THE MBA’S GUIDE TO INDEPENDENT

CONSULTING

WEBSITE • BLOG • FOLLOW ME ON TWITTER 2

IS THIS E-BOOK RIGHT FOR ME?

This e-book is for anyone with an MBA who is building a professional services practice, or who is considering establishing one. If you are a consultant, coach, or advisor and have earned your MBA at a top program, this book is for you. You might be an experienced professional services provider, running your own firm, or you might just be considering taking on a single consulting engagement as part of a transition. This e-book provides helpful tips across the spectrum from neophyte to experienced solopreneuer.

As an MBA myself, I never expected my career to take this turn. Many of us are a little surprised to find ourselves in uncharted territory, especially after years of management training programs, formal mentoring relationships and regular performance reviews.

We recognize that independent consulting is truly the road less traveled by MBAs, who are often, by nature, team players and striving to be part of, and eventually run, large organizations. We want to help you avoid the bumps along the way as you accelerate into a profession that provides more flexibility, intellectual challenge, room for growth and financial upside than nearly any other option out there.

Best of luck, and let me know how your journey goes!

Sincerely, Robbie Kellman Baxter

WEBSITE • BLOG • FOLLOW ME ON TWITTER 3

ABOUT THE AUTHOR

Robbie Kellman Baxter is passionate about helping independent consultants dramatically increase their revenues while staying true to their personal objectives. She has been running her marketing strategy consultancy, Peninsula Strategies, for over 10 years, working with companies like Netflix, Yahoo!, and eBay, as well as dozens of private tech companies backed by a who’s who of the Silicon Valley VC community. After 10 years running her boutique consulting firm, Robbie was so inundated with requests for advice from classmates and acquaintances interested in following in her path that she committed a percentage of her time to helping people like her thrive as consultants.

A lifelong resident of Silicon Valley, Robbie has helped dozens of professional services providers, including MBAs, lawyers and physicians, establish thriving consultancies that enjoy consistent growth and profitability. Robbie’s clients say she has a unique and powerful ability to reframe complex, ambiguous situations and to simplify the decision-making process. Like Robbie, many of her mentoring clients have advanced degrees from top schools and are used to professional success. They find themselves for the first time off the beaten career path, and come to Robbie for mentoring because of Robbie’s own success in building a prominent and successful consulting practice (www.peninsulastrategies.com). Robbie has been certified as a Master Mentor™ by Million Dollar Consultant™ Alan Weiss, whom she credits with being a key contributor to her professional success.

Robbie’s expertise in strategic marketing helps consultants to quickly build a robust client pipeline and strengthen loyalty among existing clients. You can reach Robbie at rbaxter@peninsulastrategies.com.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 4

TABLE OF CONTENTS

MBAs Can Take the Road Less Traveled 5

Leveraging the Business School Network 6

Independent Consultant ! Big Firm Consultant 8

Getting Started 9

Best Practices: Structuring and Pricing Projects 10

Potential Pitfalls: Lessons Learned 11

Things to Remember 12

Peninsula Strategies’ Getting Started Checklist 13

WEBSITE • BLOG • FOLLOW ME ON TWITTER 5

MBAs CAN TAKE THE ROAD LESS TRAVELED

If you have an MBA from a good program, you likely have the right set of skills to be a successful independent consultant. The value of a consultant is to provide advice and expertise that an organization lacks. Often the consultant provides a useful way of framing a challenge or opportunity so that new solutions become apparent and even obvious. MBAs are trained to think in this strategic way, so this role can be very natural. However, consulting is not for everyone.

Most MBAs are used to being part of a team, and choosing the safe and expected course. While some MBAs go on to become iconoclastic entrepreneurs

with groundbreaking new ideas, the vast majority end up in general management roles, or as partners in large professional services and financial firms. So being an independent consultant can be scary—how will you impress people at cocktail parties?

But for the brave ones who take this road less traveled, there is tremendous opportunity to engage with organizations at key moments, and dramatically improve their position in the market, while making a good living and enjoying the kind of flexibility and self-determination that is virtually impossible at even the very top levels of other professions. Are you comfortable tooting your own horn? Dealing with peaks and valleys of income and stress? Diving into new industries and challenges and being expected to come up to speed rapidly? Consulting can be a great transitional role, or a 30-year career, but to be successful, you need to have high self-esteem in addition to great professional skills.

DEFINITIONS

• Coach: works proactively with an individual or team to help them achieve a defined goal, making recommendations and assigning tasks to achieve that goal.

• Consultant: an outsider who intervenes in an organization’s “business as usual” to assess, recommend and implement.

• Contractor: a non-employee who behaves like an employee for a finite period. A contractor is managed by an employee of the organization, and generally looks like an employee.

• Mentor: has succeeded where the individual wants to succeed, and who agrees to be available on a reactive basis to provide guidance and feedback relating to defined areas.

• Solopreneur: an entrepreneur who does not aspire to have employees, often someone who provides professional services.

• Economic Buyer: a person who can sign the check for consulting services, without getting additional input or approvals.

• Peer-to-Peer Relationship: a relationship where two professionals see one another as equals, in contrast to a relationship where the client sees the consultant as a commodity or a vendor.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 6

LEVERAGING THE BUSINESS SCHOOL NETWORK The coursework at a strong business school can provide a great framework for consulting. You know enough to be dangerous across all of the major functional areas—finance, operations, technology, marketing, sales and HR. Or at least you should, if you were paying attention!

But more importantly than the academic knowledge you picked up at business school, your two years provide you with membership in an exclusive, merit-based club. People talk about the “old-boys” club, which usually implies powerful people whose families are social friend, but your fellow alumni are more of a “new kids” club, of people united by admission into a highly gated program, as well as a shared rigorous academic experience. In addition, unlike college alumni associations, nearly everyone who attended business school works in busineses—and is likely to be, at some point, either an economic buyer (someone who can sign a check for a consultant) or a source of well-placed referrals.

Classmates are the most natural of connections because you probably have shared history and experiences with them. Over time, these people grow in professional stature and influence, but they are likely to remember the study group (and beers) you shared while students. There is a level of trust and understanding in these relationships, which allows you to skip what is often the most difficult task of the independent consultant—establishing a peer-to-peer relationship with potential clients.

Even people who are not from the same class can develop a peer-to-peer relationship more quickly than strangers, because of the experience and group membership. Membership in the same b-school club can be tremendously powerful.

Once you have reached out to all the classmates you know, and let them know about your consulting business, you need to actively nurture your relationships at your school. You can take a passive role, attending events and reading school news, but you can also take a more active role with your school. There are standard known roles, like class secretary, organizer of reunions, or leader of local alumni association, each of which gives you a reason to contact others in your class. Many schools have a formal alumni consulting program to connect alums to work on pro-bono strategy projects. In addition, you can reach out to your school’s staff and sometimes even faculty to offer your services, perhaps offering to run a workshop or teleconference, or getting involved in a new university initiative that might use your skill set. The more you give, the more you’re likely to get. I would caution you to only participate if you believe in what you’re doing, and are prepared to work hard and do a great job. Half-hearted efforts will not help your school, nor will they help your reputation.

Please note that I am assuming that you care about your school, want to help, and that part of what motivates you is a genuine desire to strengthen the school’s reputation and the ties among all alums.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 7

Another way to leverage the network is to reach out to faculty for advice. Often faculty members are interested in the consulting challenges you are facing and are willing to offer feedback, sometimes for a fee and other times for free. In addition, you may want to explore executive-level courses and workshops provided by your institution—the best consultants continue with their professional development and are always trying to learn more.

CHECK LIST OF “HOW TO GET THE MOST FROM YOUR BUSINESS SCHOOL NETWORK”

! Update the alumni directory to reflect your status as consultant.! Make sure your class secretary knows what you’re up to.! Include the people you know from business school in your LinkedIn network.

This includes faculty, staff and students – but only the ones you actually knew. Don’t ruin your credibility with mass outreach to strangers.

! Get involved in hosting and organizing alumni events—this gives you a chance to reach out to speakers of interest and also to get to know a lot of fellow alums. Start with an open heart and a willingness to help, and see what happens.

! Make a commitment to your organization by stepping into a formal role, as part of your local alumni association, or on a board or committee.

! Explore workshops and courses available to alums. Most top schools provide a robust set of opportunities, ranging from teleconferences to term-length courses designed for the MBA.

! Explore corporate networks: Most big employers of MBAs—investment banks, consulting firms, consumer packaged goods companies, large tech companies—have formal networking associations for alums. These can be great sources of business and of colleagues and subcontractors.

! Remember karma. Any volunteer work you do needs to come from a place of generosity, and a true desire to help your school. If your objectives are selfish, that attitude will come through.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 8

INDEPENDENT CONSULTANT ! BIG FIRM CONSULTANT

Many MBAs spend a few years (or at least a summer) as consultants with a big firm. There is a range of functional areas these consulting firms serve, such as business strategy, marketing strategy, or technology strategy and implementation.

This kind of experience can be tremendously valuable for anyone thinking about independent consulting. In a big consulting firm, you get exposed to relationship development, prospecting for new business, scoping and writing proposals, structuring the work, running a project kickoff, executing on the project, successfully completing a project, and upselling new work. These experiences position you well for starting your own consulting business, and also give you a sense of whether you are cut out for the life of an outside advisor—a lone wolf. Even in big firms, the partners are responsible for building their own businesses.

In solo practice, everything is magnified. You lose the big brand behind you, the ability to open doors just by invoking your firm’s name. You don’t have a clear path ahead of you, which can be a blessing or a curse. You need to sell yourself and you need to deliver, and there’s no one else to blame if things don’t work out. Many people who are successful in big firm consulting never successfully make the transition into being solopreneuers.

DIFFERENCES BETWEEN BIG AND SOLO FIRM CONSULTING

Big firms can be more appealing because of…1. Brand: It can help your self-esteem to be part of

something big.2. Income: In a big firm, consultants general have a base

salary on which to rely, in addition to any commissions or bonuses. When you’re on your own, you’re on your own.

3. Selling: In big firms, inbound inquiries are frequent, and doors open easily.

4. Support: Big firms provide terrific support, includ-ing technology, admin and design. On your own, you need to build your own support team.

5. Security: In big firms you get insurance, retirement plans and a steady stream of work, in addition to a well-defined career path.

But being a solopreneur can be a tremendously satisfying path…6. Flexibility: A solopreneur can choose the hours and

location of his or her work, and also choose to take on more or less work over time.

7. Control: An independent consultant decides how the work gets done, and doesn’t have to adhere to a firmwide approach.

8. Ownership: Whatever you build as an independent consultant is yours. You are not an employee but an entrepreneur—and that feels different!

9. Possibility: As your interests change, you can explore writing, speaking, product creation, teaching…all under the consulting umbrella. The possibilities are endless.

10. Impact: When you work on your own, you can see the impact you make on the organizations of your client. Your fingerprints are all over the project, and you can measure the impact you have made.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 9

GETTING STARTEDGetting started can feel daunting. Even if you have been consulting for a while, you may not feel like you’ve really committed to being an independent consultant. Many MBAs naturally fall into independent consulting when they are between jobs, as a means of testing a new role, or helping a former employer with a specific project.

But if you really want a big pay off, you have to invest up front. Acting “as if” your consulting practice will be a big success is often an actual driver of business success.

You need at the bare minimum, a website that shows credibility and relevance (See Call Out Box). You need a high quality business card with room and appropriate surface area for making notes. You need an office space where you can be productive—at a minimum, a high quality computer, printer and phone line. You need professional advisors—an attorney and accountant, and maybe a bookkeeper and an admin. If you have kids, you need childcare—maybe even before the revenue starts coming in. Remember, you are a highly trained professional, and you are likely to succeed, if you set yourself up for success.

You need business attire. Even if your clients conform to business casual attire, you need to dress professionally, and as a rule, you should be one step dressier than your clients. Invest in high quality, well-tailored clothes, a good haircut and a statement briefcase or bag.

You need professional development. At a minimum you need subscriptions to general business news, and industry specific news. You also may want to take workshops, hire a mentor or coach, buy books on consulting…there are lots of resources out there. The important thing is to consider what you would do if you knew the business were going to take off—and do it.

CREDIBILITY AND RELEVANCE

All of your marketing materials are really about establishing credibility and relevance.

Credibility means that potential buyers believe that you are a substantial high-quality person and that your firm is a substantial, high-quality institution. You indicate that you are credible by showing that you’ve been in business a while, that you have a lot of clients, that you personally have an impressive pedigree, or that you and your firm have won prestigious accolades. If you are just starting out, your credibility will come from your work experience, quotes from managers and colleagues, and maybe your roles in professional associations.

You show your relevance by describing situations where people should call you in, by describing your typical buyer, by providing case studies and through your thought leadership on timely topics. Anyone who looks at your home page should be able to tell at a glance that you are credible, and recognize situations where you would be relevant.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 10

BEST PRACTICES: STRUCTURING AND PRICING PROJECTSBest Practice #1: Know why you’re consulting. A wise colleague told me about the 3Cs of consulting: Compensation, Control and Content. Flexibility is a key benefit of being a solopreneur, and you want to make sure that you structure your practice to best suit your needs. If you are motivated by earning money, you may want to focus on productizing some of your offerings or taking on subcontractors. But if control is your primary priority, you may structure your work around local clients, or projects that are low stress. And if you are in consulting because you are passionate about certain intellectual ideas, you may be highly-disciplined about the nature of the work you take on. Any of these is fine, but it’s important to be deliberate about how you build your business.

Best Practice #2: Set your fees using value-based pricing. My mentor, Million Dollar Consultant™ Alan Weiss, taught me early that consultants should price work based on value delivered, rather than hours invested. MBAs are not commodities, and you shouldn’t price your time as a commodity, even a high priced one. You want your clients to look to you for results and achieved objectives, and to pay you for the impact you have on their business. Always focus on the value you provide, and set your price based on that value. Early in your consulting career, you may wish to take on contractor roles, which are often hourly. That’s fine, and can feel less risky, if also less rewarding, but just make sure you know the difference between a true consulting relationship and a gun-for-hire hourly relationship.

Best Practice #3: Offer options. One key difference between a consultant and a contractor is that a contractor takes direction from the client, while a consultant assesses the objectives and then determines how best to achieve those objectives. As a consultant, you might have dozens of ways you could successfully achieve the client’s objectives. For example, if my client wants me to get them from San Francisco to LA for a meeting, I could book them the first Southwest flight to LA, or hire a chauffeured limo, or give them a map and a good pair of walking shoes. Any of these approaches enables the client to achieve the objective, but with different amounts of effort, cost, and fringe benefits. You might want to give your clients a few options, at different price points and with different trade-offs.

Best Practice #4: Set a minimum for true consulting projects, but also provide lower-effort resources for people who are not quite ready to commit to the engagement. The cost to you of selling, scoping and managing a project does not correlate to the size of the project itself. Smaller projects are almost always less profitable than big ones, and often end up disappointing the client who pushed for a bargain and ended up with what they paid for. Structure the project for success and price it fairly. Everyone will be happier. One way to avoid getting into the situation of negotiating on a very small project is to throw out your minimum early in the discussion—“I’m not sure what this will cost, but certainly $25-50K at a minimum.” Some people might balk, but those are likely the ones who don’t have budget or aren’t looking at the potential impact of the work. On the other hand, it can be helpful to have lower-priced offerings, which do not require a proposal, such as a half-day brainstorm session, a retainer relationship, a workshop, or even a book.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 11

POTENTIAL PITFALLS: LESSONS LEARNED Too much time wasted, talking to people who can’t sign the check. Just because it can be easier and more comfortable to talk with gatekeepers, fellow consultants or lower-level team members, don’t pretend that you will get business by building such relationships. The only way to grow your business is to quickly identify people who can actually make the decision to hire you, and build peer-to-peer relationships with them. You have the background to make the peer-to-peer relationship happen—you just need to commit.

Not investing in yourself and your business, even after you’ve committed to consulting. If you are committed to being a consultant, you need to invest. No one wants to work with an unsuccessful MBA consultant. The investment is actually pretty small, relative to the kind of investment required to establish other types of business. Most of the expenses have to do with marketing yourself, staying current on your industry, and having some basic tools with which to do business. If you are cheap on these areas, it will show. Get a decent computer. Hire advisors to help you grow your business. If you can’t justify even that minimal investment, you probably shouldn’t be a consultant.

Refusing to focus on a key area of expertise, and going to market as a generalist. One of the things new consultants struggle with most is coming up with a succinct, focused value proposition. There is no sentence that can capture your full range of experiences and skills, so it is tempting to just say that you can do everything. But the main reason that you should choose a focused area of expertise is that you want to own a position, be a thought leader and have people immediately think of you when that topic arises. If you are “a marketing expert,” only people who know you well will reach out, but if you are an expert on marketing luxury goods to baby boomers, your name will quickly become associated with that niche. The bigger the position, the more expensive it is to “own” it.

Putting all your eggs into a single client’s basket. Often a single client will take up all of your bandwidth. It can feel flattering to be in such demand, and the revenue can be attractive. But this kind of relationship does not help you build a business. You are not growing the range of experiences from which to draw, and you are probably doing more implementing and less advising than you think you are. There’s no shame to being a contractor, but if you want to be a consultant, don’t try to fool yourself. A true consultant should have at least a handful of different clients every calendar year. A corollary to this pitfall is neglecting business development because you’re too busy delivering on projects.

Ready, aim, aim, aim aim, aim…. It’s important to be prepared, and to invest in a website, an office where you can get your work done, and maybe even to create some intellectual capital to serve as catnip for potential clients. But it’s equally important to get out into the market and start talking to buyers, just as soon as you can. You can always improve your materials, or refine your positioning, but the best way to build your business is by…having some business. Make sure you talk to people who can buy your services directly and on a regular basis.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 12

THINGS TO REMEMBER TO SUMMARIZE, HERE ARE THE KEY TAKEAWAYS:

• MBAs enjoy several unique advantages compared to other independent consultants, including a strong network, relevant training, and great resources for continuing education and professional development.

• Often the most challenging thing for an MBA about being an independent consultant is getting comfortable with taking the road less traveled.

• You need to balance the competing needs of running the business of consulting and delivering consulting services. Your training provides you with the skills for both, but make sure you make time to do both properly.

• One of the key benefits of being a solopreneur is the flexibility it provides. Consider the “3 Cs” of Compensation, Control and Content, and make sure your business is growing to serve your requirements.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 13

PENINSULA STRATEGIES’ GETTING STARTED CHECKLIST

! Begin building your brand and network before going independent.! Identify your personal objectives—be honest with yourself.! Establish value proposition and positioning.! Identify target buyers, organizations and situations.! Define service offering and use cases.! Develop professional website and business card (do not skimp).! Find mentors and peers.! Develop a support network; consider getting a dog.! Update your network and contact database and begin regular outreach.! Test value proposition with “friendly” potential buyers, and adjust accordingly.! Begin a regular practice of reaching out to economic buyers.! Invest each year in establishing 1-3 programs to build market awareness.! Develop a thought leadership platform.! Offer value wherever you go.! Adjust, add and grow.

WEBSITE • BLOG • FOLLOW ME ON TWITTER 14

WHAT PEOPLE ARE SAYING

“Robbie’s counsel has been instrumental to the continued success of my business. While my practice was in its infancy, Robbie coached me on both laying a strategic foundation and establishing sound nuts & bolts business mechanisms. Now, several years later, my practice is thriving, and I continue to seek Robbie’s perspectives on how to grow while staying true to my professional and personal core. Robbie is insightful, honest, practical and generous in sharing her considerable arsenal of best practices. I recommend her without reservation.”LINDSAY PEDERSEN, LCP BRAND CONSULTING www.lcpbrandconsulting.com

“Robbie is invaluable as a counselor and coach. In the four years we have worked together, she has helped me to understand both how to make my law practice run better from a process perspective and how to make myself happier in that practice from a substance perspective.”LIZA HANKS, FINCH, MONTGOMERY, WRIGHT LLP www.familyworks-law.com

“Working with Robbie has been an integral part of my success. Her keen intellect and extensive business experience have helped me demystify the process, identify opportunities and finally begin to make great strides. And on a personal level, it has been tremendously gratifying to work with Robbie. I highly recommend Robbie both as a mentor and as a professional.”PHILIP GUARINO, ELEMENTI CONSULTING www.elementiconsulting.com

“I started working with Robbie at a time when I was struggling to find the right focus and future direction for my consulting business. Robbie helped me quickly drill down to the root of issues I was facing, providing clarity and objective, actionable advice. Robbie’s expert guidance was critical to me as I made an important transition in my business. She encouraged me to sharpen my focus on key priorities and showed me how to effectively articulate my value. Robbie was highly accessible, generous with her time and a pleasure to work with.”JOELLYN “JOEY” SARGENT, BRANDSPROUT ADVISORS www.brandsproutadvisors.com

“As a former CFO of a venture-backed tech company, I was looking for a mentor who could help me quickly translate my success as an operating executive into a significant strategy consulting practice...Robbie has delivered. She is helping me to structure, sell and deliver on large projects for demanding clients, right out of the gate. Our conversations include how to market and position my services for maximum appeal to the C-suite, how to build trust with clients so that they turn to me for new ideas, and how to scope and deliver projects for maximum value to the client (and ultimately, fees to me). For those looking to rapidly build a rewarding and profitable consulting business for the long term, I highly recommend Robbie.”TREY PRUITT, THE BANNER PEAK GROUP www.bannerpeakgroup.com

WEBSITE • BLOG • FOLLOW ME ON TWITTER 15

SIGN UP TODAY!Visit us at www.peninsulastrategies.com

info@peninsulastrategies.com / 650-322-5655

PENINSULA STRATEGIES MENTORING PROGRAMIf you want to take your professional service business to the next level and want a guide to help get you there, our one-on-one mentoring and small-group workshops are for you. We work with a range of professionals including the following:

• Consultants • Attorneys• Mental health practitioners (physicians, psychologists, social

workers, etc.)• Financial advisors

We can help you remove the blocks that keep your business from growing the way you want it to. Our services include the following:

• Private Roster™ Mentor Program• Group workshops, customized for your association• Speeches and brown bag sessions• Jumpstart remote program

Contact us today to see how we can help you launch your practice— or take it to the next level!