If you are already running a consulting business, excellent! On the other hand, if you are thinking about starting an online business or a consulting business, read on!
Reason #1: Recurring Cash Flow
When you start out trying to build an online business, you’re typically not going to see a lot of money coming in through the door straight away. The reality is that it takes quite a long time to build up your customer base to the point that it can fully support you. Not to mention the expenses involved in starting up (websites, product development, design, advertising, and so on). A lot of start ups struggle to get anywhere because they just can’t generate enough revenue to pay their ongoing expenses (which can get pretty high if there are good developers involved). Then there’s the risk that it may not even end up being profitable which, speaking statistically, is quite likely.
Consulting on the other hand allows you to charge cold hard cash upfront and it only takes a few clients to get started. Your only product is your skill. You don’t need to spend weeks creating something since really, it’s your time that you’re selling (though you shouldn’t pitch it this way — you should sell the result). You can literally start as soon as someone pays you.
Your cost will be low. There shouldn’t be much fixed costs unless you plan on getting a fancy office, full-time receptionist, company car (all of which I would advise against if you’re just starting out). Some avenues for you to obtain clients will include networking, cold-calling, partnering, speaking at events — things that won’t cost you as much. Having that cash flow gives you flexibility and the option to completely start a self-fund online start up without any outside funding.
Reason #2: Product Knowledge
When you have clients paying you to do something, then you know that there’s a need — they’re paying you for it after all! And where there’s a need, there’s an opportunity to develop a product whether it’s an information product, online software, or otherwise for that market. You will see gaps in the market that you can fill. By having clients, you are already many steps ahead of your competition who are trying to develop products for a market that they typically don’t understand. That advantage will allow you to develop income-generating products to add to your business and diversify your sources of revenue later down the line.
Reason #3 Learn and Develop Skills
Whether we like to admit it or not, consultants learn on the job. It’s better to learn on someone else’s dollar than on your own. If you do AdWords consulting for example, you could potentially be spending millions per year in online advertising for your clients. That gives you the opportunity to gain tremendous market insight — about which demographics and locations are profitable for a certain niche, about what kind of copywriting really sells, how to design high converting landing pages. Once you develop these skills, you will be able to enter a new market for yourself much more profitably.