The two most popular paths high achievers take when they leave corporate is to either start their own consulting business or start their own coaching business. In this blog post I want to help you understand the difference between the two so that you can you know which one is right for you AND set yourself up for success.
Consultants and coaches are both executive advisors. The difference between the two is the way that they advise their clients.
As a consultant - your role is to enhance leadership and organizational capacity. You help your clients by providing an independent point of view on the root causes to organizational challenges, recommending solutions to resolve those challenges and facilitating leaders to come to agreement on how to they will work together to implement those solutions.
Consultants are not leaders in that they are not accountable for the implementation of solutions. They may support implementation with advice, project management support and process leadership. Consultants are also not an "extra pair of hands" that merely implements what a leader asks for. They are personally powerful individuals who guide their clients to make good decisions on behalf of the realm they are in charge of.
Coaches on the other hand are more focused on the leaders themselves and helping them improve their personal and leadership effectiveness. A coach helps individual leaders develop clarity on what he or she needs to focus on and create action plans to achieve those goals. They also provide accountability and support to ensure effective implementation of development plans.
Coaches are not therapists. And they are also not performance managers. Leaders who are reticent about holding their direct reports accountable for poor performance might seek out coaches, which is not what coaching is intended for. Leaders who have the most to gain from an executive coach include:
Successful leaders who are:
High potential leaders who are:
As an executive advisor - you can be a consultant who also coaches or a coach who also consults. As long as you have expertise in both areas - you can and should offer both options when landing work with an organization as this is the fastest way to maximize your client impact and compensation.
A consulting business is a "business to business" (BTB) model where you get paid to improve an organization's results. A coaching business is a "business to consumer" (BTC business) where you get paid to improve an individual's results.
The easiest way to know the difference between these two models is who will be paying you - the organization or the individual and the expected ROI. If the person who is hiring you is using company funds and your advice delivered either through a consulting or coaching assignment is designated to help the organization improve, it's a BTB business.
If the person who is hiring you is designating a part of their personal income to pay you, it's a BTC business.
The reason why this designation is important is because of the benefits and drawbacks of each model and what it takes to make them successful.
The benefits of this business model is that you do get control over your time and earning power, there's lots of opportunity for travel, you can support organizations and your per contract and per client fees are significantly higher. This is not because companies have more money than individuals but because the people who are hiring you are using other people's money. As long as you're skilled at sales and negotiations, you can easily land a single a client that could provide a good portion of your annual income.
The drawbacks of this model is that your need for having a credible online presence, stellar content and strong contracting skills is higher. If working with organizations is new to you - you need to invest time and money in growing those skills. And since you're working with companies - you need to live near an airport so you can easily get to a client's site when needed.
This is a good choice for you is if your passion is about helping organizations improve and creating workplaces that serve employees, customers and the global community.
This business model also enables control over your career and time as well as total creative and location freedom. This model allows you to work from anywhere. And it gives you the means to make a difference faster as you are supporting individual change vs. organizational change which is substantially more challenging.
The big downside is that figuring out how to create the right offers and pricing strategies so that your business is scalable and you are not in a trading time for money trap. There is a much higher need to master marketing, especially digital marketing and all its moving pieces and parts, as you have to generate higher volumes of leads and land more clients because your per client fees won't be nearly as high as a BTB business.
This is a good choice for you if location independence is a priority and your passion is seeing individuals grow in the way that they deem important (vs. what a company deems important.)
Choose the business model that suits your strengths, passions and motivates you to invest your time and talents towards making it a success. Don't allow fear to decide or what seems the most logical as that is not a recipe for long-term success. If you don't love your business, your clients will know it and it will interfere with your results.
Do what you love and you'll experience all the benefits of what you personally want to achieve by virtue of leaving corporate and starting your own business. You only have one life. Don't settle for anything less than your true potential.
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