What are the pros and cons of a consulting career?

Independent consulting is a unique opportunity to take control of your career, work with a variety of clients, and potentially earn more. But it’s not for everyone. For every perk of being a consultant, there’s at least one downside to choosing this career path.

If you’re considering striking out as an independent consultant, you may want to consider the pros and cons. This article covers three key reasons why you should become a consultant and three reasons why independent consulting may not be for you.

Pro: You’re your own boss

One of the perks of being a consultant is having more control over your work and career. Consultants are free to set their own working hours and schedules. You can create a work-life balance that suits your current lifestyle and modify it to adapt to changing circumstances.

As an independent consultant, you are also in charge of making important decisions about how your business is run. This may sound great if you currently feel like you have little control over your career.

Con: Everything is your responsibility

You may have more control over your workdays, but that also means taking on greater responsibility. If you are a sole proprietor, you could be legally and financially responsible for problems that arise in your day-to-day business. This can be a huge risk, putting your business and personal assets on the line should something go wrong.

Overcoming the con

Insurance is one way for sole proprietors to manage legal and financial risk. Consulting insurance (shorthand for the different types of coverage available to independent consultants) can create a safety net for you and your business. Depending on the policies you choose, your insurance could help manage unexpected bills caused by lawsuits, injuries, and more.

Independent consultants often choose coverage, such as:

Professional Liability – Also known as Errors and Omissions (E&O) insurance, this type of policy protects your business against claims of negligence, misrepresentations, or mistakes. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.

General Liability – Also referred to as Commercial General Liability (CGL) or “slip and fall coverage”, this insurance can protect your business against bodily injury or property damage lawsuits from outside parties.

Business Owner’s Policy – A Business Owner’s Policy (BOP) is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service.

Pro: There’s great earning potential

Consultants typically earn excellent salaries. As an independent contractor, you are free to set your own rates. Many independent contractors charge hourly or project rates that are often more than you’d earn as a permanent employee of the same company. This can be life-changing for your career, personal life, and family!

Con: Pricing can be tricky

While you get to set your own rates, landing on that magic number can be a challenge. Price your services too high, and you’ll price yourself out of work. Too low, and businesses may be hesitant to hire you, thinking they’ll receive poor quality work.

Overcoming the con

Pricing is part science, and doing some research can help you set rates that are fair to both you and your clients. You may want to consider things like the industry or industries you work with, how much your competitors charge, your education and experience, and your business expenses (including overlooked items like consulting insurance premiums).

Pro: You get to choose your clients

Choosing the clients you work with is considered a major perk of being a consultant by many. Weeding out potential ‘troublemaker’ clients can help you avoid many headaches (and possibly some lawsuits). You can also work with clients strategically to learn new skills, gain experience in a specific industry, or earn more money.

Con: Finding work can be a struggle

Independent consultants may have the freedom to choose their clients, but filling your calendar can sometimes be a challenge. There may be periods when you’re turning work away, only to find yourself struggling to book projects months later. The up-and-down nature of consulting work may make it hard to manage cash flow, and sometimes, even pay your bills.

Overcoming the con

Creating a steady flow of work is essential for consultants. It may help to establish several client “streams” to ensure your calendar is consistently being filled. This might include seeking referrals from past clients, building a website to help interested clients find you, running ads, or becoming a thought leader in your industry.

Find insurance for independent consultants

Consulting can be an exciting step in your career trajectory. You can put your years of industry experience and knowledge to use, helping other businesses grow and improve. It could create a major pay bump and provide you with more control over your workdays.

But like any job, there are also downsides. Understanding both the good and the bad could help you make a sound decision.

And if you decide that the perks of being a consultant outweigh the bad, BizInsure is here to help you find consulting insurance that fits your unique needs.

Compare quotes for Professional Liability, General Liability and Business Owner’s Policies online and buy coverage in minutes. You’ll be covered instantly, with policy documents sent to your inbox. It’s quick and easy, so you can get back to providing business advice and other services to your clients!