The downturn isn’t

that bad

A free-lance consultant finds opportunities in current slump.

By Russ Korins, BR ’94

For all of the anxiety and uncertainty

in New York over the last six

months, one of the most compelling

pieces of news is that entrepreneurial

activity did not simply come to a

halt. To be sure, in September and

October, other concerns greatly

overshadowed professional endeavors.

But by the new year, it was

clear that the entrepreneurial itch

to build had endured even extremely

taxing times. Just in my

circle of friends and contacts from

my work in the Internet business

over the last few years, I knew several

people either starting new companies,

planning to start businesses

in the near future, or involved in

very early stage enterprises. The Big

Apple’s entrepreneurial vibe may

have been handed a reality check,

but it had not gone away.

Given the persistence of this activity,

the continued slow pace of

the economy has been a blessing in

disguise. I am a marketing communications

consultant (of sorts) who

helps small companies articulate

positioning statements and value

propositions to their stakeholders.

Precisely because companies have

been careful with cash, I have found

a considerable opportunity to develop

my own client base. The reasons

may indicate similar opportunities

not only for other free-lance

business writers, but also designers,

programmers, and other professionals

whose work takes place

largely in the form of projects.

To understand why a recession

may actually provide free-lancers

and consultants with entrepreneurial

opportunities, it is helpful to

think about a company’s perspective

in creating and maintaining a

full-time position. When a company

advertises a full-time position, it

demonstrates not only sufficient

work for a full-time employee at that

time, but also an expectation of sufficient

work for some time to come.

Without that expectation, the administrative

and overhead costs of

maintaining that position—overhead,

benefits, and so on—would

offset the advantages of having a full time

employee.

In uncertain times the short term

time horizons of both the company

and the consultant can provide

a mutual advantage: both can hedge.

The company can hire a temporary

or part-time consultant for the

project it needs this month, without

worrying about what it may need

next quarter. And the consultant can

accumulate engagements of various

sizes (and gain wide-ranging experience

and contacts) without concerns

of pre-empting opportunities that

may arise in the near future.

So if you have a skill set that might

be adaptable to consulting, probe

your network for opportunities with

confidence. By asking around to see

who could use part-time or freelance

assistance, you may be offering

just the right solution for early

stage or fast-changing companies

with uncertain futures and concerns

about cash flow. You may be presenting

prospective clients with an

opportunity they had not envisioned

before you suggested it—the very essence

of entrepreneurship.

Just remember

that the flip side of this is

true when the economy shrinks.

Consultants and free-lancers are the

first to go because they’re the least

painful to lay off. But what appears

to be an economy on the upswing

may provide a special opportunity.

In building this consulting practice,

I have also learned that the importance

of securing a first client is

more than just economic—it also

plays into psychology. Landing a first

client, even at a reduced rate simply

for the purpose of picking up a client,

provides an excuse to get in

touch with all your contacts and

share the good news. I have found

that entrepreneurial characters are

often curious about what others of

their own type are doing. You may

find, as I did, that the number of lunch

and coffee invitations goes up just

by telling other founders and builders

that you’re working with another

fast-growing or evolving company.

More importantly, many companies

will not hire a consultant

unless he or she is already working

for someone else in the field. This

also plays into simple psychology:

almost nobody wants to be the first

to take an unknown risk. One way to

solve this chicken-and-egg problem

is to offer your services free of

charge to more flexible companies

(such as companies where you have

friends or family who can make a

case for you). Nobody has to know

you’re doing work gratis—while

your “rate” may be public, specific

deals you make with clients are understood

to be confidential. And it

may help you get the ball rolling.

I am just as eager as the next person

to see a full economic recovery

(with a little less irrational exuberance

than last time). But when that

happens, more early stage companies

may be more receptive to assuming

the risks of hiring full-time

employees, reducing the opportunities

and benefits of mutual hedging.

Until that happens, however, the

uncertain economic climate provides

a special opportunity to work

part-time with multiple companies,

accumulate diverse experience, and

be especially well-positioned for the

next phase of economic growth.