Management Consulting - Home Business Profile of RCMC
Ever thought about management consulting as a business of your own? Well, I didn't either, but it turned out to be the best decision I ever made. Allow me to introduce myself, I'm Clair Schwan, the host of this site, and I want to tell you about one of my small business ideas called RCMC located in Cheyenne, Wyoming.
After only a few years out of college, I grew tired of my position as a security inspector with the federal government and seized an opportunity one day to use my skills as a security consultant. I always knew that working for the government was going to be a stepping stone, but I never envisioned clearly where or when I was going to step off.
After several years as a consultant, I had an opportunity to help out with a maintenance consulting project. The service area looked promising, challenging and interesting, so I continued to get ever deeper involved until I was a maintenance consultant.
As it turned out, it is among the best moves of my career because it led to starting my own management consulting business after acquiring the requisite skills to do so. If you have ever had an interest in being a management consultant, this is my happy story about a “onezee” that made it happen.
The company is called RCMC. The principal focus of this one man consulting firm is providing management consulting, maintenance program and technical analysis, and general support to maintenance organizations in the electric utility industry. The initials RCMC stand for Reliability Centered Maintenance Consultants, but I never used the full name, just the initials.
I have no regrets about starting the business. It would have been nice to start it earlier, but I think the timing for the business was just about perfect when I consider my skills, experience, contacts in the industry, and my need for higher income.
The photo to the left shows me training at a conference in Denver. It was one of the first industry events as a "onezee".
A big part of management consulting is training. It's a task that many customers will want you to perform so they stay up on new techniques. And, it's a good way to let your customers know who you are and what you can do.
It all started when…
At the end of 1998 I moved to Cheyenne, Wyoming to get a fresh start after a divorce and having hit financial bottom. Cheyenne provided a good place for a start fresh; I didn’t know anyone, the cost of living was low, and there were no state income taxes to burden me as I crawled out of the financial wreckage.
It didn’t take me long to realize that I owed more than my salary could pay back in a reasonable amount of time. So, I was forced to make a decision about surviving with a good salary working for another management consulting company, or making much better income with a management consulting enterprise of my own.
I didn’t have enough resources to comfortably fund a management consulting business where air travel, hotels and meals out would be a regular activity. I also knew that I wasn’t going to get any more funds as the months passed by, so I sat down to think about the risks and opportunities over a bottle of wine.
After I sipped half the bottle and thought carefully about my future, I walked over to my desk and dialed an associate of mine in Denver. She wasn’t there, so I left her the following message: “This is Clair. Damn the torpedoes, full speed ahead. The name of my new company is RCMC.”
Well, that's how some small business ideas get going, I suppose.
How the business grows…
The success of the business is partly attributable to the momentum that I had achieved as an employee of my former company. Business is done between people, not businesses, so the personal relationships that I had established would help me along. Much of my being part of the electric utility industry was due to an association with an industry research group call EPRI (Electric Power Research Institute).
EPRI was in many respects my “window on the world”, and many contacts for project work came from them. Having an association like this was very helpful to say the least. It made “cold calling” for potential work almost obsolete.
The photo to the right shows me and some of my associates during a weekend meeting for business planning.
Having associations with talented people is a key to success. If you can find a way to team with others, where there is mutual benefit, then it can work out very well indeed. Competition isn't always necessary or the best approach when you provide management consulting services.
Benefits of the business…
There is no question that being in business for yourself is very beneficial. Let’s look at some of the benefits that I realized from running my own management consulting business:
- My daily email volume dropped to a single digit. I received only important emails from that day forward. This allowed me to focus on my business and my customers.
- Income instantly doubled. How’s that for a benefit? Instead of half of my hourly rate going towards the large overhead of the “mother ship”, I was able to keep those funds to invest as I saw fit – and offer my customers a slightly lower hourly rate as well.
- Net administrative burden went down. Sure, you do more time keeping and invoicing, but you don’t have to attend meetings and phone conferences that the large and cumbersome corporate office thinks are necessary. Instead of hours wasted, you get to use that time for productive purposes.
- Flattened the organization. When you are an organization of one, it is a snap to run the business. There isn’t anyone to confer with – you make all the decisions. You decide when to work, where to work, what to buy, how to invest, and whether an activity is good for you and your business. You only have one boss – your customer, and that’s the way it should be.
One of the best benefits of owning your own business is that you have no one to blame, but that also means you are the only one that basks in your success.
Just think, no boss to get rewarded for all the hard work that you do. Wouldn’t that be nice? It's been one of the most rewarding parts of having my own management consulting company - my success is because of me.
The photo above right shows two of my customers from Colombia during a visit to Cheyenne. They came to take advantage of my management consulting services. It was one of the few times that I worked for a foreign organization, but never left the country. The break in the travel felt good, and we had a great time in Cheyenne.
Resources you’ll need…
The most important resource for a consulting business is you. It is the same with any other company, the most important resource is the people.
In management consulting, you need to have several strong skills. The following highlights what I believe to be the core skill set that will help ensure success for nearly any consulting operation:
- Technical – experience in technical analysis and auditing are key to winning the confidence of customers. They need to know that you know what you’re doing and talking about.
- Communication – if you are going to consult, you have to write proposals, prepare reports about your work, and persuade others that your views are valid. Clear oral and written skills are essential.
- Reasoning – management consulting is based on reason and logic. This is important because sometimes very important decisions are made based on your input to your customers’ process.
- Management – you’ll need management skills for running your business, and some level of management experience to be able to appreciate the bigger picture of how your customers manage their operation.
Another resource you’ll need is funding. Funding will be important for initial travel costs to meet with prospective customers and startup your first projects. Funding will also be necessary to keep you financially afloat while you wait for your first customer payment.
You’ll also likely need a laptop computer, Internet access and a phone service with unlimited long distance calling. These are important tools for communication with your customers, associates and business partners.
If you get a portable printer with your laptop computer, then you have a traveling office.
The potential for income in a management consulting business depends on the kind of consulting you do, the market you’re in, and the rates you charge. Gross income potential can range from $80K to $400K for a “onezee” working full time as a consultant. If you peel off from another firm, like I did, then many of these variables will be known, and you’ll be able to estimate your annual gross income more clearly.
If you are just starting, then you’ll have to do some research and planning before you jump into management consulting with high expectations of monetary gain. That is where a business plan comes in handy – it forces you to do your homework so many of the unknowns are eliminated. The management consulting business can be lucrative, but like any other business venture, you’ll want to realistic in terms of expectations.
Challenges to overcome…
One of the biggest challenges of management consulting is the time away from home. Unless your customers are local, you’ll do a lot of travel and that gets old quick. It also takes up a lot of your time. When people would ask me what I did for a living, sometimes I would simply say: “I think all I do is travel.”
To the left is a photo of a training class that I conducted in Thailand. It's about 24 hours in transit to get to Thailand, but it's well worth the effort. Bangkok is busy, crowded, exciting and quite an adventure in management consulting.
Another challenge of the management consulting business is that you do most everything yourself.
You do the work, the time keeping, the invoicing, the marketing and so on. If you have experience doing this, it isn’t such a challenge, but it can be if you’ve never done it before.
The last challenge I’ll mention may be biggest; waiting patiently for income. Even if you find management consulting work right away, it will probably be about 3 months before you see your first dime of revenue. In the meantime, you still have expenses to cover – business as well as personal.
Overall, the challenges I have been through have been well worth the rewards of running my own management consulting operation. And, sometimes the rewards are unusual.
The photo on the right shows what kind of fun you can have once you establish a personal business relationship with your customers. The first fish I ever caught in the ocean was this 114 pound halibut, hauled into my customer's boat near Seward, Alaska. It was like pulling up a piece of plywood off the bottom of the sea.
Once I wrote an audit report that was read by a Vice President of one of my customers. That report set the standard for audit reports from that day forward, for the Vice President insisted that all future audit reports be as well documented as mine was.
I had raised the bar for my customers. In my eyes it was an achievement in management consulting, but the auditing department gave me a sarcastic, but friendly “thanks” for making their job more challenging from then on.
When I was teaching 6 gentlemen who had come from Korea to learn maintenance analysis techniques, there were problems with language and culture, as one might expect. I did my level best to make certain that these issues wouldn’t interfere with my mission to familiarize these gentlemen with the analysis techniques.
At the end of my 5 day training session, I was presented with a gift – a beautiful red apple that had been gift wrapped for the teacher. He then said: “We come here to learn and it is difficult because of the language; with you, there is no difficulty.”
Lastly, even though we weren’t family, and he was older than me, he extended the invitation to refer to him by his first name.
Both of these gestures were quite an honor for me. You have to know something about the importance of hierarchy in the Korean culture to really appreciate what those gestures mean.
Special message from our featured entrepreneur…
I have really enjoyed the management consulting business. It is easy to start up, and doesn’t necessarily require a lot of cash infusion. As long as you have what your customers need, and you have a “window” on the marketplace, you can do well.
Having a project right from the start is very beneficial, but it isn’t necessary. In the absence of “hitting the ground running”, you should be prepared to hold your financial breath for about 6 months (just to make certain you are comfortable).
A good way to start a management consulting business is to get your feet wet as an associate or as an employee of a consulting firm. There is nothing quite like learning by doing. I am thankful that I had really good training by senior people that helped make me smarter. I know they were good, because it really takes some effort to make someone like me smarter.
Anyway, if your small business ideas look anything like mine did, you'd be well advised to start planning for your success, and then get doing it.
Done with Management Consulting, take me back to Honest Home Based Businesses