consultants

How to stay out of POVERTY GULCH

“I’m so busy on my big lucrative project that I have no time to market!” Then the project comes to an end. Now you have plenty of time to market. But you’ve been out of the flow so long that it takes awhile to fill your pipeline. You’re in Poverty Gulch.

boom and bust cycleYou have just gone from having a big project, where you are very busy, but fat and happy, to having no work at all. Since you were so busy–and making so much money–you did no marketing. When the project ends, your workload falls way off. You have to hustle for work until you get another big project. Then you once again forget about marketing.

This is a very common occurrence for entrepreneurs. It’s called the “boom and bust” cycle. What can you do about this? How can you keep a level of business development going even when you are focused on a large project, so that when it ends, it doesn’t take you so long to get back up to speed?

It is a matter of attitude and setting boundaries with your client. Are you the head of a business? If so, you must allocate time for all aspects of running your business, including marketing.

The biggest barrier to this is not the demands of your client. It’s your own preference to just keep working rather than face the uncertainty of drumming up more business. Admit that to yourself.

no povertyMany entrepreneurs much prefer doing client work than marketing for new work. For them, having one big lucrative client is the ideal–especially if the money is good. It’s a risky strategy, though.

Two options:

1. Set a limit: No single client absorb be more than 15%, or 30%, or 50%, of your work time. Choose your own number.

2. Make clear to your big client what your maximum weekly or monthly billable hours for them will be. Then stick to it. You don’t want to be their contract employee.

 

 

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Q: What are the top 3 things solo practitioners can do to out-compete the big brand consulting firms when vying for a project? Asked on Linked In by Roberta Guise

My answer:

The top 3 benefits to clients of working with smaller consultancies:
#1. You get to work directly with a principal of the firm, not with some green MBA sent out by the partners.
#2. Nimbleness and flexibility.
#3. The billing rate includes less markup to cover the cost of big offices and admin staff.

On the other hand, there are some (perceived) drawbacks:
#1. You’re stuck with one kind of expertise, and they try to make all your problems fit into what they know.
#2. If they’re busy, you wait. Your project may be subject to unexpected delays if multiple clients of theirs all have urgent requests.
#3. “What if the principal is hit by a bus?” You fear there’s nobody to step in to complete your project.

As the small consultant, how do you address these concerns with clients before they mention them? Here’s how I handle them:

1. Ally yourself with a few other complementary and trusted consultants, and don’t be afraid to refer business to them. You could also bring them into a project on a sub-contractor basis. These referrals have to flow both ways.

2. Under-promise, over-deliver. This is our time-management bugaboo. Don’t schedule all your hours; leave some time for urgent things that come up. The flip side of this concern is that we often handle urgent client requests during “overtime”—evenings and weekends.

3. Addressing this one requires having one or more strategic partners who can fill in for us, when we get sick, have an emergency, or just want to take a well-deserved vacation.

“Small” needn’t mean “solo.” The best consultancies I’ve had relied on two to four consultants who had partially overlapping areas of expertise. We were complementary. One client may use more than one of us. And we did have the capability to partially fill in for each other during absences.

Finding the right mix of people is not easy, but that’s a subject for another blog post.

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