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Famine-Proofing Your Consulting Business

By crooky | April 25, 2008

Like all self-employed individuals, consultants have slow seasons and they have busy seasons. For me, it’s the Summer that’s typically slow. The old adage is typically true - consulting is a “feast or famine” business. At the end of 2007, I found myself low on client projects in the sales pipeline and running out of money. My debt was piling up.

Now, I’ve got a full sales pipeline and I’m almost fully booked until early October. I’ve got a bevy of sub-contractors working for me now and I’m going to make at least twice as much this year as I did last year. I’m not trying to brag - I’m trying to illustrate what you can achieve if you persevere.

Sidekicks 4 evar

Over the past five years, I’ve learned a lot of lessons the hard way. Here’s my advice for achieving long-term consulting success:

1. Never Stop Selling

When I started consulting, I didn’t know how to maintain a sales pipeline. I would spend 90% of my time trying to drum up new projects. After filling my schedule with project work, I’d stop selling and spend 95% of my time on doing the work. After the work was done and I invoiced, I’d start looking around for new projects.

That was really, really stupid. What happened was I’d almost run out of money and then I’d start taking jobs that I knew were not going to make me enough money for the work. This cycle put a lot of stress on me and my family over the calendar year and wasn’t doing much to help the bottom line.

If you know anything about business, you’ll know that the sales pipeline is important. For a consultant, with no overhead and no products to commercialize, the sales pipeline is everything. Now, I spend about 30% of my time selling. I’ve stopped responding to RFPs unless they are sent directly to me by someone I already know. I focus on building deep relationships with my existing clients and the people in my network that I want to work with.

I know, it sounds obvious but when you’re new to consulting, you see all these RFPs floating around and it’s really hard not to spend a day throwing together a response in the hopes that you’ll get it. In 2007 - I responded to 30 RFPs. I got one of them. At roughly one day per RFP, I was losing money because the gig I did get wasn’t 30 days worth of work.

2. Keep Networking

Even when you’re busy like I am this time of year, you always need to be out there, talking to folks about what you can do and what you’re doing right now. More importantly, listen to what your network is saying they need and you’ll think of ways to meet those needs.

Marketing yourself to keep the sales pipeline full achieves an ancilliary benefit - you get your brand out there. Whether you’re teaching a class or going to a cocktail reception or volunteering on a non-profit association Board of Directors - you’re building awareness. People will remember you. They’ll remember that you’re a consultant. They might not phone you tomorrow or next month or even next year but if you don’t stay out there in the community, people will forget about you.

3. Keep On Truckin’

It’s really easy to get discouraged and start to look for a salaried job when the going gets tough. I’ve come close to giving up myself several times. Not that long ago, I was going through the recruitment process for a civilian job with the RCMP.

When I started consulting, an older, wiser consultant than I told me “it’s going to take you five years before you’re well known enough in the community to keep the project roster full all the time”. Well, I’m at five years and the roster is full. I’d say there was some truth to that statement.

The real mindjob in this case is am I getting more work because I stuck it out or am I a better consultant because I’ve got five years+ of experience? Probably a little of both.

4. Surround Yourself With Good People

I’m in this neat place now where new consultants are coming to me asking me to tell them a bit about the business. I’m happy to do this because I got a lot of help when I started as well. A man named John Watson (former President of BCIT) was particularly helpful.

I’d like to extend the offer to anyone else out there - if you’re thinking about getting into consulting and want to talk with someone who has been doing it for a few years, drop me a line. I’m more than happy to help.

Thanks to every one of my clients and colleagues who have contributed to the success of my business over the years. I’d particularly like to thank:

- William Koty
- David Roughley
- Geoff Hansen, Reg Nordman, Dave Thomas, Thealzel Lee and Rondi Shouse from Rocket Builders
- Kerry Jothen
- Michelle Petrusevich
- Alan Cornford
- All of my friends at the National Research Council’s Industrial Research Assistance Program

This is starting to read like an Oscar speech. I apologize. I’m a bit emotional this week. Thanks to some of the people I’ve mentioned above, I’m going to have a very, very busy Summer and the best year of my business to date.

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Aaron “Crooky” Cruikshank is the Principal and Founder of Friuch Consulting. He has written professionally about science and technology for ten years.

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Topics: Business of Consulting |

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