Being paid a salary feels safe. Being paid by clients feels a little risky. That’s the starting assumption for most people. But when you look at how the two models actually work, and how the return develops, the comparison becomes more interesting.

About 20 years of life in one sentence

Here’s the basic salary model we’ve all followed to get ahead. Get experience. Make a big play that gets noticed. Get promoted. Pump up the hours and keep climbing until you find a glass ceiling, hit a restructure or get noticed by a bigger fish and jump ship. That’s about 20 years of life in a single sentence. Each step up can bring more responsibility and a better salary. But there are only so many steps available, and your next move normally depends on another promotion or another organisation deciding you’re worth more. You can keep climbing, but it’s unlikely you can simply decide to double your salary.

The client model works differently

The client model starts with a conversation with a business owner. Ask them what their ideal business looks like. Compare that with how things are going now. Find out what’s getting in the way and then work out how to fix it. Nine times out of ten, the business is underpriced, overstaffed or under-promoted. These are often fairly straightforward problems for an experienced businessperson to recognise, but the owner may have been stuck with them for years. For about a third of what their lowest-paid employee costs them, they’ll pay you to advise them on how to fix those problems. Do useful work and they refer you to their mates. One client becomes several, and that’s how an advisory business grows. That leads to the biggest difference between the two models. You can double your client numbers. It’s considerably harder to double your salary. That’s the risk-and-return payoff.

If you’re business-minded, like your independence and have a degree of risk aversion…

the obvious low-risk choices are to stay where you are or move into contracting, where at least you understand what you’re getting. The trade-off is that a familiar level of risk will probably give you a familiar level of return. There is another option that is also fairly low risk. Do a bit of digging and find out what it’s like to be paid by clients. You don’t have to resign, start a business or make any decisions at all. You’re simply finding out how the model works. Then, if something changes, you’ve got a bomb-drill plan ready to roll out.