Starting A Micro Consultancy From A Freelance Background

How it works, in practice.

Last week I wrote about the differences between running a micro consultancy and freelance consulting. A reader sent me this question:

Hi Danilo. Thank you for choosing to write about this topic. I've been freelancing for four years now (which I consider an achievement), but would really enjoy getting support to free up some of my time and mind. Can you tell me a little more about how this transition from freelancer to micro consultancy works in practice?

Thank you for the question - and yes, four years of freelancing should definitely be considered a huge achievement. The learning curve is huge and one can never be fully prepared for the unintended consequences of self-employment.

Before we get practical, a reminder: Freelancers are not all the same. I personally know the reader is an independent consultant, who markets and sells engagements directly to executives. What I'm sharing here can also be somewhat helpful for independent contractors. But if you're a "platformer" this is not relevant for you - before you start a micro consultancy, you need to learn how to source work outside demand-aggregation platforms.

With that said, every freelance consultant has a real business - although a very scrappy one. If you did a decent preparation to "leap" you might have started with financial reserves or projects lined up. But they don't last forever. This means you need to learn and perform business development, client work, and administrative tasks, with no one to help you.

This is especially tough for freelance consultants since you need to both sell and deliver work. It's incredibly difficult to do both well and consistently at the same time. When your plate is full, you naturally turn to delivery mode - only to find out there's nothing in your pipeline a couple of months later.

It's the popular "feast-and-famine cycle". Freelance consultants often swing between stress and boredom. Many come to believe it's impossible to break the cycle, and that it's just an inevitability of the self-employed life.

That is obviously false. An unpredictable pipeline is caused by inconsistent marketing. And inconsistent marketing, in the case of most freelancers, happens due to a lack of resources. As a one-person team, you don't have enough time and/or money to keep your marketing engine running all the time.

When your resources are not enough, you need to become resourceful. In practice, the solution usually requires both execution and strategy work. Not only being sales-driven but also designing your practice for sustainable growth. This means:

Direct but incomplete answer: You need to get your revenue closer to $100,000/year (if in the US, adjust downwards for other markets) so you can start investing in the business - hiring support and freeing up your time.

Truly helpful answer for freelance consultants: You need to get to this revenue point without becoming a slave to the business. Most freelance consultants do this by:

  • Using fixed pricing, rather than selling their time;
  • Productizing their most popular service or reviewing their offering mix;
  • Improving their positioning and value proposition to support premium fees;
  • Adopting a boss mindset (shift from working on your business rather than for your business), committing at least one day a month to strategy, processes, and planning.
  • Setting clear marketing and sales KPIs, breaking them into small actions, and keeping track and reviewing them every week to look for improvements.

That's not easy, but it's how it is done in practice. External accountability and advice from someone who did it in the past is also obviously helpful and can save you a lot of time and frustration. This is high-level stuff - specific tactics will depend on your context.

Feel free to drop me a line if you're a freelance consultant interested in getting additional support.

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