Taking the leap to leave an established consultancy or M&A firm is scary. However, at Sweav, we have learned that many beliefs that stop people from making this change are just myths. In this article, we analyze and debunk six of the most common ones.

Myth #1. Landing a project is hard

The biggest insecurity for strategy consulting or M&A professionals is simple: “How do I ever land a project?” In reality, this is often easier than expected. There are basically two ways to land projects. You can market yourself, join a freelance collective, or do both.

One effective way to market yourself is to contact former colleagues who already took the leap. They often have a network of companies with high demand for talent. In addition, sharing your move on LinkedIn always helps.

Myth #2. You’ll be broke

The second biggest myth is that you cannot maintain your current lifestyle as an independent consultant. Now that we have addressed the insecurity around landing a project, let’s look at rates.

Rates depend on several factors. For example, the type of company matters, such as scale-up, NGO, or corporate. The type of project also matters, such as a short-term project, long-term engagement, or M&A deal. Finally, your personal experience plays a role. However, you can safely assume that rates are somewhere between €100 and €175 per hour. That means €800 to €1,400 per day.

Let’s say you work four days a week on average and take six weeks of holiday. That results in 46 weeks of work per year. At a day rate of €1,000, you make €184,000 per year. Not bad.

Myth #3. Forget about getting a mortgage

Since 2019, banks have become much more flexible when offering mortgages to freelancers, especially consultants. Generally, getting a mortgage should not be an issue if you meet specific requirements. For example, you need to do the same type of work as a freelancer as you did before at a firm. You also need to be registered with the Chamber of Commerce for at least one year. And, of course, you need enough income.

When banks calculate the base income, or toetsinkomen, for the total mortgage amount, they usually take 75% of your income from the previous book year. In our example from Myth #2, this would be €138,000. With a common loan-to-income ratio of 5.5, you would be eligible for a €759,000 mortgage after one year in business.

The primary Dutch mortgage providers that accept independent consultants are Florius, Rabobank, and Nationale Nederlanden.

Myth #4. You stop learning

Another common myth is that your learning curve will flatten once you become an independent consultant. It is true that you will no longer be surrounded by top-notch colleagues all the time. However, that does not mean you will stop learning.

In our experience, independent consultants grow in two ways. First, they learn how to take full ownership of their professional lives. Second, they expand their horizon beyond the consulting skills bubble.

Unlike at an established firm, you own all the work you do. You acquire the project, negotiate the rate, work side by side with senior clients and entrepreneurs, navigate the company by yourself, and manage the project content from start to finish. For most new independent consultants, this is a great learning experience.

In addition, stepping outside the 65-hour-a-week stress bubble can broaden your horizon dramatically. It puts you more in charge of your own life. As a result, it can open your eyes to new opportunities, such as starting your own company or working remotely from an exotic location.

Myth #5. You’ll be on your own

As an independent consultant, you no longer work in the same environment with intelligent, exciting, and fun colleagues under high pressure. Therefore, many consultants who start freelancing miss the social cohesion of the firms they left. However, that does not mean you are doomed to loneliness as a freelance consultant.

If you join a freelance community, you can still surround yourself with kindred spirits whenever you want. At the same time, you have more freedom and no superior breathing down your neck. Freelance communities usually offer an office space to work, places to hang out, and Friday drinks.

Myth #6. Paperwork = headache

Being a freelance consultant will not complicate your life with a great deal of paperwork. In fact, keeping track of your work is relatively straightforward. You need three things: registration with the Chamber of Commerce, accounting software, and an accountant for annual financial and tax reporting.

You can register with the Chamber of Commerce online. The process takes only a few minutes, followed by a short face-to-face meeting for final validation. For accounting, many intuitive and highly automated systems can help manage transactions. We recommend Moneybird and Jort.

We also strongly recommend using a professional accountant to prepare your financial and tax statements. Fees usually range from €800 to €1,300 per year. The exact amount depends on the complexity of your company and personal finances. This is not cheap. However, the right accountant often has enough fiscal tricks to reduce your tax burden by more than their own fees.

Interested?

Are you thinking about taking the leap? Join our community. Get in touch via joeri@sweav.works or contact us via LinkedIn