour for independent consultants. Those rates are higher for large consulting firms such as Accenture or IBM.

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