Risk Consulting is a fast-evolving field and offers a great opportunity to build a practice of your own. Most risk professionals, at some point in time or the other, would have pondered over the possibility of running a consulting practice. Yet, not many take the plunge. This note should help you find out if risk consulting suits you and how to get started.
Job vs Consulting
A regular job is still the natural choice that comes up most often. Consulting, a less trodden path, provides a higher challenge and an opportunity to grow fast. Though it lacks the protection of being a part of a large enterprise, practice could provide higher degree of freedom, better professional growth and operational independence. The most critical differentiating factor is that jobs offer less volatile income streams while consulting provides higher income potential.
Check if it suits you
The following aspects should be carefully evaluated to see if consulting is a suitable option for an individual to choose.
Consulting is an entrepreneurial journey and requires a mindset that suits such an endeavour. It requires the individual to be driven by passion and the inclination to move out of his/her comfort zone.
- Running a practice has higher uncertainties than a regular job. A host of factors, within and outside the consultant’s control may play a significant role. Willingness to accept those and adopt quickly will be essential.
- To run a successful consulting practice, one has to constantly update oneself and keep identifying new opportunities. This is an effort intensive activity and requires a student-like attitude.
- Evaluate if you have the skills to conceive, articulate and deliver value to your client.
- Sales and service delivery are not demarcated in consulting practice. The consultant would have to manage selling the service, delivering and managing the operational aspects. This calls for a multi-dimensional skill set.
- Having some work experience in the area of risk would add a lot of value when one is into consulting practice. Exposure to a regular job provides an understanding of enterprise operations, work ethics and organisational dynamics. This background can be a great asset in consulting practice.
How to get going
|Detailed planning||The need to make detailed plans cannot be over-stressed. Before you hit the road, the complete plan (including the financials) has to be put together, reviewed and confirmed as feasible.|
|Business model||The business model of consulting is fairly standard. However, it is important to fine-tune it to suit your practice, especially the pricing model.|
|Organisation||There are multiple options like limited company, partnership or even individual practice. The choice would depend on several factors like scope of service, number of consultants involved, type of clients and partnership plans.|
|Service offering||In early stages, having flexibility with service offering is essential. However, prior to commencement of operations, clearly defining the offering and articulating its value proposition are absolutely important.|
|Team||Having a team to work with, is always helpful. In simple terms, two heads put together is better than one. Even if you are running an individual practice, having external collaborators would be useful.|
|Build network||In case of non-tangible offerings like consulting, creating a strong personal network would be absolutely critical. This activity takes time and hence should be started and developed well before you take up the entrepreneurial route.
In practice, referrals form a significant stream of sourcing new projects. A good network of professionals who can vouch for your credentials and capability will be an invaluable asset.
Ramping up professional skills
At the core of consulting practice is the risk expertise that the consultant brings to the table. The best way to acquire that professional competence would be to take up the membership and qualifications of IRM. The qualifications would provide the knowledge base to function as a successful risk professional. It will help clients to easily benchmark the credentials of the consultant with the best in business. Membership would also give access to a large pool of experts from across the global community. Another benefit would be the availability of the rich collection of resources and tools provided by IRM.
Myth 1 : Significant capital is required to set up a consulting practice
A consulting venture can be set up for individual practice with minimal capital. As an individual consultant, one can operate from a home office and function with minimal infrastructure. What is required is to plan cashflow appropriately to manage operational items like tech support (email/website), sales & marketing expenses, travel etc
Myth 2 : Risk is a growing domain and success is guaranteed
Though risk is a domain which has immense possibilities, success of an individual initiative would depend on a host of factors. These would include the service offering, geography of operation, skills of the consultant(s), compliance requirements, general economic environment and so on. Predicting the outcomes with certainty is not workable in such cases.
Myth 3 : Having good risk related skills is sufficient to get good assignments
Risk skills form an essential, but not sufficient condition to succeed in consulting. That would depend on several other factors like identifying the right clients, picking appropriate opportunities, putting together a viable proposal, negotiating and managing the operational aspects of the project.
Myth 4 : The viability of the consulting practice can be judged in three months
Building a consulting practice is a time consuming exercise. It requires good amount of patience and perseverance from the part of the consultant. Typically, in the early phases, a lot of effort and negotiations may be required to conclude contracts. A reasonably long window of a couple of years would be required to test out the viability of the practice.
Myth 5 : Picking up all opportunities that come our way is the route to success
In the initial phase, the temptation to blindly pick up all opportunities that come our way is difficult to resist. But, that could lead to dilution of the positioning and could have adverse effects on the brand of the practice.
Family – an often unstated pillar
Usually family does not figure prominently when it comes to discussions on setting up of a risk consulting practice. But, much more than a regular job, active support of the family will be essential for a consultant to perform successfully. The initiative requires humongous effort and sacrifices on the part of the consultant and that cannot be achieved without the family standing solidly behind the individual.
There is a lot to gain
In spite of all the challenges that have been pointed out above, practice can provide several benefits that a regular job would not.
- The professional satisfaction of taking up and completing an assignment as an independent consultant.
- Continuous opportunity to learn, enhance skills and practice them
- Opportunity to build an individual brand as a risk expert
- Flexibility to operate on own terms and conditions
Some common causes for failure
- Starting a practice driven by dislike for one’s job, rather than passion
- Focusing on the benefits and not analysing the risk exposure adequately.
- Under-estimating the financial and professional capacity to handle the challenges is a common issue.
- Poor mental strength and resilience to handle ups and downs.
- Unrealistic expectations (typically financial) and resulting disappointment
An opportunity worth pursuing
If you have the right drive, adequate skills, capacity to absorb professional & financial fluctuations and above all a passion to be an entrepreneur, running an independent risk consultancy practice is an opportunity worth pursuing.
Submitted by: Rama Warrier