Should You Be a Consultant or Hold a Real Job?

A reader asked:

I filed a DBA a number of years ago when I started consulting. Eventually, one of my primary clients offered me a high-paying position, which I took. Recently, however, the company was sold and the new owner laid most of the high-priced employees off. This included me. Now I'm undecided what to do. Should I look for consulting work and hope to land a "real" job like last time? Or should I market myself as a job seeker, but take consulting work as it comes to me?

ANSWER: Your dilemma is proof there are such thing as "good problems."

The short answer: market yourself as a consultant, not an employee. Of course, if an employer once again makes you a fantastic offer, you'll always have the option of accepting. Here's the rationale:

More money. Rates for consultants vary depending on field of expertise. But let's say you charge $100 per hour and, on average, have 20 billable hours per week. That's $2,000 per week, or roughly $104,000 per year. Most full-time jobs in America don't pay six figures. And in this scenario, you're billing that much for part-time work (although the remainder of your time would presumably be spent marketing, handling the books, etc.). If an employer would pay you substantially more than you'd make consulting, however, you may want to take the job. "Substantially more" would include compensation for the loss of your tax deductions and constantly educating yourself on how to be a consultant (or a better one) amongst other things.

Perceived as an expert. As a consultant, you market yourself as a leader in your field. Now, in addition to (usually) making substantially more than an employee who works for just one company, you're demonstrating your expertise to many companies. This leads to word of mouth advertising, which gets you more consulting gigs. These gigs can act as references for even more consulting work - and different kinds of consulting work. They can also help you land a "real" job in the future if you desired.