If you want to supplement your IT consulting income, read these suggestions for diversifying your revenue stream.
For the first in our series of Ask Chip posts, I selected an item from a list of questions posed by TechRepublic member DavidTheConsultant. Among other things, David asked for advice on "Alternate and derivative revenue streams (talks, papers, e-Books, seminars and workshops, classes, etc.)" I think this is a fine subject, especially given the current state of the economy. We consultants need to be creative and smart about diversifying our revenue streams so we don't get left high and dry when times get tough. Let's discuss the items David named, as well as a few I'll add.
Teach classes and lead workshops
This is a great way to accomplish several objectives at once. Besides gaining additional revenue, you can educate existing users (hopefully making your job easier in the future) and/or attract new business. You'll need to decide in advance who your audience will be. Larger clients might prefer a private class in their offices, for which you might be able to charge more per head. But you could also offer a public workshop if you can identify a subject of general interest. Either way, you get to showcase your knowledge and helpfulness while charging people for that experience. If your intended audience is not restricted to your local area, you could try hosting the show on the web — but that requires a technical expertise all its own, as well as the mercy of the demo-gods.
Say 'yes' to speaking engagements
If someone invites you to speak to a group or to serve on a panel of experts, that's like a much better version of hosting your own class or workshop. They generally pay better, you don't have to manage all of the logistics, and before you even start speaking most of your audience has already accepted your authority on the subject. Sadly, even if you don't know what you're talking about and totally blow it, this will still look good on your list of experience. But if you nail it, you'll start to build a reputation as a leader in your segment of the industry. Expect more opportunities in the future.
Be an expert witness
Besides providing your knowledge to those who use technology, you can also make money from helping those concerned with its legal aspects. I've served as an expert witness in two cases over the course of my career, and both were enriching experiences. Unlike working with accountants, lawyers generally don't mind spending their clients' money in order to achieve the best outcome. However, you do need to do your homework. Anything you fail to verify will get picked apart by the other side. You also need to have a tough skin, because the opposing counsel will probably try to disqualify you as a witness. It's all part of the game. It's a great way to build reputation, but it also requires a solid reputation just to get the gig.
Write about your niche
Another great way to build reputation in your niche is to write about it, although it's hard to say whether you can make any money at that. Most of what people read these days they get for free. If you're going to try to sell them a book, it had better be on a subject in which they're willing to invest, and for which they can't find easy answers from Google. You can also explore other revenue models. You could place ads on your blog, but don't expect to get rich on that unless you have an exceptional talent for drawing an audience. Writing for someone else (for instance, TechRepublic) can pay decently and provide the same kind of boost to your reputation that you get from speaking engagements. Of course, first you have to get them to hire you, and then you have to follow their rules and schedules for content. Consider yourself lucky if you get an editor who is easy to work with and actually improves your effectiveness, like Mary Weilage.
Offer products for sale
Even though our world is moving from a manufacturing to a service economy — especially in software — there are still opportunities to provide products for money. You might write a smartphone app that you or your clients would find useful, then sell it through a store to create a supplemental revenue stream. Or you could create a simple web service and find yourself branching off into a startup of your own. You might even try reselling third-party products that you find helpful. The key to all of these is to apply your knowledge of the problem to find the best solution and make it available. If a canned app doesn't fit, don't go there. In that case, you'll satisfy your clients better by providing a custom solution, and make more money at it.
Add more niches
If your area of concentration doesn't provide enough revenue, you might consider adding another one. Be careful, though. You don't want to dilute your expertise too much. You'll also need to invest some time to learn the new area, and you probably won't be able to charge as much until you can honestly call yourself an expert. Take this step cautiously and thoughtfully, and don't add more than one new focus at a time.
What did I miss?
How else do you supplement your consulting income? Let me know in the discussion.
Thanks, DavidTheConsultant, for posing this excellent question.Ask Chip: If you have an IT consulting question, email it to me or use the "Contact" link by my picture at the end of one of my articles, and I'll do my best to answer it. (Read guidelines about submitting questions.)