The Math Behind the Unique Value Proposition of Independent Consultants

The Uber economy has started to disrupt the traditional consulting industry with numerous consultants leaving big firms to do independent, freelance consulting.

The value proposition of these independent consultants is that they provide almost the same value as traditional consulting firms at a fraction of the cost. As an independent consultant, I get asked about this a lot. People want to know how this is possible, if at all.

Here’s my two cents on how independent consultants make this happen:

1. Similar past training

Most independent consultants have worked on similar projects (in terms of size, scope, importance, etc.) in their past jobs. They have solved the same problems for similar clients. In short, you will find that most independent consultants have the same skill set and experience as employees of a consulting firm.

2. Client-centric vs. boss-centric attitude

Employees at a consulting firm often to work to please their boss who may or may not be aligned with the goals of the client. In the case of independent consultants, the client is their boss and there is no other stakeholder they need to worry or care about.

3. Vast network of elite consultants

Independent consultants often have a large network of other elite consultants. Most consultants will collaborate with other consultants to cover for any skills or resources gap. This allows for quick and affordable scalability and ensures that the client gets the best minds working for them.

4. Lower project minimums

Sometimes you need an expert just for a one-off project that is too small for a consulting firm. Consultants have project minimums too, however, their threshold is much lower than that of consulting firms. This allows clients to get the best consultant to work for them on even the smallest of projects.

5. No overheads

The above four points talk about how consultants provide almost the same value as consulting firms. This point talks about the cost factor. Independent consultants have much lower overhead. HourlyNerd has created a chart that compares the cost structure of hiring a consulting firm vs hiring an independent consultant through HourlyNerd:

Please share your thoughts on this subject.

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