By Ismail Abdur-Rahman, CEO iVIBES
Look. Up in the sky. It's a bird. It's a plane. It's a....
Well, although I have been known to occasionally leap tall buildings in a single bound, I think it's time to set the record straight on a few things. For starters, when I say I'm an entrepreneur, I don't mean like Eddie Murphy's Mr. Robinson sketch on SNL. It really does mean that I have leveraged my talent and experience to exploit market inefficiencies to create legitimate business opportunities. However, it seems that there are wild misconceptions about what it means to be an entrepreneur these days, so let's clear the air.
Without getting all technical on you, let's explain the way people work this way: employees trade their time in exchange for money. You work a certain number of hours and get paid a certain amount of money. Pretty straightforward. Stable. But is that really a good deal for the employee? Uh...not usually.
When you trade time for money, your earning potential is limited by the fact that there are only 24 hours in a day, and a finite number of possible working hours caps your earning potential in this scenario. When you factor income tax into the scenario, it can be a bum deal for the employee. Time is a commodity, the most valuable one any of us has (I'm sure people with terminal illnesses would love a bit more time), so I feel that putting a dollar amount on its value is almost disrespectful.
The Entrepreneurial Mindset
The first thing you have to know is that entrepreneurs think differently about money. Instead of trading time for money, we trade value for money. Unlike time, which is finite and therefore limits your earning potential in the time-for-money scenario, the value that you can create for others in exchange for money isn't constrained. Sure, there are market factors you will need to consider, but the Cliff's Notes version of this story goes like this: as long as you can create value that people are willing to pay for, you can make money proportionate to the value you deliver.
If you don't have a product, one low overhead way to start trading value for money is by consulting. If you have expert knowledge and experience in a particular domain, you might have what it takes to be a consultant. I have to give a disclaimer here because the commoditization of knowledge has really harmed consulting practice, as people who lack ethics and professional standards, in addition to real experience, have flooded the market.
Being a consultant is not a bad way to test the waters of entrepreneurship, especially if you're risk-averse. You need little more than a laptop and mobile phone to get started, although you will need to spend money crafting your brand in order to attract your earliest clients.
While you might be quite confident in your abilities to deliver expert advice to your clients in a particular domain, you will need to spend some time establishing your expertise and building your authority. Translation: you're probably going to need to do some pro bono work in the beginning in order to handle the early development of your professional brand. Speaking engagements, training sessions, and workshops are all ways to get in front of your target audience and begin to establish your credibility.
One of the key things you'll want to figure out before diving into uncharted waters as a consultant is your value proposition - you'll need to determine what skills, knowledge, relationships, or assets you have that people value enough to pay for. You'll also need to establish what makes you different from the hundreds of other consultants out there offering the same products and services that you offer.
Perhaps just as important is the question of how you will estimate the value of your services. One mistake I've seen a number of aspiring consultants make is underpricing the market in an attempt to gain as many clients as possible. While there is some merit to pricing your services a bit below market when you're still building your brand and trying to get those crucial early clients, you have to be careful not to commit arbitrage suicide. If you price too low, you'll ruin the market by empowering the clients to drive down rates for consultants, and this pricing change will also suggest that the quality of the services isn't very good, either.
One of the worst things you can do as a consultant is be so desperate for a client that you literally bend over backwards for a client. This sets unrealistic client expectations - that the client is always right and that you will always do whatever it takes to keep them happy, even at the expense of your dignity.
Related to value is the Pareto principle, which states that 80% of the results of an effort are produced by just 20% of the contributing agents. In other words, if you set a target of earning $100,000 this year, you might think that the path of least resistance would mean finding 100 clients to pay you $1000, but how realistic is it that you can actually service 100 clients at the same time?
A better approach would be to find 2 clients to pay you $50,000. I know this is easier said than done, but the logic is sound, nevertheless - focus on the vital few that are likely to deliver the most significant results.
Once you've narrowed your focus to a well-defined target audience for consulting, you can think further ahead and create digital products that can yield great value and create ongoing revenue.
Try packaging your extensive knowledge into an online course, an ebook, or software. This is a good value-for-money proposition, as you only have to spend time creating your product once, but the sales could theoretically continue for years or decades into the future. Sure, you'll spend time updating and revising your product, and you'll certainly want to craft an amazing marketing campaign, but after the hard part is done, you'll be able to collect revenue without much direct effort.
The processes of creating and delivering your services, products, and content can be made easier with automation. There are cloud based programs that can perform many business processes automatically, and this will free up your time so that you can work on your business, not in your business. After all, the point of being a small business owner isn't to be your own employee forever. Spending a few bucks to automate your email lists and manage your sales funnel can be well worth it, especially when your time would be better spent on business development and strategy mapping.
Being a consultant doesn't mean that you will always be right or that you will always have the best solutions for your clients. However, if you are humble enough to admit that you don't know everything, you can build relationships with other industry players and benefit from their experiences and best practices in order to deliver the most value for your clients. And once you've freed yourself from the time-for-money bondage, you'll have the freedom to pursue your passions and truly live your best life.