100 ◾ Odyssey—The Business of Consulting
A Consultant Danger Zone
Consultants in early start-up mode tend towards creating partnerships pre-
maturely. Partnering is often a result of the need for “consulting comfort”
and the “thought euphoria” associated with one’s newfound freedom to
sell expertise and services. If not structured appropriately, however, these
partnerships can become time consuming, unproductive, and costly for all
involved. Your time may be better deployed by focusing your energy on
looking for clients and creating your brand of leadership. A more reward-
ing support strategy may be to contract expertise as required. Productive
partnerships evolve when you have an established practice identity, which
attracts those with like mind, ethics, and heart.
Personal Profitability
Your personal rate of return is the single most important contributor to your
overall success. Your ability to consistently earn an above average income is
your most valuable asset. Time is the critical resource. How you use the 168
hours available to you every week will determine your revenues and profits.
A good question to make a habit of asking yourself regularly is, what am
I doing at this moment that is contributing value to my business? You should
be able to quantify your answer using cash flow and profitability variables.
The time will come when summer will ask, “What have you been doing all
winter?” Or winter will ask, “What have you been doing all summer?”
The only time an Odyssey consultant should think about an hourly rate
is when calculating costs on how much time to allocate to key productiv-
ity, performance, and administration tasks on a project/proposal basis.
This exercise is for your own internal use to establish a preliminary project
profit/loss analysis to determine the overall project fee to be submitted to
the client in the Recommendation (REC).
Value Basics
Let us say you work 2,000 hours per year. Now, divide that figure into your
annual net income and you get your hourly rate. Let us say you pay yourself
$100,000 per year. Divide by 2,000, and you arrive at an hourly rate of $50.
Once you have established that critical figure, you must take action. Stop
doing administrative low-value tasks that can be completed by someone else