Exit strategies for consultants: Why independent consulting could be your next big move? | Outsized

Consulting is one of the few career paths known for its exit opportunities. After several years in the field, many consultants begin to look for exit strategies from full-time roles to contract or project-based roles, freelance prospects or entrepreneurship ventures.

From deciding what you’re looking for in your new position to reviewing your options, plotting a way out and forging a new path in consulting can be a confusing process.

Its crucial to know the many exit strategies that can help you navigate this complex transition process effectively

Navigating a complex decision

Before deciding on your next step, it’s important to understand what you’re looking for in your career. Consulting is an extremely broad term that relates to a variety of different industries and positions. The joke in some circles is that one year as a consultant is worth two in any other role.

Before making your exit, it’s important to ask yourself two questions:

1)   What do you enjoy about your field?

Consulting is fast-paced and constantly evolving. Some choose it for the professional growth opportunities, while others enjoy problem solving for customers, making a tangible corporate impact, and the exposure to several different industries and clients. Understanding why you got into this field will help you understand where you should go from here.

2)   Why are you making your exit?

This is a personal question, and the answer looks different for every consultant. Some common reasons full-time employees make the change include:

• Wanting to expand your knowledge and skill sets: Some consultants feel they’ve learned all they can in their fields and begin looking for new challenges. If you’re feeling limited on how much you can grow and develop in full-time roles, independent consulting can allow you to expand those limits
• Craving new opportunities: It’s common for consultants to fall into a niche in their fields. After several years, these niches may feel limiting
• Looking for a healthy work-life balance: Consulting is a field known for its long hours, frequent travel, and burnout risks. Independent consultants often have more flexibility to control their schedules

Exploring your consulting options

Consultants devising exit strategies from full-time to independent roles have many opportunities to consider. Broadly speaking, options include:

Independent (or freelance) consulting:

This could involve freelancing in your niche or expanding into other areas in your field. Some independent consultants find clients through their current networks or take on their former companies as new clients.

Reasons to make the leap:

• Flexibility and work-life balance: As an independent consultant, you choose who you work with and set your own hours
• Earning potential: You’ll be able to set your own rates and can ensure you keep up with market standards

Considerations to keep in mind:

• Increased responsibility: Independent consultants are responsible for finding clients and mitigating financial risk. While your earning potential is higher, you won’t be able to use full-time benefits like medical and paid vacation time
• Running all the departments: As an independent, you’re responsible for accounting, marketing, and administration tasks

Advisory roles

Some consultants decide to transition into an advisory role, either within their company or at another organization. This is a high-level role that focuses on long-term strategy instead of daily operations. Advisors may take on Board of Director positions, and often provide strategic guidance that helps businesses scale in their field.

Reasons to make the leap:

• Organizational impact: As an advisor, you’re able to have a significant impact on a company’s strategy and direction. This type of role is both rewarding and challenging as it encourages innovation and creativity while allowing you to drive tangible results
• Reputation building: Advisors are well-known in their field and carry a level of credibility. Taking on this type of role will position you as a competent leader and open unique professional development opportunities

Considerations to keep in mind:

• Without a strong network and years of relationship building, becoming an advisor may not be possible, as you won’t have anyone to vouch for the value you bring to an organization
• Navigating complex organizational dynamics. As an advisor, you’ll be guiding executive leadership through strategic growth while working with a variety of diverse stakeholders. Some find it challenging to balance differing opinions and mindsets during the decision-making process

Starting a firm

Some consultants leverage their network and skill sets to start their own boutique consulting firm with a team of experts After years in the industry, starting your own business can seem like the next logical step, though it comes with a variety of risks and challenges.

Reasons to take the leap:

• Control and independence: Starting your own company and leading a team of consultants allows you to choose your clients, hand-pick employees and decide on which areas of expertise to explore
• Financial growth and equity ownership: Not only does a firm increase earning potential, it allows you to build equity in your business

Considerations to keep in mind:

• Timing: Jumping in headfirst can be risky, especially in an uncertain economy. Many consultants create a side business first before leaving their companies
• Management responsibilities: Leading a team of consultants can be challenging, especially as your focus remains on selling your consulting services. As an entrepreneur, you have the added responsibility of handling operations, recruitment, and team management

Looking into specific career paths

Consultants can come from a variety of fields and are highly valued in most industries, including management, finances, IT, human resources, legal, and marketing. It’s essential to understand the specific options available for consultants when plotting exit strategies. Companies that regularly hire independent consultants include:

• Corporate organizations: This encompasses Fortune 500 companies, tech enterprises, and banking organizations. These businesses value strategic planning and implementation experience, corporate governance and compliance skills and risk management and mitigation knowledge
• Private equity and venture capital firms: These firms are looking for analytical skills, networking potential and stakeholder management abilities. Experience in financial analysis and due diligence, investment valuation techniques and deal structuring is also useful
• Start-ups: While not all startups have a budget for consulting, some invest in order to support long-term growth. Startups value growth hacking and customer acquisition experience, scalability planning, and project management skills
• Niche consulting boutiques: These firms are looking for extensive industry knowledge and thought leadership experience. They expect consultants to have a deep understanding of niche trends and client pain points. Leadership experience and client relationship management is also valuable for these employers

Creating a strategic transition plan

Creating solid exit strategies is important for consultants once they’ve decided to transition from full-time roles. While the approach will differ based on experience and industry, here are some preliminary steps to take:

Step 1: Leverage your network

As a consultant with extensive experience in your field, you’ve built up a solid network of connections. Reach out to mentors, former colleagues, and key industry contacts to gain valuable advice and gauge which companies have a need for consultants.

It’s also a good idea to attend industry conferences, virtual events, or join online cohorts. This will allow you to build new relationships with decision makers in your industry. LinkedIn is an amazing resource filled with diverse conversations and network building potential. By posting about your expertise, you’ll be able to build your thought leadership credentials while attracting potential clients.

Step 2: Research your industry

It’s vital to fully understand your market before making the transition to independent consulting. During this stage, it’s important to conduct the following research:

• Competitor analysis: This analysis allows you to understand your competitor and how they navigate the market. At this stage, you’ll be doing a SWOT analysis of fellow consultants in your field. SWOT stands for:
  • Strengths: Factors that give a consultant a competitive edge, such as proprietary technology or strong brand reputation
  • Weaknesses: Factors that set a competitor back such as poor marketing strategies or limited resources
  • Opportunities: Factors outside of the competitor’s control that you can use to your advantage. This includes changing market trends or early adoption of new technology
  • Threats: Again, these factors are outside the competitor’s control and can negatively affect your business, such as increased competition and economic uncertainty
• Industry trends assessment: This allows you to understand current industry trends, review new technology used in the field, and analyze any market disruptions that could affect your consulting initiative. For example, if you’re in the venture capital field, your industry trend assessment would include monitoring investment patterns and understanding which emerging sectors are gaining traction in the market
• Analysis of client needs and pain points: Once you’ve identified your target client, it’s important to understand what problems your customers need solved. This can be done by conducting surveys with former clients, scheduling one-on-one interviews with those in your network, and reviewing existing market research reports. Analyzing your ideal client’s goals, challenges, and priorities will allow you to create a value proposition that resonates with your audience

Step 3: Identify skill gaps

Once you’ve pinpointed your ideal client and performed a thorough market and competitor analysis, you’ll have a better idea of any skill gaps you need to fill. For example, if you’re targeting renewable energy investors and you see a growing demand for solar projects that need financing, you may need to learn more about renewable energy financing mechanisms like power purchase agreements and tax incentives.

Understanding what sets you apart from competitors and the value you provide to clients is crucial. To establish your unique value proposition, focus on mastering your specialization and adopting a targeted approach with your clients.

Click here to learn more about how you can laser-focus your freelance offering for success.

At this stage, it’s useful to look into online courses or certifications that can enhance your value proposition.

Leaving with confidence

Exiting from a full-time consulting position can offer growth opportunities, flexibility, and increased revenue potential. Still, the process is often stressful and confusing. It’s important to understand your professional options, identify why you’re leaving, and create a thorough exit strategy before taking the leap.