Another quick question from reader C, that generated the grist for this post. Thanks, C!

I’m going to a networking event for small business/non-profits, and it has occurred to me that I need a quick elevator speech.

Like “Hi I’m C from … we help people view and analyze their data by using maps”

Most people know that they need a database but most don’t know that you can actually take that data and view it in a different way.

I realize that I need a quick attention grabber – that describes what I do without getting too technical because it is definitely technical.

What do you think?

Here is my reply. Incidentally, C is consulting on the side (always a good way to start), but to protect her confidentiality, I haven’t included full information.  Don’t want to jeopardize the day job.

Hi C,

I agree that an “elevator speech” can help – although I doubt that anyone ever got any business in an elevator

I’d focus it a bit. WHAT you do, WHO you do it for, and HOW it will improve things for the client. Emphasize the results, not the technical details (you can always explain that later.)

What about this?  “Hi, I’m C. My firm helps non-profits better organize, analyze, and use their client/member databases. This helps improve both services and contributions.”

By the way, “contributions” are important — most non-profits constantly struggle with their revenues. You could add “small businesses” to the non-profits, but it sounds like you are targeting non-profits at this time.

If/when asked for more details, then you can explain using mapping technology that was developed for government applications, and how you are now applying it to non-profits and small businesses.

Keep it simple. Maybe a phrase like “You own customized Google Maps…” or some such thing.  I love simple analogies, and often explain my consulting practice as the “Ghost Busters” for electronic systems.

I also agree that you need to be careful of getting too technical. (I say that as an engineer who loves technology,  and who could spend all day and all night talking about it.)

Technology is just a tool to solve problems. Or, as the old saying goes, “Last year, millions of quarter inch drill bits were sold. But not because people wanted quarter inch drill bits, but because people wanted quarter inch holes!”  Focus on the results, and how things will improve.

Finally, you should consider offering a range of services. Initially, you could offer to “do it all”, taking the data, massaging it, and then advising the client on how to best use it. Perhaps even setting up a database if the don’t have one already.

Make it as easy as possible for them to use your expertise. As they become proficient, you could even offer to train someone in their organization on how to use the data themselves.

Some clients just want solutions, while others want to eventually bring the expertise in house, so be prepared to give them both options. Think like an accountant — you can just do the taxes, or you can handle the bookkeeping and other details as well.

Hope this helps,

Daryl

PS to Blog Readers –  If you have a quick question, drop me an email  – which may get answered in a future post (disguised of course.)

PPS - Been a little lax on this end which will probably continue as I take some vacation time.  But stay tuned — more stuff coming!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

As a follow up to an earlier post on LLCs, reader C asked about fees. Here is my response:

Hi Daryl,

Thanks for the advice on LLCs…

Another quick question — how do you go about setting up your fees?

C

Hi C,

Glad my advice helped. Still remember the questions I had many years ago and how others helped me.

Ah, fees. The number two question I hear, after “How do I get clients?”

I plan to do some detailed posts on fees, but here are some quick comments:

- Three popular methods are hourly/daily, project based, or value based. Starting out, you’ll likely use a combination of hourly/daily and project based fees.

- You will need to establish an hourly rate for internal use. It is also helpful when someone just wants a few hours of your time. For longer term projects, you want to move into project based fees.

Most people want to know a project estimate, not your internal billing rate. Think like a remodeler — how much will it cost to redo my bathroom? Not, how much do you charge by the hour?

- Incidentally, value based fees are great if/when you can get them. I think they are better suited for management consultants, where you can charge based on anticipated ROI.

This is a bit harder for technical consultants, which is where you would seem to fit. In those cases, most people want a solution to a specific problem, and want an idea of the overall project cost.

- Back to the hourly rate. You fee should include your salary, overhead, and a profit.

For a very quick estimate, take your existing salary and multiply by 2. Then add a profit of 20% — after all, you are in business and entitled to a profit. These numbers are typical of many businesses today, and should put you in the ballpark.

As such, this is what it would cost a client if they hired you outright (except you get the profit…) These figures can be refined, of course, but are a good place to start.

So, if your salary is $100,000/year, figure $240,000. Divide that by 261 days, and you have a daily rate of  $920/day or $115/hour. This is a MINIMUM — if you work for less than this, you might as well stay employed.

Even if you are part time, you should shoot for this as a minimum, as the market already shows you are worth this to an employer. You can use this rate to estimate project costs.

- Another method is to ask others in your business area. Most consultants will share that info if they don’t see you as a threat. You can also often get that info through professional organiztions.

Once you get a range, shoot for the 1/2 to upper 2/3 point when starting out. You want to be neither too cheap nor too expensive.

Whatever you do, do NOT lower your rates to buy business. A client that buys solely on cost is NOT a good client, and often more trouble than they are worth. (Incidentally, that is a little experience speaking there.)

- If you can charge more, then by all means do so. You do need to charge a premium for short term projects, as your down time and marketing costs are higher.

For example, we do a lot of short term (week or less) projects, so we charge about double what long term consulting or contract engineers charge.

We also charge a premium above that for training projects. Occasionally I’ll get a pushback, but I point out that we “hit the ground running.”

- If you are bidding projects, you need to spell out very specifically what IS covered and what IS NOT covered. You can always do extra work, but only for an extra fee.

Along that line, if someone wants to negotiate, NEVER reduce the fee without reducing the scope. Sometimes people are just fishing around (particularly if you are new,) so hold your ground.

If they do agree to a lower scope, that is fine — maybe they truly don’t have the funds to do everything they wanted to do in the first place.

Anyway, hope this helps. Looks like I have the makings of another blog post here

Best Wishes,

Daryl

Thanks for the response and all the great information. I’ve got a lot to think about and get prepared.

C

My pleasure.  Stick with it – I’m sure you will do well.   — Daryl

P.S. To my blog followers:

–If you have a quick questions, please drop me an email – which may get answered in a future post (disguised of course.) NO CHARGE for brief questions – they make great post fodder! Plus I simply enjoy hearing from my readers.

–If you want in-depth personal help, I’ve decided to add individual “telephone advising” for a nominal fee. See the new Services page.

–As an alternate to the above, I’ll also soon be including a FREE monthly group call-in session. (Watch my blog – still setting that up.)

Copyright © 2013, jumptoconsulting.com. All rights reserved.

Can’t believe we just hit 100 blog posts! Who would have thought there were a hundred things to say about starting and building a small consulting practice?

Well, after two years, there are still plenty of ideas to share and explore. In fact, my original list of possible posts has actually grown.

As soon as the Lead Generation series is done, we’ll begin a series on selling your services — something that seems to scare a lot of people. But is no big deal, as I learned in ten years as a sales engineer working with my technical colleagues.

We’ll also explore fee setting, the number two question I hear after “How do you get your clients, anyway?” We’ll address start up issues too.

Been musing over a few other ideas on where to go with this blog. So check out the new page titled Services.

Some free, some for a nominal fee. Not trying to make a fortune, but any revenues we get will help pay the expenses for running the site, along with adding some new features down the road.

Here is a quick overview:

• If you have a quick question and are not in a hurry for an answer, drop me an e-mail. If time allows, I’ll give you a personal answer. If not, I’ll at least sanitize it and answer in a future post. FREE
• Or, join me for a monthly teleconference. Still working on the details, but watch my blog.  Also FREE. (Borrowed this idea from Pam Slim at Escape From Cubicle Nation. Fellow Arizonan Pam was an inspiration for this blog. )
• Watch the blog for on-line classes. Initially will be done as a series of webinars. Two are already prepared. May add discussion sessions and forums for subsequent offerings. INTERESTED? Please let me know.
• The book. Still a goal, but not sure it is the best use of time for now. The blog and on-line classes might help more people in a shorter time frame. Don’t need it for the ego boost — have already written or co-written several technical books, plus hundreds of articles.  So the book deadline is now TBD.

Caution - if you are receiving my blog  by RSS subscription, please change to an e-mail subscription. Google will be dropping RSS in July 2013, so the future is uncertain. As always, our e-mail lists are PRIVATE, and will not be shared, rented, or sold.

Finally, a big THANK YOU to my readers! Several have commented privately, and I appreciate hearing  from you. A comment or short e-mail always gives me a boost and the incentive to keep going.  If nothing else, it is proof I’m not just babbling to myself.

And now that the house remodeling is finally done, on to the next 100 posts!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

One of my favorite stories, I often share this with wanabee or newbie consultants. It goes like this:

Pat and Mike are out in the woods hunting. They hear a lot of noise in the brush, and suddenly a bear appears fifty yards away.

They decide to run. But after a few yards, Pat stops, drops his backpack, and removes his heavy boots.

Mike says, “Fool, you can’t outrun the bear that way.”

To which Pat replies, “I don’t have to outrun the bear. I just have to outrun YOU.” (With apologies to me Irish friends and ancestors.)

Yes, it is an old story, and a bit corny too. But it does capture the essence of what we do as consultants. You don’t need to know everything about everything — you just need to know enough to help your clients.

Too many people worry about the bear. Rather than jump in, they hold back. They already know enough to be a successful consultant, but they keep spending more time and more money on more seminars, more workshops, more books, more programs, more CDs, more DVDs, or more ???

And there are plenty who feed on those insecurities — particularly in the on-line world.  Ever wonder why they aren’t out there doing it for themselves?

In fairness, there are a few (VERY few as near as I can tell) who have actually done what they promote, and who are willing to share what they know at a reasonable price (sometimes even for free.) Those are the ones you want to follow and learn from!

No, you don’t need to outrun the bear. But you do need to get into the hunt. And best to do so with those who already know how to hunt, and how to outrun the other guy in the first place.

Happy hunting!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

As a consultant, you can’t know everything. Sometimes you need to bring in other experts. When you do, it is much easier if you have greased the skids ahead of time.

Here is a geek story from my college days.

Ernie was an ME (mechanical engineering) student, and a good one at that. However, he was struggling with a mandatory class, EE (electrical engineering) for MEs. It was pretty simple stuff, but he still didn’t get it.

So, he asked my roommate and me, both EEs, to help him out. We all lived in the same place, and that is what we did. Plus we all drank a lot of beer together, a common lubricant for dealing with engineering problems.

“I just can’t seem to get it,” said Ernie. “But Ernie, it’s so simple,” I replied, when I tutored him.  He still struggled, but through rote learning he was able to regurgitate enough to pass. He went on to graduate as an ME.

The following semester, I had a mandatory ME class for EEs on thermodynamics. Like Ernie, I just couldn’t seem to get it.  “But Daryl, it’s so simple,” he said when tutored me. Like Ernie, I was also able to regurgitate enough to pass, and went on to graduate as an EE.

To this day, I still don’t understand thermodynamics, nor do I have a burning desire to do so. But later, I realized the real lesson was in learning to cooperate with colleagues. Without that mutual help, both Ernie and I might not have made it to graduation.

So, help a colleague when needed, and don’t be afraid to ask for help. And establish those helping networks ahead of time.

Finally, don’t over look the benefits of beer, particularly if you are an engineer!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

Here is the synopsis of a recent e-mail exchange from a JTC candidate that you may find of interest.

I’ve edited it and sanitized it (personal information is left out), but I’m sure C will recognize herself.

Hi Daryl,

I came to your website from Mister Money Mustache, and I’ve decided to throw my hat in the circle and JumpToConsulting.

I currently work for XXX and intend to do the consulting on the side.  We are planning to follow the MMM path and retire in 5 years, so I decided I wanted to try and make the stash bigger.

I’ve already picked the company name. I am currently working on the website and need to register my trade name.

I’ve received different advice regarding setting up as a sole practitioner or as an LLC. Can you share some advice?

Finally, would you put LLC on your business cards?

C

Hello C,

Congratulations on your decision to make your own JumpToConsulting! It sounds like it is a good fit with your with your retirement plans too.

By the way, I am a big MMM fan myself. (Hey, he’s another engineer who broke free…)

Here are some comments:

- Recommend the LLC over a sole practitioner. From a marketing perspective, I think it lends more credibility — it shows you are serious. It may also provide some legal protection, but you should talk to an attorney for clarification.

-Recommend using an attorney to do the paperwork. Yes, you can do it yourself, but to me it is worth a few hundred bucks to know it has been done right.

- Ask around to find an attorney who specializes in small businesses. I prefer small firms (one or two lawyers) as they generally cost less and are more personal. Plus, I just like dealing with small practices. I also do the same thing with accounting, and have used a two person CPA firm for many years.

- However, if you are just testing the waters, the sole practitioner may be OK for now. We did that for nine years as part time consultants, but incorporated as a Subchapter S corp when we we went full time in 1987. (LLCs were not popular then, so the Sub S made the most sense.) If you change later, however, you may need to update printed materials (letterhead, cards, brochures, etc.) to reflect the LLC status.

- Regarding LLC on your business cards, my understanding is that if you are an LLC (or any other type of corp) you should put that on your business cards. Check with your attorney, but I believe that gives notice to your clients that you are incorporated. I’d do it anyway as it enhances your marketing image.

- Really like your company name! Yes, you want to register it. You may want to trademark it too. We trademarked EMIGURU which is our website and which we use in our advertising. Glad we did, as it gave us leverage when a cyber-squatter picked up the .net and .org extensions and then used them in a competitive way. Because of the trademark, we were able to stop that. However, it cost us about $2K to resolve the issue.

- So, when you register your domain, pick up the .net and .org extensions, in addition to .com. You might want to pick up others, too, but those are the most common.

- It sounds like you have identified your initial market place - needs, geography, type of business, etc. This is good, as it lets you focus your marketing efforts. But be ready to make changes as you move into those markets as you learn more.

– The markets will guide you. Try not to spread yourself too thin, though, or go in too many directions. “Do a little, do it well — you’ve done a lot.”

-One more piece of advice. Since you will be consulting part time, be particularly careful to avoid conflicts of interest. You don’t want to jeopardize your day job. And keep a low profile — petty jealousies can arise (the voice of experience speaking.)

Finally, I applaud your decisions, both the MMM-path and the JTC-path. I’ve followed both paths for many years, and they have paid off for me.

Thanks for reading my blog, and best wishes in your new adventures!

-Daryl

Have your own quick question? Drop me an email (just use the Contact form)  and perhaps you’ll be featured in a blog post too.

Copyright © 2013, jumptoconsulting.com. All rights reserved.

This is a true story. Not even the names have been changed…

Daryl’s wife (Mary) was at the beauty shop, getting her hair done. She couldn’t help hearing the conversation in the next chair. The discussion centered around the new boy friend of the customer’s niece. Here is a summary of the exchanges:

Hairdresser - “So, it sounds pretty serious with your niece and her young man at the university.”

Customer - “Yes, he seems really nice. The only problem is that he is studying engineering. You know, engineers can be kind of strange…”

Mary - (Interrupting) – “Tell me about it, I’m married to one!”

Customer - (Embarrassed) – “Oh, I didn’t mean…”

Mary - “Don’t worry, it’s true – they are different.” But then she added, “Its OK, though. We’ve been married over 40 years…”

I guess we engineers do have a reputation to uphold. Without us, there would be no Dilbert, right?

Reprinted from Kimmel Gerke Bullets, our client newsletter.

Copyright © 2013, jumptoconsulting.com. All rights reserved.

With apologies to David Letterman…

10 – MONEY - Can lead to Financial Independence. It ultimately did for me.

9 – PLACE - Choose your own work location. Worked out of my home for the past 30+ years, and must say I really enjoy the commute. The view from the patio is nice too.

8 – TIME - Set your own schedule. Never did like the idea of 8 to 5. Or worse, never liked the idea of unpaid overtime. Much better to be PAID for working on a panic project.

7 – SECURITY - Can’t be fired. Took two layoffs to figure this out. Real security is having multiple “bosses” — no single client can put you out of business.

6 – SATISFACTION - Do some good, have some fun, make some money. ‘Nuff said.

5 - INDEPENDENCE - Call your own shots. Stop cleaning up messes made by others. As a minimum, you at least have the fun of making the messes in the first place.

4 – LEADERSHIP - Be a leader, not a follower. Be the captain of your own ship, even if it is just a rowboat.  Besides, little rowboats can often go where the big boys can’t.

3 – LEGACY – Make the world a better place. Leave the world better than you found it. Like teaching, your counsel and advice may well outlive you.

2 – LIFESTYLE - No need to conform. Work when you want, where you want, and as much or as little as you want. You can even wear goofy hats!

1 – FREEDOM - That is what really drives Uncle Daryl. Rule your world! Do it YOUR way!

Upon reflection, these top ten rules apply to almost ANY small business!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

Consulting isn’t just about expertise — it is also about relationships. What better way to build those relationships than through networking?

Networking isn’t just for consultants. It is something you should do regardless of your career. As the old saying goes, “It’s not what you know, but who you know.” True for finding new jobs… and for finding new clients.

Networking can seem painful. Many consultants are introverts — we’re thinkers and planners. We like to deal with problems and ideas, not necessarily with people. Leave that for the sales and marketing types, right?

But if you are a solo practitioner, it is up to you (and you alone) to get the business. You first need to GET the projects before you can DO the projects. That means YOU are the now sales and marketing department.

As an aside, I often advise my engineering colleagues (among the most introverted and distrustful of sales and marketing) to treat getting the business as just another challenging problem to be solved. Looking at it that way, it can even be fun. It is for me.

So how do you network? Strategically. Go where your potential clients are. Think about the niches you serve. This is not about “speed dating” or collecting business cards. Rather, you need to focus — use a rifle, not a shotgun.

And don’t overlook recommenders — others serving your markets. These include professionals (attorneys, lawyers, bankers), media (magazine editors and newspaper reporters), and yes, sales people (reps, distributors, etc.)  Some of my best business leads over the years have come from these sources.

Here are some ways to network strategically:

–Professional organizations… If you are a professional and not already a member — join today!  Participate — don’t just attend meetings. If you business is local, get involved at the local chapter level. If you business is national, get involved at the national level.  If both, well, get involved at both levels.

Volunteer to speak. Short talks and tutorial sessions provide great exposure, and help your colleagues at the same time. Special committees are good too.  We’ve done both, and it has paid off well. Plus, we’ve made a lot of good friends along the way.

One caveat — pick and choose you efforts with care, as volunteer organizations can suck up time like crazy. Don’t spread yourself too thin — you still need to make a living.

–Symposiums… Many professional organizations have annual trade shows. You should attend these too. These are an excellent opportunity to meet the movers and shakers in your industry, which include influencers like journalists and marketers.

Skip the academic sessions, and head for the tutorials. Better yet – volunteer to present – this puts you in front of potential clients. And spend time on the show floor talking to the sales/marketing folks. You’ll learn about new products/services, and often new opportunities as well.

–Trade & Civic organizations… Think about places your clients and potential clients hang out to network. Then plug into those networks, at least on an occasional basis.

For example, if you are an accountant serving a local business market, consider joining local Rotary or Lions clubs. If you are an accountant serving a special niche such as HOAs (home owners associations), consider joining the local or national HOA group. (Yes, such groups exist.)

–Social media... Thanks to the Internet, social media offers many opportunities to expand your networks at very low cost. One caveat — do not rely solely on social media — the personal touch is still crucial.

The big four today are LinkedIn, FaceBook, Twitter, and Google+.  My experience suggests that LinkedIn is preferred for B2B, while FaceBook shines with B2C. Done right, Twitter can be effective for both. Just joined Google+ so I have no opinions on it yet.

The key is to be where your potential clients are at. Once again — watch your time. If you are not careful, these can be addictive and can become tremendous time sucks.

Finally, don’t expect immediate results – networking is for the long term and will eventually pay off.  As a plaque in my office says, “In the pond when you least expect it, a fish will appear.” But you need to have your line in the water…

People buy from those they know, like, and trust. Networking works!

Copyright © 2013, jumptoconsulting.com. All rights reserved.

In celebration of Engineer’s Week, February 17-23, 2013…

You could not…

Drive to work… cook a pot roast… bake bread… take a shower… watch television… make toast… brew coffee… mow the lawn… call your mother… be cool in the summer… wash you clothes… play computer games… listen to your stereo… ride your bike… videotape a wedding… vacuum the rug… recycle you garbage… play baseball at night… be warm in the winter… fly to Hawaii… flush the toilet… or use the cash machine…

Without an Engineer! (From a sign in Daryl’s office.)

Have You Hugged Your Engineer Today? (From another sign in Daryl’s office)

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