Job Hunting

How to Outsource Yourself to Your Former Employer

Longing to join that crowd of free agents, but don't know where you'd turn to find that crucial first client? Take a look around your office. Tip n...
Eileen GunnMay 14, 2004

Jon Lieb was working as the communications manager for The Greenberg Group, a real-estate-consulting firm in Long Island, New York, when a few people in quick succession asked if he was available for some freelance work. It made him think the time could be right to go out on his own.

Working for himself was something he’d always wanted to do, but he wanted one solid, steady client to get him going. So he came up with a plan to outsource his own job. His boss, Steven Greenberg, “listened to my reasoning, that he would get the same level of results from me in a more cost-effective way,” Mr. Lieb recalls.

Mr. Greenberg agreed, and arranged for Mr. Lieb to work in the office once a week and be available by phone as needed on the other days in exchange for a retainer. Now, over a year later, Mr. Lieb has a half-dozen clients as well as Greenberg. The deal he struck isn’t the one he’d negotiate as a seasoned consultant (he charges other clients an hourly rate). But Mr. Lieb says his former boss has given him referrals and sends him to represent the company at events where he can network with other potential clients. Most importantly, he says, the arrangement gave him a low-risk way to strike out on his own.

The number of people who count themselves as self-employed rose in 2003 to 9.3 million from 8.9 million the year before, after declining between 2000 and 2002, according to the Bureau of Labor Statistics. If you’ve been longing to join that crowd of free agents, but don’t know where you’d turn to find that crucial first client, take a cue from Mr. Lieb and look around your office.

“This a great time” to turn your employer into a client, says Terry Lonier, a business coach for the self-employed and the author of “Working Solo” (John Wiley & Sons, 1998). “Everything is up for grabs these days: Companies are open to anything that will save money, improve efficiency or boost the bottom line,” especially outsourcing.

But, you need to have a proposal that will appeal to the boss and a plan for adding other clients to your roster fairly quickly. Here are some tips novices should keep in mind when they seek to turn their former employer into their first client.

Don’t Be Overly Grateful to Your Boss

Even people who made a strong business case for outsourcing their job felt, in retrospect, that they were still thinking about their employer as a safety net more than as a client. They felt “grateful,” “lucky,” even “blessed” that their boss would give them this opportunity. As a result, they focused too much on how they could accommodate him or her in terms of their availability or fee structure. And they didn’t think hard enough about what would be best in the long term for their fledgling business.

For example, when Ruth Furman moved from Chicago to Las Vegas, she arranged to outsource her job as communications manager for a hardware-and-tools company. She ultimately wanted to branch out and take on other clients, but still told the company she’d be as available and productive as she’d always been. “I even offered to work Chicago hours,” which meant getting on the phone at 6:30 a.m. for early-morning staff meetings, she recalls.

“I made myself crazy trying to do this virtual-office thing and work these hours while also trying to meet people and make business connections in a new city,” she says. “Former co-workers told me I was more available as a consultant than I’d been as an employee. I thought that was probably a bad thing.”

It was. When the company went through a shake-up two years later, a new management team cut back the work being farmed out to her. “I had new clients, but not enough to absorb that loss, so I had to scramble to get more clients quickly,” she says. “But it was my own fault. I wanted to prove they weren’t losing anything by not having me in Chicago, and I was way too accommodating.”

Stay Connected with Former Colleagues

One consultant who left a travel-services firm to go out on his own kept a desk at the company for a while, so he could work there one day a week. He quickly learned to use that time to drum up more business. “You run into people in the cafeteria and at the water-cooler and get to talking. I got work from a few other departments that way,” he says.

Ms. Lonier agrees that former colleagues who know you well “can be your biggest cheerleaders,” and can help you get new business. Mr. Lieb has found this to be true: “Of all the clients I’ve had, Steven Greenberg has gone out on a limb the most in terms of referring new business to me and telling people about me.”

Ms. Lonier suggests helping your former colleagues talk you up by coming up with a simple way to describe what you do that they can pass along. “Instead of saying ‘I’m a strategic-marketing consultant for Fortune 500 companies,’” she advises, “say, ‘I help big companies understand small companies so they can do a better job of selling to those small companies.’ “

Laura Ford wishes she’d been more aggressive about asking former colleagues for help when she and a partner left Linguisystems, a small publisher, to start New Avenues, a human-resources-consulting firm in Moline, Ill. “We were renting space from our old company and were doing work for them too,” she explains.

But Remember That They’re Former Colleagues

While Ms. Ford wasn’t using her former co-workers to drum up new business, she was still turning to them as lunch buddies. “We went out to lunch and parties with the old gang. It was easy to do because of the proximity,” she says. “But they still wanted to talk about office gossip, and I had no interest in that anymore.”

Ms. Furman had the opposite experience Ms. Ford did. Her colleagues began treating her as an outsider before she saw herself that way. “It was hard to adjust to suddenly not being included in things,” she says, especially when her day-to-day work hadn’t changed. “There was a time when a bunch of people were invited to a company party, and I was insulted that I wasn’t. But I wasn’t even in Chicago [where the party was], I was home in Las Vegas.”

The answer for both women was to “wean ourselves off the mother ship,” as Ms. Ford puts it. Her firm moved into its own office when it was about a year old. And as its client list grew, she didn’t try to dissuade Linguisystems when it moved some of the human-resources services her firm had been handling back in-house.

As new clients came in, Ms. Furman eventually had to let her former bosses know she’d be less available to them. “I was skittish about doing it, but they were cool about it. They weren’t surprised I was taking on other business.”

Have a Plan to Diversify

As Ms. Furman and Ms. Ford both learned, “it’s in your best interest psychologically and fiscally to get additional clients as soon as possible,” Ms. Lonier says. But keep in mind that if you’re working for your former employer, you probably won’t be allowed to work for its direct competitors.

“You have to know before you get started that you won’t need those competitors to be your clients,” says the travel consultant. “Your work has to be broad enough that you can apply your expertise to different kinds of companies.” For example, he sought out companies that would be interested in his knowledge about airline and hotel pricing, but that were both smaller than his former company and in distinctly different areas of the travel industry.

Ms. Furman had an exclusivity clause in her contract with her former company (Mr. Lieb has one with the Greenberg Group, too). She tried to use it as motivator for goals she knew she should be working toward anyway.

“I wanted to work for different kinds of companies, and for local Las Vegas companies,” she says. Even though she didn’t pursue new and different clients as aggressively as she should have initially, she points out, that diversity is ultimately, “why I wanted to go out on my own.”

Ms. Gunn is a freelance writer in Brooklyn, N.Y.