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Thoughts on Being a Consultant
By Thomas Zoss
Presented to a networking group in Bloomington, Indiana, on March 11, 2005.
Many people think of consulting as a fill-in between jobs, and it can be that but, in some cases, it can continue as a wonderful and unstructured way to earn a good living, be more independent, and have some added control over your life.
Full time or part-time, consulting can be enjoyable work and more than a time filler.
Even if you end up taking employment, consulting is an activity that can be rewarding, both financially and in intangibles such as added variety, stimulating challenges, working with peers, etc.
Rather than finding a job think of consulting as a way of finding work.
Change creates opportunities for consultants. When companies merge, or are closing a plant, or a competitor goes under, or a group is growing or downsizing, whatever initiates the change – someone will need help "right now" with little time to search and hire, train, etc. The marketing part of consulting is to make yourself available to start work immediately, then by offering a bundle of useful skills, a good attitude, and a short learning curve.
A person who wants to be a consultant should be sure to have a personal strategy for proposing, accepting, and performing this type of work. Know what you can offer, how you want to do business, what you are worth, and the type of companies you can help.
Things that helped me to get better and solve problems as a consultant:
1. Consider your time as your inventory. The time you have available for work is your inventory - what you can offer. Don’t fritter away your time, but neither should you expect to sell all of your available work time.
2. Balance work and administration. A consultant is in business, and in addition to your billable consulting time you must also reserve time for administration, marketing, networking, documentation, personal growth, etc. Just choose a good balance between the working part and the “getting ready to work” parts, then figure your compensation by selling the actual time you will be working.
3. Be selective. When you start out, and during lean times, there is an urge to take any work offered even though some projects may not be a good match for your skills and experience. Avoid the “never say no” mode of operation. Decline to accept marginal business and reserve that time for a better match. Avoid projects that may end unsuccessfully.
4. Act hungry. Many consultants act like they are too busy - they blow smoke when asked about their business, often saying they are very busy when they are not. The nature of consulting is that you don't always have multiple projects, or work lined up in sequence. There is nothing wrong with admitting you have time for another interesting client or project. People who don’t think you can handle their business may not ask or refer you.
5. Have a business card and pass them out. The single most important marketing tool is your business card, partly because it reinforces word-of-mouth referrals. You will often meet people who can't imagine you could help them but may still need you later. Your card is a name retention tool, a memory jogger you give them that will help them find you later. Try to have something on the back that may encourage people to keep your card - tips for doing something you know, or the proverbial calendar.
6. Cultivate referrals. The most important asset you may have is your reputation. Referrals by others will help tell your story and are more credible than the same story coming directly from you. Don't be afraid to tell people that you are looking for more business, and what kind you seek. Give them a card. Work will often come to you because others refer you so use the above two ideas to cultivate these referrals. Reciprocate, too, by finding out what others can do and helping to match them with interesting projects that don't match your skill package.
7. Give ideas away. The important part of a consultant’s work is, in my opinion, not the ideas or the plan, but the work product. The application of your experience and skills towards a work plan is what you are selling. Don’t be mysterious or ambiguous about what you would do. Write proposals that tell your interpretation of the situation and how you would help to address them. These details should be part of your written proposal, which should include a price quotation. If people like your ideas but hire someone else to implement your plan they are showing you they can’t be trusted. They may later decide they made a mistake and try to return to you. It's up to you whether you are willing to deal with them at that point.
8. Price by range. I rarely quote a fixed price for a project, and think quoting a price range has a lot of merit. It is hard to predict how projects will go and how clients will cooperate. If you define the situation, propose your approach, and then quote a range you tell the client several things. First, they will know the minimum and maximum you will charge. They know that if they make it hard for you that it will cost them more. If they wanted to spend less than your minimum, they will immediately know their expectations were naive from your viewpoint. If you can bring the project in for less than the maximum you quoted you reward their trust and they will appreciate it.
9. Define the end point and billing points. Your proposal is the start of a negotiation, and details are helpful for everyone. Define the expected results so everyone will know when the project has concluded. It’s amazing how often you think you’re done but, in the absence of a predetermined outcome, the client does not. Also, for lengthy projects, build regular billing points into your proposal. Partial billings at different stages of the project are important benchmarks and helpful to your cash flow and client relationship. You should not have to bankroll the client’s business with unbilled consulting hours.
10. Write long invoices. Your individual contact may know all of the hard work you did but others in the organization may not. Protect yourself and expand your credibility by writing long, detailed invoices. Explain at great length what you did to earn that money so there is no doubt about the value you delivered. Answer the questions before they are asked. Often, the text in your proposal combined with time notations in your day book or journal will supply the words you need for a detailed narrative as part of your invoices.
11. Keep a journal. Instead of papers all over, consider keeping a notebook where you write everything - notes from meetings, outlines of your draft proposals, annotations from phone conversations, phone numbers, etc. Take meeting notes and conversation notes in your daybook then copy those notes into your job files. The original daybook, or journal, or notebook (call it what you wish) can be invaluable because the pieces are not loose, and everything is chronological. If you get a phone message, or something by fax or outside your system, stick it into your notebook.
12. Don’t be afraid to say no. This is similar but slightly different to point number 3 above regarding being selective. You will occasionally encounter people who don’t seem to work by the same rules that you do, or they ask for unreasonable things, or they do business in a way that makes you uncomfortable. Those little voices we all hear occasionally telling us to walk away (the ones we sometimes ignore until it’s too late) should not be ignored. Find an excuse but say no. It's OK to say no, just be nice about it.
13. Beware of loneliness. Consulting is solitary work. You will work among people who sometimes resent your presence, or where you go off and do project work without anyone helping out. You're expensive so they may hustle you out the door when you're done. Acknowledge this issue and have ways to be more interactive. Work at having meetings instead of telephone conferences. Take people to breakfast, or coffee, or lunch. Play golf with people. Network with your peers. Be active in a marketing association, service club, or volunteer organization. I participated in a very rewarding consultants roundtable at one point in my career and it was very helpful. If there isn't one near you, try to start one!
14. Choose successful clients to be more successful. If your business is aimed at helping troubled businesses survive do not be surprised if they have trouble paying you. Try to target clients that are successful - they are more likely to be able to use your ideas to be even more successful, and you will benefit from their success. They pay on time. They recognize good work. They are apt to ask you back for more projects.
15. Remember you have no direct competition. Because you are offering services that are unique to your own training, background, and experiences, you really have no direct competition because no one is exactly like you. True, you may be bidding against another supplier for a project but the differences between you and them will be in approach and plan, not just price. You will lose more business because the client doesn't have the funds to do the project than because of competition, underbidding, etc.
As a consultant you won’t get every project you hear about. Every project will not be completely successful. A few clients may complain about their bills and a rare one won’t pay their bill or will pay late. Even so, consulting can still be more enjoyable and more rewarding than just working a single job.[This handout may need some explanations if you weren't in attendance. For more information, or perhaps to inquire into this or other speeches available to your group, please call Tom Zoss]