Exchanging time for money, be that via a traditional job or consulting revenue, gets beaten up in the entrepreneurship space.
“Why would you waste your time doing work for someone else’s business when you can make all the money for yourself by working on your own business?”
My own line of thinking is that there’s nothing wrong with having a job. Beats the heck out of being unemployed.
Whilst I firmly believe that business ownership is a superior option to working a “regular job”, when it comes to creating wealth and living a balanced lifestyle, my personal experience is that there is a happy medium to be found between spending all your time working for someone else’s business (consulting) and spending all your time working on your own business.
I call it being a consultpreneur. Part time consulting, part time working on personal projects.
I make a living in the internet marketing space and consultpreneur in my world means that I spend about half my time consulting to businesses and website owners, helping them grow their online presence.
The other half of my time is dedicated to building, buying and flipping websites. I’ve grown that to the point of offering my skills as a service for individuals who want to invest in online businesses as well.
I’ve grown to appreciate the value of monetizing my skills with consulting as a way to drive steady, predictable income, in the absence of the income safety net that a regular job offers.
To give you an idea of where I’m coming from, I live in Australia, have three daughters and this time next year, all three will be going to one of the top private primary schools in my city.
Next year I will spend equivalent to about 70% of the average Australian’s after-tax take home pay, just on school fees. Sometimes I’m envious of single guys that can get by on low 4 figures per month, travel, live the “laptop lifestyle”.
In Australia, if you want to send your children to certain private schools, you need to be earning well above-average income.
So my reality is one where my responsibility as a father is to ensure that however I generate income for my family, that it comes in on-time, and that there’s enough of it!
Had you asked me 18 months ago if I’d be a fan of consulting, I’d probably have rattled off a line about consulting being a poor man’s game. You can’t get rich working for someone else!
But this past year has taught me a few valuable lessons about income diversity and getting the right balance between “now money” and longer term projects.
An Uncomfortable Path to Consulting
In July 2014 I resigned from comfortable full-time job in a company I’d worked with for over a decade. I was good at what I did, and well paid. I left that behind to pursue my real passion, which was online marketing.
In the lead up to July, I’d spent a couple years perfecting a particular SEO tactic and together with a business partner, had launched a business running online courses that taught participants how we were making a great income online.
Course revenue, combined with income from our profitable websites put me in a position where I was comfortable going “all in”, escaping the 9-5 and going full-time online. It was time to live the laptop lifestyle!
Things Were Great, Until They Weren’t
Not 2.5 months later, Google launched an attack against the tactic we were using. Short of the long is that 90% of our income-producing websites were wiped out in an instant.
Although the tactic we were using still worked then and still works today, we just couldn’t morally keep teaching it as part of our course knowing that at any time, our course participants could get hit by Google exactly the way we did. So we wound up the course. Another income stream shut off.
So there I was, online income in tatters. I had been too comfortable and allowed myself to get in a position where even though I had multiple streams of income, they each relied largely on a single tactic.
I was at a crossroads with regards to how to proceed online.
For one, I knew that basing 90% of my income on SEO tactics was not smart. So I made a swift change and forced myself to sharpen up on my overall internet marketing skills. But beyond my skills, the way I got paid also needed to change, fast.
Got online marketing skills? Here’s how you can get paid
The way I saw it at the time, and still do today, you’ve got three ways to monetize your internet marketing skills.
#1 Teach your skills to others
I’ve been fortunate to be able to make income doing this, but it’s not a viable tactic for most people.
To get in a position to teach, you either need to build a business relationship with someone that has an audience, or build one yourself (which takes time).
Really, you have two options:
#2 Use your skills on your own sites or online properties
The upside is that you are using your skills on your own asset and so get full value for your time.
The downside is that much of what you do is not providing you with “now money”. In most instances, the work you do today does not earn you revenue today.
Further to that, the work you do today is usually based off of the presumption that it’s going to earn for you tomorrow (or weeks, maybe months down the track). It may not eventuate.
The “now money” in the online marketing/building money making websites game is usually not a reality.
#3 Monetize your skills with consulting (eg client SEO)
I’m not sure if it was fear of a second Google update wiping out the remainder of my online properties or just a moment of clarity, but October 2014 was the month I came to the stark realisation that I needed to diversify my income streams. And so I did.
I set myself an initial goal to hit $100k in 100 days, meaning I wanted to pick up just over $8k of monthly SEO and online marketing client work within 100 days. I got to $50k equivalent in 50 days ($4k per month) and then actually pulled back because I was comfortable at that point and had some other priorities.
But I’ve come to appreciate the value of consulting income and finding the balance between perhaps the more exciting projects (eg building and flipping websites, which I really enjoy) and the security and predictability of doing consulting work for businesses and website owners.
6 Reasons I’ll Always Offer Consulting Services
I consider consulting income as a foundational piece of my overall income and if there is one thing I’ve learned over the past 12 months in particular, it’s the value of an income stream safety net; that being multiple streams of income that are not dependent on each other.
When you have interdependent income, you’re at risk of losing the lot if something goes wrong.
Balancing consulting work for other people’s businesses with work on my own project external to that makes absolute sense for where I’m at in life (a private-school-fee-paying husband and father!).
2) Monetize a Passion (or a Skill)
I enjoy SEO and Internet Marketing, simple as that. That’s actually a lie, I love it. Every traditional job has upside and downside and I’m yet to hear of a job where it’s 100% enjoyable.
I could think of very few other “jobs” that I would rather be doing than SEO for clients. It is enjoyable, it’s challenging, it aligns with my core skills and I believe in the value it provides to clients.
Getting paid to do what you love is like the holy grail of income generation right?
The knock on consulting or exchanging time for money is that although you might earn a decent hourly rate for your consulting, it’s once-off and the work you to is improving the value of someone else’s asset rather than your own.
The implication here is that you are taking time away from your own projects and investing it in other people’s projects. It’s not as straightforward as that.
I do around 20-25 hours per week on consulting work in a normal week, leaving 20-25 hours for my own projects. I’m getting just as much personal project work done in the 20-25 hours as I would have with 40-50 hours because I’m forced to being more effective.
There’s a limit to how much effective work you can do in a day or week and so in many ways, I view consulting time as filling in the unproductive time, which only leaves me with a finite amount of hours to get work done on personal projects.
I’m essentially forced to apply the 80/20 rule to my personal projects and so another way of looking at it is that I’m getting paid decent hourly rate to fill in the time that I would have otherwise been fluffing around with!
4) Now Money
Cash flow is King in business and I use consulting to give me a consistent flow of predictable income.
Of course, predictable so long as clients pay on time and I deliver results, but so long as you are maintaining relationships and delivering on whatever you promise the client at the outset, I love the aspect of getting fruits for my labor right now.
Banks do too and with the way banks are now with lending, certainly in Australia, having that consulting income coming in regularly is a big tick for securing loans.
5) High Dollar Per Hour
If you earn $100 per hour for your time and work a productive 6 hours per day, that’s $600 per day, $3000 per week, $156k per year. Nothing wrong with that ‘ey?
Of course, there’s costs even for an SEO business (tools, subscriptions, VAs etc) but even at $75 per hour in profit, that’s still over $115k per year. Not bad if you can align your services with something you enjoy.
What kind of value can you put on a relationship with a guy worth almost $200 million?
Rhetorical question, don’t answer. You get the point though and the beauty about doing client work is that you are consistently being exposed to new contacts. In my case it’s business owners.
I pitched for the SEO work a couple months back for a big player in my local area (the guy is worth $200 million) and the funny thing is that they went elsewhere for their SEO work, but I now have a direct line to him for business advice.
You can’t put a price on that type of a relationship and it would never have come about if I was spending all my time at home working on my own stuff.
Of course, all of the above presumes that you’re happy to work a fairly typical work week of 45-50 hours. But the way I see it, there’s much more to consulting than the per-hour return.
There’s too many benefits and that’s why, certainly for the foreseeable future, I can’t see myself wavering from being a consultpreneur.
I would love to hear your thoughts in the comments below if you’re in the consulting space, considering it, or even if you disagree with my line of thinking.