The transition from technical expert to external consultant is one that many in our profession attempt each year for a variety of reasons, such as being downsized, a desire to control one's schedule, and early retirement, among others. And every year many end their practices, often because they are unable to make enough money to survive. The transition can be difficult or smooth, depending upon the personality of the professional, their level of expertise, their ability to use their network and contacts to identify potential clients, and their ability to identify resources to help them. Two questions that tend to be predominate in the early going among those striking out on their own include, "How much do I charge?" and, "Do I need insurance?"
The former question encompasses the age-old dilemma of charging enough to keep from leaving money on the table but not so much that the fees chase business away or send it to another consultant. Even though most consultants intuitively know that they won't be successful with every proposal, staying in business means being "successful enough." In answer to the rate-setting question, there are probably as many pricing strategies employed by consultants as there are consultants. This paper will attempt to provide some tools for approaching the process of quoting a price to a potential client. Ultimately, the one(s) selected is a very individualized process.
The latter question about insurance is also one that creates a lot of discussion among those considering consulting or just entering the field. Most seasoned consultants understand the necessity of it, even if they didn't when they began their practice. However, what type of coverage is necessary and how much to buy are typical questions that most consultants ask, and this paper will also attempt to provide a general framework for addressing them.