If you have decided that your scientific expertise may be of value to the wider world outside academia, it is not enough to simply hang out a shingle and expect it to come to you. Any first-year MBA knows that the success or failure of a business usually hinges on the amount and quality of the thought that goes into planning its launch. As Part II of this series shows, developing a detailed strategy for your venture gives you an opportunity not only to perform an in-depth analysis of its viability but also to assess your personal preparedness to enter the world of business.
Now that you have decided that the moonlighting consulting life is for you, it is time to start putting together a plan to make that decision a reality. For most of us scientists, that means putting together a business plan, that vague nebulous entity that we have heard every business needs but that we know absolutely nothing about. So we end up dreading the task and rationalizing all sorts of reasons why we can get by without one. Or we contract out the project to someone with an MBA or to a university small business centre that will use your company as a case study for their students in return for a discount on their fees.
I highly recommend taking the time to develop a very strong business plan for your academic consulting business and to do it yourself. Besides the significant cost savings, you will reap other rewards. As Charles Boulakia pointed out, in his excellent Next Wave series on designing business plans, "Too many people launch themselves into business without a full idea of what it will mean to their lives, or even where their business will lead." Moreover, he adds, "A business plan helps entrepreneurs to be more successful, by forcing them to look at all the issues and problems their business might face." Therefore, doing it yourself (which is really the heart of what consulting businesses are all about!) provides another excellent opportunity for you to see exactly what you are getting yourself into. Besides, unless you find an MBA recipient with specialised knowledge in your field, that individual will not be able to help you maximise the marketing or networking of your business.
Where you will absolutely need to seek external assistance is on the legal and accounting aspects of the business. The business world is often the complete antithesis to the free and open exchange of information that we take for granted in academia, and you need to protect yourself from falling afoul of things such as nondisclosure agreements and intellectual property law. Therefore, it pays to retain legal counsel that will, in addition to the setup and maintenance of your company, provide advice on new contracts and legal wrinkles as they appear. Likewise, an accountant you can trust is invaluable not just during year-end and tax preparation time, but also in setting up a smooth accounting system for you to implement--one that will minimize administrative workload and enable you to devote your precious time to building the business.
Needless to say, you will still be responsible for the day-to-day administration of your business, even if you subcontract a temporary bookkeeper to come in on an irregular basis to keep the numbers in line, so it is still essential to understand the basics of business law and accounting systems.
One of the true essentials of developing an academic consulting business is determining a systematic plan for growth. You need to decide right from the start the level of commitment to the business that you find comfortable, keeping in mind that you have a full-time job as an academic and a life outside of work. (Which again brings you back to the original question posed in my last article: Why are you starting a business in the first place?) You must outline exactly how many hours you want to commit to the business because, assuming your business idea is sound and you do a good job, the chances are that your reputation will build and that more customers will come banging on your door. Therefore, you need to think about what you'll do when demand for your service begins to exceed your commitment level. Will you simply refuse to take on additional clients and contracts? Will you hire people to work in your company? Or if things really take off, will you take the leap from academia to run your business full time?
If you take the middle option and hire employees, you will need to be prepared to handle a heavier administrative load (e.g., hiring, payroll, worker's compensation). You will also need to recognise that you are making a commitment to bring in enough income to meet payroll requirements. Furthermore, we all remember just how important it was as a new academic to pick the best possible individual for your first graduate student, and the same thing applies to the importance of selecting an excellent first employee. Not only will the two of you be building the business together through its most critical phase, but the first employee also has the biggest effect on the company culture and all subsequent employees.
In my case, I was extremely fortunate that my first employee was my first graduate student. This person had superb professional qualifications, and we enjoyed an excellent working relationship. However, although hiring former or current students might be the ideal solution, the employer/employee relationship can be quite different from the one between the advisor and student, so you should be prepared to see the relationship evolve. Hiring students also brings about the potential for conflict of interest from the university's perspective, which I will explore in depth in the next article in this series.
The other areas to brainstorm thoroughly during the setup phase are identifying, and possibly setting limits on, the potential market for your services. Who will actually spend good money to pay for your time and expertise? You may already have some contacts in industry, and these form an excellent first step. However, because as a consultant you will not necessarily be inventing and selling the newest widget, this is where some outside-the-box thinking is required to truly understand your full potential market. For instance, your technical knowledge of a broad range of topics in your field, along with an ability to appreciate the potential applications of new ideas, may make you invaluable to investment firms, venture capitalists, and even patent lawyers trying to get a handle on the investment potential of new companies or technologies. Obviously, understanding your market will also help you plan the future of your business by giving you a good indication of the growth potential.
So it should be obvious that you have a lot to think about before hanging out your shingle as a consultant. Rather than look at this as another hurdle, use it as an opportunity to truly understand your new role. Indeed, the process can teach you something about yourself as well as what makes you unique--both as a scientist and as a person!