Recession. Market downturn. Doom. Gloom. If you pay attention to newspaper headlines, you may be wondering if you should give up your consulting dreams right now. In spite of all the negative headlines out there, a recession may actually be your ticket to success. That’s right — consulting in a recession can be a great idea.
I started consulting in the 1990s. As a result, I’ve seen the Japanese banking fiasco, dot-com crash, September 11th fallout, stock market contraction and the drop in the US dollar, among other things. Each one of those scenarios posed potential difficulties for me and my clients. Yet I’ve kept my head above water (and a roof over my head) the whole time. Why? A recession may actually be good for you.
Why a recession may help a consultant:
- Fears of a downturn may send your competitors and wannabe competitors scurrying. More opportunity for you.
- Companies inevitably look to cut costs in recessions – and will outsource more work to independent contractors.
- Businesses will worry about long-term commitments and instead look to hire consultants to get projects done, instead of taking on permanent employees.
- Firms will realize that they’re going to have to work harder to keep their clients happy – and they’ll need the specialized expertise of consultants to do so.
- Independent consultants tend to have lower costs than do big consulting agencies. You may find it easier to get a handle on your cost structure than a giant firm with long-term leases and other commitments.
- A weak US dollar can make it easier to pick up clients in Canada, the UK, Europe and other countries with stronger currencies.
- People who start and run consulting businesses during recessions need to hone their business management skills, making them stronger in the long run.
What do you think about consulting in a recession?
Related to consulting during a recession
- Emergency fund – how big an emergency fund do you need?
- Finance for consultants
- Setting consulting fee rates
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