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WIC survey touts characteristics of successful consultants

Chip Camden highlights the findings from the recent Women in Consulting survey, and concludes what four things the results mean for your business.
Women in Consulting (WIC) released the results of their 11th annual survey of consultants in the San Francisco Bay area. In their report, they noted differentiating factors between consultants in the top 20% of income versus the rest of the pack (Figure A). From the press release:
  • Their median gross income is dramatically higher, $373,000, compared to $99,700 for all respondents
  • Two-thirds operate either as a corporation or LLC (which may be required to work with larger companies)
  • These consultants are three times as likely to have employees as the other respondents
  • They're 50 percent more likely to use subcontractors
  • They're also more likely to charge at least part of their fees up front, bill on a retainer basis, and work directly with clients (as opposed to being subcontractors)
Figure A

Graphic courtesy of texto. (Click the image to enlarge.)

As always, we want to beware of confusing correlation with causation. For example, some of these bullets might be more symptomatic of success, rather than contributing factors.

What seems most important to me in this report is that many of these upper-fifth consultants have continued to grow their business during the difficult economy of the past two years. My own take on that is that when times get tough, clients put their money where they know it will do some good. So rather than taking a risk on less expensive consultants, the smart businesses contract with consultants who have a solid reputation, who know what they're doing so they do it right the first time, and who provide indicators that they aren't going to disappear tomorrow. It can also make sense to contract a consultant rather than to hire someone, because of the potential expenses related to letting them go if they don't work out. Overall, there's much less risk in using a reputable consultant.

What does this mean for your consulting business? Build a reputation for always delivering the goods. Don't under-price yourself. Expect the respect that's due to a top-notch consultant. Be willing to say no to bad business, so you'll have time for the good business.

WIC will host a webinar on November 7th to discuss details of the survey.

About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

5 comments
PMPsicle
PMPsicle

Unfortunately, as you point out these results are more the results of success than the cause. It would be interesting to see more cause related results so that we could emulate them. Secondly, income is important but the profit is more important. After all, I've seen a number of consulting companies that have large incomes selling other people's time without making anything more than a nominal amount on those extra fees. It would be very interesting to see the full report. (BTW your conclusions seem to have more value than the press release ... although the fact that the top 20% have left hourly billing in favour of project or retainer billing is significant.). Glen Ford, PMP http://www.vproz.ca

horzewski
horzewski

Women in Consulting (WIC) has been doing this survey for 11 years, and we have consistently found some practices (e.g., complex business structure, subcontracting, billing by the project or retainer) to be associated with higher achieving consultants. Can we scientifically prove cause or effect? No. But we can look at what high-achieving consultants are doing, and the patterns have been consistent year over year. If nothing else, the survey helps all of us look at how we’re running our businesses and consider ways to improve. If you want more details, WIC will have a webinar (http://bit.ly/R4YJRB) detailing the survey results on Wednesday, November 7, 11 a.m PST. A free summary of the survey is available on the WIC website (http://bit.ly/W2W9Db), and detailed findings are available online exclusively to WIC members. If you have any questions, let me know.

Sterling chip Camden
Sterling chip Camden

For those who don't know, Ms. Horzewski is the Interim President of Women in Consulting.