7 Tips for Making the Leap from Employee to Consultant

It may have taken you a day, or a year, or even a decade. But, the decision has been made. You have heard the entrepreneurial call and have decided to transition from employee to Independent Consultant (IC). You are ready to leverage your skill, knowledge and creativity in new ways, and there is only one question – Now what?

Joining the ranks of independent workers is an empowered decision, at any stage of your career. You are taking control of your career path, lifestyle and income. It is an exciting time that is also filled with many questions.

How do you leave your employer? How do you approach your clients? Listed below are seven practical tips that will help you make the transition from employee to independent consultant.

1. Before You Make The Decision To Leave Your Employer, Do Your Research

Find trusted advisors outside of your firm, such as a consultant, that can provide guidance and feedback on your plan in confidence. Your mentors can help you to test and refine your plan, develop your marketing approach and give you the confidence you need to move forward.

2. Make Your Employer Your Client

Many successful ICs began their consulting career with former employers. The employer benefits from working with someone who knows the organization and they receive beneficial knowledge without having to pay a full time salary.

Be honest and clear about what you want to do and how you plan to do it. Will you work a fixed number of hours per week or month? Will you work onsite or remotely? Will your work be for a specific client or project? Be positive about your experience with the company and keep the discussion focused on how your employer will benefit. More often than not, your employer will retain you for at least a transition period if not for an ongoing engagement. The knowledge you have about the organization and relationships within the company are valuable assets.

Don’t forget to find the right contractual way to work. There are cost and compliance headaches in becoming a “1099” or ‘inc-ing yourself.’ You may consider working with a partner employer of record firm that can contract on your behalf with organizations.

3. Beware Of Burning Bridges

As an IC your integrity and reputation will be your most valuable assets. You do not want to do things that will present your employer in a negative light or that will be bad for their business. Do not publicize that you are leaving because you disagree with the company direction, or believe the CEO is unqualified. Keep your transition low-key and free of drama. You can frame the decision as a personal choice, sparked by a desire for more independence or flexibility. Treat your employer like a client by keeping their best interests at the forefront of your actions.

4. Address Your Non-Compete

Non-compete agreements are often non-enforceable for a number of reasons, including specific state law. It is important to know your position but also openly address the non-compete with your employer. You will want to be clear about what you will be doing as a consultant and why.

Let your employer know that you will not solicit your employer’s clients or do or say anything that would be perceived as unethical. If you approach it openly and without confrontation, your employer is more likely to feel part of the process and less likely to spend time on legal review.

5. Go Solo, But Not Alone

As a consultant you are the business and must plan for all the back office details such as health insurance, taxes, billing and invoicing, compliance and more. It is easy to get mired in the details of running a business rather than focusing on your expertise.

A Portable Employer of Record can help to ease the transition from employee to consultant. With a portable infrastructure you remain independent but have the convenience of doing your taxes on a single W-2 rather than managing multiple income sources and 1099s. You will enjoy the benefits of uninterrupted medical benefits, 401(k), professional business insurance and a consistent infrastructure no matter what states you work in or how many clients you serve.

6. Nurture Your Network

Generally, your best source of new business will be your network from your former employer. Most people applaud entrepreneurial pursuits, so don’t be shy about telling them that you’re striking out on your own. Make it a point to develop a special relationship with those you feel can help you in your new business. Remember that networking is a two-way street so look for ways to give back.

Most importantly, be sure to keep in touch with your network. Out of sight, out of mind can happen very quickly. There are many tools you can use to keep yourself visible such as LinkedIn, an e-newsletter, or a regular schedule of contact with key influencers -- the “Let’s do lunch” option! Have something meaningful to discuss to enrich points of contact. It also can be effective to spearhead a group meeting and invite peers who share common skills and career goals.

7. Ask For The Business

Now that you are officially an IC, you need clients.

When approaching clients for consulting work, match your expertise to their needs. Focus on your relevant experience, specialized skills and level of seniority. Many new consultants worry that it will be difficult to gain clients without a track record of success. However, you can use this to your advantage. Be honest about being a new consultant. Let your first clients know that developing good references is important to you and offer them a special deal. Give them a special price or offer a supplemental service. Make the client feel special that they are getting access to highly specialized skills and experience for an introductory rate.

--By Gene Zaino

Gene Zaino is the President and CEO of MBO Partners, a leading provider of independent consultant engagement and compliance solutions that make it easy for independent consultants and their clients to do business.