December 08, 2000, 9:30 AM — Being an independent consultant has advantages, but it also has significant
limitations. Your business model is simple, and you can operate with low overhead. The
drawbacks? You may be too busy to accept some assignments, and you are limited in the
size and scope of projects you can take on. At some stage of your consulting career,
you may want to consider expanding your business.
Doing so will give you new career growth opportunities, and may also improve your
bottom line. But before you make the leap, realize that this is a complex undertaking
with many repercussions. To be honest, it's a leap I have not made, though I have
considered it at times. To shed some light on the topic, I interviewed some of my
consulting colleagues who have recently expanded their businesses.
The most important first step is determining how you want to expand. There are two
basic models. One is to hire staff as employees. The other is to enter a partnership
with one or more people on a peer basis. Why would you choose one over the other? I
believe the partnership model makes sense if you already have a good relationship with
another professional who is potentially interested in joining you. But I wouldn't go
out and recruit somebody who I didn't know. The partnership model also only makes sense
for a total of two or three partners. Beyond that, the absence of a clear management
structure can make it hard to make decisions. If you want to grow beyond two or three
people, you should probably proceed directly to the employee model. In both cases,
realize that you are going to have a fundamentally different business than your sole
practice. For the remainder of this column, I'll consider the partnership model; in the
next column, I'll examine the more complex case of hiring employees.
Finding a consulting partner is like getting married. Your partner had better be
somebody that you trust and get along with. Need I say that potential partners need to
be highly competent? You should begin with one partner and work with him or her for a
while before even considering other partners. As tempting as it might be to find a
partner who is just like you, that person will not necessarily be the best partner.
Instead, look for somebody who complements your skills. If you are bad at developing
prospects, find a partner who is good at prospecting. If you are detail oriented, find
somebody who is more visionary. However, your partner should share your values, have
the same fundamental philosophy, and have similar perspectives on the market you work
in.
