Should I set up shop?

Some reflections for our public sector colleagues

By Julian King and Adrian Field

Albert Einstein is credited with saying, “in the midst of every crisis lies great opportunity”. The current round of public sector expenditure reductions and associated job losses in Aotearoa New Zealand are affecting some of our colleagues in roles such as policy, research, evaluation, and communications. These colleagues may now be looking for opportunities amidst this crisis. We know from experience that this is a tough and uncertain time.

Some will find new roles within the NZ government or the private sector. Others may move to Australia or elsewhere, where their experience and expertise will be highly sought after. Some may be considering whether to become freelancers, contractors, or to start their own consulting businesses.

To support those contemplating these possibilities, we thought we’d share a few reflections on our own journeys into consulting and factors to weigh up. While there are many small business and related books available (we recommend four at the end), we offer something more personal here: our reflections on life as self-employed consultants. We hope this is useful to those considering similar transitions.

Our stories

In many ways we both followed similar routes from government and academia into consulting firms and then small-to-medium enterprise (SME) ownership. But there are multiple pathways in. And once in, we’ve each taken different directions as our goals and expertise developed in different ways.

Adrian: I moved from policy to advocacy to academia and back to policy over the first 15 years of my career, before moving to a consulting firm where to my surprise I held down a job for eight consecutive years. But there came a time when the direction of travel in the company and the direction I wanted to focus on didn’t quite align, and we amicably parted ways. That led to Dovetail, initially as a sole practice consultancy for the first few years, followed by a shift to a collaborative network model, and ultimately into the mixed model of a small core Dovetail team with an extended network of partners.

Julian: I moved from policy and health economics into consulting, first working with a large global firm and falling into evaluation, before joining forces with a mid-sized company and finally Julian King & Associates (JK&A) - a company of one, but never alone; my business is built on collaborative relationships.

What we love about it

Owning a business is a journey of self-determination. You decide your purpose and set your own goals, underpinned by your own values. You’re free to define success and growth on your own terms. You can adopt ways of working that fit your preferences and lifestyle.

The variety of work is enormous and offers constant learning opportunities, as well as collaborative opportunities. We get to work with clients and communities who are passionate about their work, who want to understand what has worked well and how to build more value from their service in the future. We get to collaborate with colleagues who share our commitment to making a difference through our work.

You’re not guaranteed a meal, and the possibility of having no work can feel scary. We find this very motivating. We count it on the positive side of the ledger because of the sense of urgency and purpose it brings - you know you’re alive in a way that’s different from a salaried job. Moreover, if you start small and keep overheads low (e.g., work from home, build your own website) you don’t need very much work to keep the lights on.

Julian: As I work from home and don’t have employees, my fixed costs are low. If I engage subcontractors, their fees are variable costs – proportionate to the volume and value of work and only incurred for the duration of a project.

Adrian: As the Dovetail team has grown, the costs of salaries and office space have increased proportionately and this means a higher percentage of my operating costs are fixed costs – incurred regardless of the volume of work we do. I keep an eagle eye on cashflow to make sure we are covering these costs every month.

This project-based way of working has its own job security paradox. It may look and feel less secure than a salaried position but in hindsight, in some ways it’s turned out to offer greater security. As soon as you have more than one contract, your risk is diversified.

You can develop the business as you choose, as your goals and purpose evolve. For example, JK&A’s core services have evolved from a broad base of public policy consulting into a specialisation in evaluation and Value for Investment. Similarly, Dovetail is now very different from the sole practice that began in 2014, and will likely change and flex further in years to come.

We love the freedom that comes with this way of working. But that freedom does have a price. Being in business for yourself can at times be very challenging. We need to acknowledge that this life may not be for everybody.

Challenges

There’s no boss to tell you what to do (or what you can’t do) but there are still demands - and more of them. There are multiple pressures to juggle and they’re all high priority. You have to stay attuned to delivery, budgeting, cashflow, business development, product development, cashflow, meeting legal and regulatory requirements (e.g., contracts, tax, payroll, insurance, health and safety), ethics, and relationships with staff, subcontractors, clients and stakeholders.

And, of course, cashflow. Deadlines don’t form orderly queues. It can be a peaks-and-troughs way of working at times, and when they become constant peaks it can be exhausting.

Did we remember to mention that monitoring and managing cashflow is critical? A bare minimum is a budget for the year ahead and maintaining a spreadsheet that sets out your current projects and expected invoicing and expenses month by month. This is an important part of your process of putting food on the table. Knowing when the gaps are coming means you’ll know when to start filling them (e.g., by delaying an expense or delivering a milestone early).
Despite your best efforts to smooth cashflow, it always wants to revert to its naturally peristaltic state. In our industry, invoices often take 1-2 months to pay (and sometimes longer) so your income lags behind your expenses. To help counter this, negotiate a mobilisation fee (e.g., 20% up front) into new contracts where possible. Beware the Year 2 double-whammy of income tax (for the previous year) and provisional tax (for the year ahead) and plan for it by putting funds aside from every payment.

Stay on top of marketing; in one of life’s cruel paradoxes, when you’re at your busiest bringing a project to completion is also when you need to be at your busiest lining up future work. Blurred work/life boundaries can be a challenge. Navigating this is a lifelong endeavour.

Adrian: I’ve tried to do two things to keep some boundaries. I officially work a 9-day fortnight, although this at times purely theoretical. What I find does work is to block out my Fridays for no meetings, and it allows me to get on top of things ahead of the weekend.

Julian: I’ve found it helpful to define certain parts of the house and times of day as being work/no-work zones. I often take evening Zoom calls, and I balance that with breaks at other times. A successful business is more than just having enough work and delivering – it also provides its owners with opportunities to live their best lives with space for creativity, spontaneity and recreation.

Isolation can be a challenge, but it doesn’t have to be. When the unforeseen or unfamiliar happens, you might (just for a second) miss having a boss to turn to for advice or direction. It’s important to surround yourself with colleagues for mutual support. For example, we’re both members of the Kinnect Group, a professional cluster of six self-employed evaluation consultants, and we all regularly support each other to navigate choppy waters. A trusted network of fellow travellers is one of the most valuable intangible assets you can have as a small business owner.

Opportunities

Today’s gig economy has changed perceptions of what a steady job looks like. In our opinion it’s a great time to be an entrepreneur and portfolio worker. In previous times there may have been a notion that to make it as a consultant you needed an MBA or a couple of CEO roles under your belt, but that’s no longer the case. Consulting is a good option for anyone with a skill set and an idea – and it's never been easier to build a global business from your own home with low-cost online tools.

We both served ‘apprenticeships’ in consulting firms before going it alone, and we think that’s a great pathway to follow – but it isn’t mandatory. Our networks include consultants who specialise in specific roles within evaluation and research projects (e.g., qualitative interviewer, report writer, project manager, etc) and who grew into those roles by subcontracting to more established and experienced consultants. In other words, you can serve your apprenticeship while being your own boss!

When opportunity knocks, answer the door – but the best opportunities won’t make house calls. The best opportunities are the ones you create. We can’t teach you how to do that or describe what yours will look like, but we can confidently say that this journey of discovery will be half the fun.

Success factors

Relationships are the lifeblood of a good business. Don’t confuse this with networking – we aren’t fans of spraying out business cards and elevator pitches to the maximum number of victims, though we’re ready if someone should ask. Genuine, human-to-human relationships built on shared values and mutual trust are intangible assets and essential for business success. Don’t think of sales as something you have to ‘close’ with a conversation. Think instead of relationships that you nurture for their own sake and which, from time to time may deliver work of mutual value.

If you’re already established in a professional landscape, that will stand you in good stead. One of the things we’ve realised in hindsight was that we’d been building our brands and business relationships throughout our earlier careers, long before going consulting. Change processes are hard and there’s often a period of grief that comes with them – but when it’s time to move on, do leave constructively and with relationships intact, as the people who know and trust you may be incredibly helpful in nurturing your business growth.

Consultants are generally hired for three reasons: expertise, independence, or labour. The first of these is an asset, the last two are commodities. What do you want to be hired for? Think about the value you add, not just the things you do. What’s the point of difference you bring that distinguishes you from others? Leverage your expertise – government experience represents valuable skills and knowledge. Be clear about yours and don’t be abashed to self-promote. As a practical matter, look to become registered on the All-of-Government Panel, it’s a key requirement for NZ government agencies taking on consultants.

Don’t be afraid to specialise. The clearer you are about your purpose and what’s unique about your services, the more the right work will find you. When starting out it’s tempting to be the consultant who does everything for everyone, and it’s not easy turning down work, but we suggest it’s worth treating self-employment as an intentional journey toward finding your niche. The more we’ve specialised, the more satisfying the work has become.

Julian: Though I’ve worked in the same company for two decades, it’s been anything but static. My services have become more specialised while my clients and sectors have diversified. I’ve transitioned from leading teams and projects to capability-building. All of my work now has a connecting thread running through it: growing a global network of VfI practitioners and continuously developing the VfI approach in collaboration with this network.

Adrian: Dovetail’s niche is the boutique edge that big firms can’t equal, with a social good orientation, relationship-focused culture, ethic of quality and responsiveness, and a bespoke way of working. All of these make our work satisfying and they have become key points of attraction in our development.

Related to this, develop a business plan. There’s valuable discipline in writing it down even if nobody else reads it. But do ask others to read it and ask for their feedback. Define your services, target market, pricing, how you will discern and choose the right opportunities, what success and growth mean to you and how you plan to achieve them.

Adrian: We take on a wide variety of work, principally but not exclusively in the evaluation space. A key determining factor of taking on an assignment is a social good orientation, acknowledged in our B Corp certification – if the project is just to find ways to sell something, it’s just not the work we do. But if there’s a clear social or environmental purpose, that’s our sweet spot.

Julian: To me, business growth and success have nothing to do with traditional measures like number of employees or turnover; I choose not to employ and I view turnover as something to optimise, not maximise. For me, growth is connected to purpose (disrupting value-for-money assessment) and productivity (creating value from a fixed supply of hours). Success is about discovery (work doesn’t feel like work – it’s an unfolding adventure and I can’t wait to learn what happens next) and harmony (I expect my businesses to enhance my family life, not compete with it). Don’t confuse this with a lack of ambition – it’s harder than making money!

Get a good accountant who asks serious questions of your business and can advise you well. Engage high quality professional services and expect to pay what they’re worth (this advice also applies to lawyers, tradies, and any subcontractors you engage in consulting projects). If you have doubts about the people who are providing professional support to the very thing that is allowing you to pay your mortgage, shop elsewhere. A good accountant will be with you on your journey, help you manage GST and end-of-year returns, and offer good advice on being a businessperson. And get used to the idea of being a businessperson, because that is what you have become!

Renewal is a constant. Not only can you evolve as you wish, you must evolve. Invest in yourself and your company. Professional development, computing equipment and software, online accounting platforms, memberships of professional associations, relationship building, researching and developing new services or products… these things are necessities, not luxuries.

New skillsets and mindsets to learn

Making a move from the public to the private sector involves viewing some things from new perspectives. We say this having experienced these mind-shifts first-hand. As government employees we worked hard, with incredibly smart and passionate people, around shared goals of supporting government policies to make the world a better place. We carefully managed budgets to deliver projects to time and quality expectations. We had a strong customer focus, looking to satisfy the needs and expectations of our direct customers (from policy managers to Ministers and Cabinet) and our ultimate customers (the public).

When we entered the private sector, some subtle but important differences came to the fore: those budgets we’d always managed so carefully transitioned from being ‘other people’s money’ to putting our own homes on the line and budget overruns becoming straight deductions from our take-home pay. Our customers remained similar, but now those customers have a choice, they don’t have to choose us, and it’s an amazing feeling when they do.

Julian: When I first went consulting I joined a big firm. It was an excellent way to learn consulting and business skills. The expectation to generate revenues of at least three times my salary and to account for my time in six-minute increments focused my mind, as did the turnover of consultants who ‘couldn’t make it’ in this environment. I had to learn how to market my skills without feeling sheepish, how to spot and create opportunities, and how to have ‘money conversations’ like discussing fee rates, negotiating changes of scope, and chasing late payments. I’m grateful for everything I learned in my first ten years of consulting and admire my colleagues who went straight into sole practice and figured it out for themselves.

Assuming you start as a company of one, you’ll find yourself in charge of many tasks that you may have been accustomed to delegating to others. Installing new software, troubleshooting a wayward wi-fi connection, building a website, booking your own flights and accommodation are only a few examples. Of course, you can delegate anything you want, any time you want, if you’re willing and able to pay for it.

Adrian: I’d been thinking about going solo for some time. It was when I landed on the name Dovetail that I realised that I really wanted to own that name in some way. In the lead-up to leaving my earlier role I began to quietly craft what I believed the company would offer and stand for, and just as importantly, what I needed to make it work. When I did go it alone I had my offering worked out, and some core systems in place, even if they were more than a little bootstrapped in places. That stood me in good stead for the further development of the company.

You’ll need to think about your marketing and branding, including a logo, a professional online presence, and professional photographs. There are sites like Squarespace and Weebly where you can build your own stylish website. For some this may be a daunting prospect, but there are also reasonably priced boutique web designers who you can turn to. Just bear in mind that people get the website they deserve; if you haven’t thought much about your offering, and what you like or dislike in other websites, then you’ll probably get something that you’ll be unhappy with, and which may turn people away.

A leap into the unknown

No matter how slowly and carefully you plan your move, there comes a day when you have to stand on the edge of the water, take a deep breath, and dive in. To us, it was a transition that felt like a bigger deal in anticipation than in hindsight. But that’s not to make light of it; your own, very personal journey into business is a significant moment.

For both of us, the decision to go into business for ourselves included making peace with the financial risk and being prepared to live cheaply for a period if necessary. It’s been said that it’s ideal to have a ‘war chest’ of six month’s living costs or a significant other with a steady salary, and we can’t knock that advice. We both went in with our eyes open, knowing the bottom-line revenue we had to earn and being clear about our options if it didn’t come off. In both cases, we rapidly found we needn’t have worried. Our advice would be to prepare for the worst but permit yourself some optimism and enjoy the ride!

Aside from the general risks of setting up shop, it’s also reasonable to ask whether now’s the right time. Entering the consulting marketplace during a period of government austerity, mixed business confidence and high living costs must take a special kind of bravery, right? That may be true, but at the same time, increased churn creates opportunities. Layoffs may increase the need for some contracting and consulting roles. In our experience, a change of government often brings a period of significant cutbacks and reversals, but after a while various needs emerge to deliver things, and then ideas and opportunities resurface. Being in business for yourself also means you can diversify risk by working across multiple marketplaces - e.g., offering your services to governments in the West Island (sometimes known as “Australia”) and elsewhere.

We think it’s absolutely worth it. We love working in this way. We know that we’ve described some hurdles that need to be carefully crossed, but in our experience this way of working offers incredible opportunities for autonomy, creativity, financial freedom and collaborative partnerships in an environment that feels exciting and dynamic. We each still have to live with questionable management decisions from time to time, but they’re our questionable management decisions and that makes a big difference.

Success is possible! Back yourself, stay focused, stay true to your values, and take it a step at a time. The world needs your unique talents and perspectives, and consulting provides a platform to share them more widely.

Books
Paul Jarvis. Company of One: Why staying small is the next big thing for business. Penguin Business
Joe O’Mahoney. Growth: Building a successful consultancy in the digital age. Routledge.
Oliver Burkeman. Four Thousand Weeks: Time management for mortals. Vintage Press.
Lynda Gratton and Andrew J Scott. The 100-Year Life. Living and working in an age of longevity. Bloomsbury.

This blog has been shared on www.dovetailnz.com and https://juliankingnz.substack.com