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Wednesday
Sep252013

Contracting or Consulting?

Earlier this week a colleague introduced me to someone who is considering going contracting or consulting. The request was to have a chat to guide him on becoming a freelancer. The freelancer's journey is one I have been on for 5 years now.

In discussion it became clear the first thing he needed to settle in his mind was to distinguish being a "contractor" from being a "consultant" - initially he thought they were the same thing.

A "contractor" primarily solves a capacity problem for their customer. The customer simply doesn't have enough staff, and brings in a "contractor" to get the work done.

However, a "consultant" also solves a capability problem for their customer, while sometimes also solving a capacity problem like a "contractor" would do. A "consultant" is bringing expertise (capability) that the customer's team do not have - even if they have the capacity to do the work.

Obviously it is not a choice between being a "contractor" or being a "consultant" as there is some overlap - but it is helpful to know where, as a freelancer, you will position yourself on the spectrum.

I have found that operating toward the "consultant" end of the spectrum gives you the opportunity to add more value to your customer due to the expertise you are bringing that the customer does not have - which means your work as a freelancer is likely to be more interesting, and satisfying.

It also means you have the opportunity to price your services at a higher rate, and thus be rewarded for the value you are adding, as well as the time you are spending.

By being able to charge more also gives you more income cover for gaps between projects - "contractors" rely on being 100% billable to a much higher extent than "consultants" should need to.

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