Tim Bonno doesn't hedge on the question of how he'd prefer to earn a living.
“It would be nice to fall into another full-time position,” says the 56-year-old Ballwin resident. “But I have to pay the bills.”
So instead of a job with full benefits and a commensurate salary, like the one that sustained him during the 30 years with AT&T, Bonno now supports his family in the manner of thousands of professionals waylaid by the recession.
He's a consultant.
In the gallows humor of the unemployed, consulting is a euphemism for “can't find a job.” Yet as Bonno and legions of others are discovering, self-employment is a potentially lucrative alternative to flipping burgers at a fast food joint or greeting customers at a big box retailer.
Steve Epner, a longtime consultant and a facilitator of Single Shingle Shop symposiums held at St. Louis University and other venues, notes that consulting is equally appealing to employers struggling to regain footing in an uncertain economy.
First and foremost, consultants are low overhead providers. A consultant works contractually for a set amount of time on a dedicated project at a specified salary. So they can meet the immediate needs of a company without burdening the firm with the cost of health and retirement benefits.
With companies still cautious in hiring, now might be the time to dive into the consulting business. Before making the leap, Epner advises workshop attendees to follow the axiom of the Boy Scouts by being prepared.
For the displaced executive, information technology specialist or engineer, that means laying the groundwork for a consultancy immediately after a layoff.
The process begins with identifying the area of expertise that will set the business apart from other independent contractors. Epner stresses that the commitment to a brand is often the barometer that separates success from failure.
“If you aren't passionate about what you're doing, fear can get to you,” he said.
It's imperative, Epner adds, that the successive steps leading to the business launch address financial issues, starting with the worth of a consultant's time and expertise.
Just as critical is budgeting every dollar of income and expenditures during the first year, if not longer, that the consultancy is operational.
Health insurance premiums can pose a big obstacle. If another member of the household can't provide benefits, Epner suggests forming or joining a collective of other independent contractors to offset the cost of health, dental and vision insurance.
But he differs on the execution.
Where Epner supports the establishment of so-called “single-shingle shops,” Finkelstein is an advocate for boutique consulting firms like his.
“Most people become a single-shingle shop by default rather than choice,” said Finkelstein. “And when you take a default position versus a choice position, you're always going to be in trouble.”
Finkelstein suggests there is power in numbers. Even small numbers.
Single shingle shop proprietors toil in solitary basement offices, schedule business meetings at local coffee shops and generally keep their own counsel.
Finkelstein and his partners operate independently.
But they report each day to an office in Chesterfield, consult with clients in a conference room and integrate collaboration into the their business routines.
“Be part of a team, part of an organization,” Finkelstein counsels.
A 40-year corporate veteran, Finkelstein embarked as a small group independent consultant in 2006. He frequently coaches other corporate refugees interested in following his path.
Bonno moved into the consulting world in 2008 in the wake of a premature but amicable parting with AT&T.
“I'm too young to retire, and I still have young kids at home I have to get through high school and college,” said Bonno, who along with his wife is helping to raise his grandchildren. “We took proactive steps when we saw the writing on the wall and made sure all the financial ducks were in a row.”
The ducks included paying off the mortgage and locking AT&T into a fixed rate for health benefit premiums prior to leaving the company.
“I feel like I'm blessed that these contracts keep coming in,” said Bonno. “I was kind of forced into it, but I'm making the most of it.”
Epner says many consultants see another blessing in working for themselves: As independent contractors they no longer need to worry about being downsized.
The single shingle proprietor, he said, “is not easily outsourced.”
Finkelstein nonetheless cautions that consulting is not an automatic ticket to riches and lifelong security.
Over the years, in fact, he's seen far more consultants fail than succeed.
And that, says Epner, is another contingency that fits into the mantra of being prepared.
“The worst that could happen," he said, "is you could do it for a year and then go back to a real job."
QUOTE OF THE WEEK
"After two years of expansion without much gain in employment, we're finally hitting the point where firms need to begin adding people in order to meet increased orders. There are still risks ahead, but if you could just stop the clock right where we are now, you've got a recovery that is gathering some momentum; it appears to be self-reinforcing." " Steve Blitz, ITG Investment Research senior economist.
BY THE NUMBERS
32,823 – Missouri workers that lost a job during 2011 in a mass layoff of more than 50 workers – the third lowest total since 1996.
50,000-plus – Missouri workers that lost a jobs in a mass layoff during 2009.
Source: U.S. Bureau of Labor Statistics
“Only about a third of the drop in the labor force participation rate is accounted for by those who say they want a job, and only about 15% by those who want a job and are also of prime working age – i.e., between 25-54.” - Rana Foroohar, a business and economics editor for Time magazine, citing a Barclays Capital study that points to baby-boomer retirements as the core reason the post-recession U.S. workforce participation stands at 63 percent. She calls the idea that thousands of the retirees might return to full-time jobs an “urban legend.”
Source: Time magazine