HR Professionals as Entrepreneurs

08
Aug 2022
215
A light bulb is surrounded by colorful splashes of paint.

Author:  Ada Tai, MBA, CPHR, SHRM-SCP

Entrepreneurship seems to be a very trendy word and an occupational choice these days. In my recent conversations with various HR professionals, a common question arose: How can HR people become entrepreneurs? In other words, if I want to set up my own HR consulting practice, how do I start?

Before we dive into “how” to start an HR business, let’s first understand what being an entrepreneur means. My favourite definition of an entrepreneur is: “An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards . The process of setting up a business is known as entrepreneurship.” 1 This definition emphasizes a few key takeaways: first, being an entrepreneur is a journey of inventing and building something from the ground up. During this journey, you will experience many challenges and joys because of the uncertainty and the potential benefits you will gain through a successful venture. Running an HR consultancy as a business entails helping clients solve problems.

1. A business starts with an idea. (What’s your niche?)

Generally speaking, for HR professionals to utilize their established knowledge and skills, the idea for a business is likely to provide general or a specific area of human resources support, and/or offer training and coaching services. HR consulting is part of the large Management Consulting industry. In the US, the Management Consulting industry revenue is estimated at $250 billion 2 .  In Canada, the industry revenue is estimated to be about $22 billion 3 . Human resources consulting services account for roughly 12% of management consulting revenue 4 .

To set yourself up for success, several key questions to consider include:

  • Do I want to be a generalist or a specialist?
  • Do I want to be a business person or a technical expert?
  • Do I want to eventually build a company or stay as a one-person shop?
  • What is the niche that I can offer to clients?

2. Narrow your ideas down to concrete plans. (What’s your value proposition?)

Although many people prepare great plans, to be effective, these plans need to be tailored to the wonderful service you will provide. Since being a consultant is to solve clients’ problems, your value proposition should clearly communicate the benefit that clients will receive by using your service. In other words, a potential client should be able to distinguish what you offer from the offerings of other consultants. Questions to consider include:

  • Who is my target audience? What are their needs and wants?
  • How will I offer my services? When? Where? And, How?
  • With whom am I competing? What distinguishes my service from theirs?

3. Set up your business or join another business. (Let’s get serious.)

To take the HR consulting idea to the next level, you may set up your business as a Sole Proprietorship, Partnership, or Corporation. Any such form has its pros and cons. Then you will use your creativity to come up with an attractive business name, register for a business number and GST, open up a business bank account, etc. A clear and useful article in which this sort of information can be found is, “Your ultimate guide to starting a business in Canada”. 5

A large portion of the entrepreneurs-to-be choose to join other firms as freelancers or contractors, either full-time or part-time. This gives these consultants who are not ready to go all in on being their own boss a taste of being an independent consultant without bearing the full risk. They also use this option to test whether there is a demand for their skillsets. Some HR professionals decide to be a member of growing boutique companies. Others welcome the opportunities and challenges that large international consulting firms present.

4. Marketing, marketing. (And marketing)

By putting your business plan together, you now know who your targeted audience is. Using different methods to reach your potential clients and convince them to use your service is the magic of marketing. Setting up a website, and creating an email signature and business cards are the fundamentals to get one started. Once you generate a budget and are ready to go one step further, some HR entrepreneurs choose to engage marketing experts who specialize in social media establishment, search engine optimization, advertising campaigns, etc.

What I have found most useful is to create a professional and consistent presence for yourself and your business. This can be done by actively participating in in-person and virtual networking events tailored for your potential clients. Nowadays, while businesses are fighting to hire and retain talents, I find it quite easy to start a chit chat with business representatives about how HR consultants can add value. Be ready to give your elevator pitch about your credentials and your business offerings wherever you go. Furthermore, content marketing has also proven effective. It includes presenting publicly and creating educational articles, blogs, books, videos, podcasts, etc. The key emphasis here is “content.” I firmly believe that without valuable content, marketing becomes meaningless.

5. Let’s get to work! (No promotion can replace quality results.)

Now you have identified your niche area and value proposition, registered a business and utilized marketing efforts to engage one or more clients to understand potential solutions you can offer, the next step is to put a proposal together and present it to the client for approval. Several good templates are explained and included in the book, The Basic Principles of Effective Consulting , by Linda K. Stroh 6 .

Once the agreement is signed by both parties, you will immerse yourself in planning your project approach and methodologies, diagnosing the client’s issue, proposing solutions, gathering feedback from the client throughout the process, and implementing the solutions (if required). In my experience, great consultants are also great business people who can see client’s issues from 3000 feet and offer scalable and sustainable solutions.

Many of you are probably already performing the HR consultant role for your organization as an internal consultant. You may have also helped friends fix resumes, advised your family about workplace situations, etc. In this sense, we are all consultants utilizing our expertise. In my recent webinar, “ HR Entrepreneurs - Have You Ever Thought About Becoming an HR Consultant? ”, invited and hosted by CPHR AB, I shared that to be an effective consultant in this competitive environment, it is critical that we adopt a life-long learning approach with the ability to continuously innovate. The problems we are helping clients solve today may not be the problems the clients face tomorrow.

Reference:

1 Hayes, A. (2022, July 19). What is an entrepreneur? Investopedia. Retrieved July 25, 2022, from https://www.investopedia.com/terms/e/entrepreneur.asp

2 Industry market research, reports, and Statistics. IBISWorld. (n.d.). Retrieved July 26, 2022, from https://www.ibisworld.com/united-states/market-research-reports/management-consulting-industry/

3 Government of Canada, S. C. (2022, February 17). Consulting Services, 2020. The Daily - . Retrieved July 26, 2022, from https://www150.statcan.gc.ca/n1/daily-quotidien/220217/dq220217e-eng.htm

4 Industry Overview: Management Consulting in Canada. Industry Overview: Management Consulting in Canada | Small Business Accelerator. (n.d.). Retrieved July 26, 2022, from https://sba.ubc.ca/industry-overview-management-consulting-canada

5 Your ultimate guide to starting a business. BDC.ca. (2022, July 20). Retrieved July 25, 2022, from https://www.bdc.ca/en/articles-tools/start-buy-business/start-business/how-start-business-canada

6 Stroh, L. K. (2019). The basic principles of effective consulting. Routledge, Taylor & Francis Group.

 

I see. I hear. I experience . is a column created by and written by Ada Tai, a chartered member of CPHR Alberta. The column is written in a blog format where Ada and invited co-authors will present their own experiences and interpretations of the world of human resources and its impact on business management. This and the subsequent posts are copyrighted materials by the author(s) and only reflect their personal views, not CPHR Alberta’s.

Author bio: With an MBA Degree, a CPHR, and an SHRM-SCP designation, Ada Tai has been working as an HR professional in a variety of industries for over a decade. Through her consulting firm, Ada and the team provide a variety of strategic and pragmatic management consulting services.  Ada’s public speaking skills have enabled her to be regularly invited to speak about HR, people management, career search, and networking topics throughout the province. She is also a well-respected Instructor at the University of Alberta and MacEwan University.

Contact information:

BadaB Consulting Inc. provides a wide range of human resources solutions, including Strategic HR and Succession Planning, Organizational Design & Development, Diversity & Inclusion Program, Merger & Acquisition Support, Recruitment, Skills Development Training, Compensation Design, Performance Management, Workplace Investigation, Policy Development, etc. Another specialty of BadaB’s services is a personal job search and career coaching. The team has effectively helped over 500 people to find work.

 

The views and opinions expressed in this blog post belong solely to the original author(s) and do not necessarily represent the views and opinions of CPHR Alberta.

The views and opinions expressed in this blog post belong solely to the original author(s) and do not necessarily represent the views and opinions of CPHR Alberta.



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