Levels You'll Experience On Your Data Analytics Consulting Journey

By Benjamin Rogojan - AKA (The Seattle Data Guy)

If you’re looking to start consulting, you don’t have to quit your job tomorrow. You don’t need to risk your financial security before understanding if you even like the work.

Instead, you can slowly build up your skills and prospect pipelines so that you have a steadier business when you are ready to quit. 

In this article, I wanted to discuss the various levels I went through and have seen others go through when they were building their consulting business, starting with the occasional side hustle and eventually getting to a point where they are a full-time consultant.

Side-Hustling

I don’t entirely like the term side-hustling as it can often be tied to the rise and grind-culture that I don’t believe is the healthiest mentality (I also dislike that it feels like a necessity in America). However, I do believe it accurately describes the early phases of many people’s consulting journey.

You don’t have to 100% commit to the idea of consulting right away. Instead, I have seen many people talk themselves into side projects. Perhaps they shared some content on Linkedin or talked to a director at a conference, all of which ended up with them having a 20-40 hour side project that made a few extra grand for a month or two.

This is actually a great phase to be in; you can test out if you like the idea of consulting. There are several challenges you will run into. But since your projects are likely smaller, you can slowly learn how to be better at managing them and handling client expectations.

It’s a great way to slowly build up your skills. 

That’s why when people ask me if they should freelance, I encourage them to try to find a project or two that are generally small to test out if they like it. Plenty of small projects need to get done and larger consultancies won’t touch them because they have minimums. 

All in all, before quitting your full-time role, take some time and see if you enjoy taking on smaller projects.

My First 6-Figure Consulting Project

You Can Possibly Quit

I worked at Facebook for nearly 3 1/2 years. For the first few years, it was difficult thinking about what was next from a financial standpoint because, well, it's a FAANG.

It was the classic golden hand-cuff problem.

Why leave when most other companies would likely pay you 50-75% of what you are currently being paid?

Why would you risk working for a start-up or attempt to start your own business?

More so, the $3-10k extra per month I was making really didn’t justify me quitting.

So what changed?

First you need to have one of the following:

• Great Marketing/Brand

• Great Sales

• Great Networking

• Great Partnerships

• A Great Partner - Who Can Sell You

Having one of these will help lead to more possible prospects, and more prospects means you can say no more often. Saying no means you can start working on projects that meet a minimum.

When you first start consulting, you’re side-hustling, so taking on the occasional 1, 2, or $3k project doesn’t matter.

Once you’re considering quitting your full-time job, you need to find projects that are likely in the 8, 10, or $20k per month range (depending on what your target is).

To put this into perspective, one client who pays $8.3k per month equals $100k per year.

What if you get two?

But having 16 clients who all pay $1k per month will quickly deplete your mental energy. I find that any project, regardless of the size, still takes up a similar overhead, so in order to quit, you need to get to a point where you have 2-3 clients in your target monthly range (this is not a hard and fast rule; I still take on the occasional small project, although I often regret it).

But if you have 2-3 clients that meet your minimum (assuming you have the capacity to take 3 on), then you have enough of a buffer to have 1-2 leave and you’ll still be on target financially.

Of course, if you’ve got two clients that likely take more than 100 hours a month of your time, it’s probably time to quit.

Career Consultant

At a certain point, it’s time to cut the cord. It’ll be difficult, especially if you have a cushy job that pays well and feels a little more secure.

But if you really want to start to grow your consulting company, you’ll need to quit. It’s scary.

I would recommend you have two different sources of clients. Sometimes one reliable source just doesn’t seem to produce prospects, so having a second method can help bolster that.

Personally, I rely heavily on my marketing and media. But I also have decent partnerships and some other consultants I occasionally work under. It helps me keep focused on the work vs. trying to constantly find new business.

Now if you want to go the consultancy route (basically, you find the work, and other people do it), you’ll need to index heavily on partnerships.

In order to really scale beyond $500-700k, you’ll likely need to start scaling out your consulting business.

Scaling A Product Or Your Team

I used to be in awe of consulting companies that seemed to grow overnight. How could they make the jump from 0 employees to even 1-2? Having one or two employees, having to keep clients coming in, and likely having to manage some of the projects seems like it would be too much for a single person to manage.

Well, many consultancy owners I talked to didn’t grow or scale on their own. Instead, they generally partnered heavily with a vendor.

Tableau, Looker, GCP, Salesforce, dbt, Snowflake, and a whole host of other solutions are ripe for consulting.

These solutions generally don’t want to spend a ton on professional services, but they need help deploying their solutions successfully. Thus, most individuals that grow a consultancy fast have some form of relationship with a product exploding at the mid-market/enterprise level. These projects require larger teams, and thus, you don’t get stuck with the 1-2 employee problem.

From here, you follow the standard consultancy playbook. You charge a considerable margin on top of your consultants’ time and have one strong principal consultant and likely a mix of mid to junior consultants making up the rest of the team. This is why some consultancies will boast that they don’t hire people with less than X experience; they like to sell that they are a premium brand. 

Whichever way you go, generally, you need to have a vendor or two that can help push larger projects your way.

Another possible method of scaling is building a product. Since consultants are often called in to fix problems, they see, well, a lot of problems.

Many times you’ll see the same problem over and over and over again. Now you could make $50-200k per project fixing the same problem over and over again. 

Or, you might be able to build a product worth tens, if not hundreds, of millions of dollars by scaling out a solution (another option is to invest in products you believe will solve the problem). The point is you can be the full solution. You know the problem very well, and you can package a clear product. 

In order to go from making a few hundred grand to some 7 or 8 figure number, , you’ll likely need to somehow scale. Whether it's a product or creating a large consultancy, you’ll eventually run into a problem with people not wanting to pay more than a few hundred dollars an hour unless you have a very unique value prop.

So Should You Start?

There are pros and cons at each stage of your consultant growth. Some of you reading this might stay at the side-hustle level. You might enjoy the stability of a full-time role.Also, having an extra $10-60k a year is nice.

But you might get to the point that you need to quit.

You need to make that call. 

If you do, my thoughts are that you need to ensure you have a clear idea of where your prospects come from. That way, you can double down on those areas as you shift from the stability of a full-time paycheck and join the freelancing world.

And from there, maybe you’ll scale out a full-blown product or consultancy.

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Also, we are currently oversubscribed for the beta of the course I am putting together starting May 1st.

So if you’re interested in joining in the next cohort, you can sign up here!

It’ll likely start after June 15th.