Purely from a software/technology perspective, I’m going to have to dispute this. My thoughts may not apply in other lines of consulting.

A specialist in certain products, frameworks and suites, regardless of industry, can earn 2-2.5x my best NYC rate as a technology generalist. Technology generalists who specialize in a specific industry, however, tend to develop into fulltime system and/or enterprise architects at one or more companies in that industry, and frankly, yes, some of them make a good amount of money, but 99.5% of them still make less than I make as a technology generalist.

Sure, there are exceptions. There are certainly cases where there are people specializing in an industry and remaining consultants, and making a lot of money — financial software is, or used to be, one of those.

However, as a generalized technology consultant with some focus on software and systems integration, I definitely would not advise specializing in an industry, and once you get beyond a certain level, neither would I recommend specializing in a specific technology or stack, unless it’s one of the small handful that sits outside the bell curve on compensation. And it should be noted, those diamonds in the rough simply are not equally accessible to all persons in all places. You probably don’t make big money in financial services software while living in North Dakota, at least not without a prior history in the field at big name firms.

I should note: when a technology consultant specializes in a specific industry, they’re going to tend to do business with fewer clients overall. Clients who repeatedly use a technology consultant for domain-specific knowledge are bound to try to convert them to a fulltime resource. I’ve seen it happen many times. For some people, that’s a goal, but that’s not the topic of this particular post.

Andrew,
I have no experience as a technology generalist though I’m glad that you’ve shared your experience on this for those that are in that area. Appreciated.

This is interesting to note…I suppose there will always be exceptions, let’s take a minute to look at the big names in an industry…

-Copywriting for financial publications – Clayton Makepace
-Copywriting for B2B – Steve Slaunwhite and Bob Bly
-PPC Advertising – Perry Marshall
-Corporate sales development – Chet Holmes
-Marketing on a budget (Guerilla Marketing) – Jay Conrad Levinson
-Positioning and Branding – Al Ries and Jack Trout
-Management – Jack Welch
-Sales Training – Jeffrey Gitomer
And the list goes on and on….

The point I’m making is that if you want to really be known, to stand out from the crowd, find bigger and bigger opportunities, you need to make a name for yourself. And the best way to do this is to specialize. In fact, that’s the reason why each of the above examples and many others have reached top of mind awareness in their industries.

If you get hired to help a business write a business plan, it doesn’t mean that’s all you have to help them with. You can assist with their marketing, finding employees, and whatever else you have the ability to do. But it’s much more difficult to be known and considered an expert when it’s hard for people to quickly and easily say what it is you do.

If you have more examples from these or other industries to support this or prove me wrong do share.

Hi Michael,

Not saying you’re wrong. I think it may be somewhat easier to become recognized as a high-value expert than you allude to however. There are all kinds of local/regional groups and conferences that consultants in all industries can present at, or even run. Blogs and whitepapers if they’re relevant to your industry and clientele. Non-industry specific groups and other opportunities through which one can communicate their expertise, thus building their personal brand.

That said, there are experts, and then there are superstars. How many “million dollar consultants” do you know though? Those people are outside the bell curve. Sure, everyone should probably be aiming for the fences, but realistically, it’s a lot easier to hit the “statewide/regional expert making $125-$200/hour” level than it is to hit the “national/international guru averaging $50,000/month revenue” level.

A consultant charging $200/hr and filling their schedule at that rate is doing well for themselves.

This post is more focused on helping people to get to that point. The hourly rate in and of itself isn’t the key, it’s getting booked solid at a healthy hourly rate that is.

(Though there are many options other than hourly for setting your fees, see http://www.consulting-business.com/consultant-fees.html)

The best way to charge a high hourly rate and get booked solid is to position your offerings to specialize in one area. So you become known as an expert.

I’ve seen many more successful specialists than generalists. Look at the most successful restaurants, websites, professionals – most (always some exceptions) have become famous by positioning themselves as experts in one area – only once they’ve succeeded there have they gone on to broaden their offerings (which can be considered the backend of sales by many).

Back to consultants though, for those making $4-5K a week, we’ll look at how to build that out into a million dollar business in another post.

*Andrew – Have been enjoying this discussion. Happy that you’re bringing a different perspective – it’s great to explore.

Likewise Michael. (Too bad this commenting system doesn’t email-notify respondents.)

We’ll work on that! Thanks Andrew.