General Consulting
Take care of your vendors…
Vendors and suppliers are part of your business team. Take care of them, and they will take care of you.
Too often businesses go for the lowest cost, delay payments, and generally abuse their vendors. And then they complain when they get in a pickle, and nobody wants to help them out. I’ve seen it, and I’ve been on the receiving end as a vendor myself.
Better to treat vendors with respect. This includes paying your invoices in a timely fashion — your vendors are not your personal bank. Here are some quick examples:
Printing company – A significant part of our consulting business was training, which we promoted by direct mail. We often printed 50,000+ mailing pieces each year. We also printed brochures and other sales collateral. We even self published two books.
All of these were projects done by the same printer for over 25 years, until I stopped doing public classes after my business partner died. We often had offers from other printers to do the job cheaper, but always declined. And we always paid their invoices right away.
Why? Because our printer was a valued part or our business team. More than once they bailed us out of a crisis. We knew we could depend on them, and they knew they could depend on us. Over the years, we even became good friends with the owners. It was a pleasure doing business together. (They are now successfully retired.)
Training company – Contrast the above with a company for whom we did contract training years ago. Invoices were often delayed for months, even though they had been paid in advance. It got so bad, we put them on payment in advance (a C-client.)
They eventually went bankrupt, stiffing many other contract instructors along with several hotels. Needless to say, they did not recover. Nobody wanted to work with them again. The sad part is their materials were good, and they could have owned their training niche forever.
As an aside, I’ve done contract training for another firm for the last several years. They pay promptly and are a sincere pleasure to work with (an A-client.) They are successful, and pretty much own their training niche.
Two training companies — two vendor philosophies. One long gone years go — one still successful after many years.
Test laboratory – Not a client, but a colleague who started his business a few years after we did. He slowly grew his company, always taking care of his customers, employees, and vendors. As a result, he had a sterling reputation with reciprocated loyalty.
Although he started on a shoestring, he recently sold his company for many millions of dollars. Many times I’ve cited him as an example of how to build and run a business, and could not be more pleased with his success.
It is really pretty simple… just follow the Golden Rule! What goes around comes around.
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© 2018, https:. All rights reserved.
Which customer niche…B2B, B2C, or B2G?
When considering WHAT to consult about, you should also consider WHO you will serve. There are three general niches to consider:
- B2B – Business to business
- B2C – Business to consumer
- B2G – Business to government
Each niche calls for different business approaches. When starting out, it is best to focus on one of the three. You can always expand into the other niches later.
B2B – The realm of many technical specialists like engineers, and where I spent my consulting career. Our clients ranged from Fortune 100 companies to small firms. Most were designing and manufacturing technical products, and were experiencing EMI (electromagnetic interference) problems.
Problems ranged from product test failures to production line failures. A common denominator was pain, always a good motivator for calling in a consultant. Much like being a doctor or dentist 🙂
Marketing was outbound — writing magazine articles, speaking at conferences, networking through professional organizations. Credibility and visibility were key. The reach ranged from local to world-wide.
Sales were inbound — clients usually called requesting help. (No cold calls or knocking on doors to convince clients of a need.) Referrals were golden.
Purchasing was via purchase orders or contracts. Since our consultations were typically a week or less, we used simple quotations or engagement letters. Simple contracts were used for longer projects.
Payment came from company funds, and may not have been officially budgeted. But when the “cost of failure” was significant, money appeared.
Our clients were typically Project Manager, Directors, or Engineering VPs, with appropriate purchasing authority. We rarely dealt directly with purchasing agents, or with the “C-Suite” so prized by management consulting firms.
B2C – The realm of many business specialists (accountants, lawyers, financial planners…) or personal specialists (coaches, counselors, personal trainers…) Clients are often individuals or small businesses.
Most clients are seeking brief help or experience they do not have themselves. It may be driven by pain, seeking improvements, or even fun (such as wedding planners.)
Marketing is often local — networking/speaking with civic groups, or writing local magazine/newspaper columns are effective. But thanks to the Internet, the reach is often expanded through blogs, Facebook, and on-line communities. Either way, high touch personal involvement is key.
Sales and purchasing are often simple (checks, credit cards, or PayPal.) Payment comes from personal funds, which often means smaller fees than B2B.
B2G – The realm of many larger consulting firms. Those working with the federal government are often referred to as “Beltway Bandits.” Nevertheless, there are opportunities for individual consultants if one understands and is willing to work with the bureaucracy.
After working many years in the defense industry, we elected not to pursue this niche. In our early days, however, we did pursue a state grant (which we won) and several federal SBIR (Small Business Innovative Research) contracts (which we did not win.) I’ve known several consultants who built their practices around grants and SBIRs.
Marketing is highly dependent on networking. As such, it can work well for those leaving a government career (military or political) where one can leverage contacts and experience.
There are also publications (such as Commerce Business Daily) that list projects and RFPs (Requests for Proposal.) A word of caution – many are “wired” for preferred vendors. Not complaining — it is just the way it is.
Sales consists of submitting RFPs. In order to maintain fairness, there are strict rules and deadline for RFPs. If you are new to the game, you may want to partner with an experienced vendor or contractor. Often times, small special efforts are sub-contracted.
Typical payment is via contract, which may be subject to audit. As such, you may need an accountant to assure compliance with government accounting rules.
Typical B2G clients are government agencies or branches of the military services. Your point of contact will be a program manager, unless you are working on a subcontract.
The choice of your business niche is personal – there is no right or wrong. While we were successful in the B2B niche, I know successful consultants in the B2C and B2G niches. Just choose carefully and wisely.
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© 2018, https:. All rights reserved.
How to handle “Let me think it over…”
Here is a blunt but polite way to handle this common objection to moving ahead with a consulting project, from my friends at the Rain Group.
It is called “Get a Reality Check.”
“Most of the time I when hear, ‘Let me think about it,’ what people really mean is ‘No thanks.’ Can you tell me is that what’s happening here today?”
Many salespeople are afraid to pose this question because they believe they are somehow “planting a negative thought” in the prospect’s mind. David Sandler, the founder of Sandler Training, used to say, “You can’t lose what you don’t have.” If you need a reality check, ask for one.
Ironically, posing this question usually gives you the information you need to rescue the sale. You’ll learn if there is a chance of working together. If there is not, it is better to know now before you waste any more time.
This is but one of eight recommended responses. For all eight, visit here.
Your time is too important to chase non-opportunities. Furthermore, you need to know when to move on to better ones. It was our policy to make not more than three follow up phone calls. By being polite, we often got callbacks later.
But even if not, our time was better spent on paying projects.
Finally, don’t fear rejection. It is a fact of life selling anything. But you do need to know when to hold ’em and when to fold ’em. Asking the question above helps you decide.
P.S. Many years ago I enrolled in the Rain Group’s on-line class on selling professional services. Even as an experienced sales engineer I found it very useful in my consulting business. Or just read their book.
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© 2018, https:. All rights reserved.
On joining the “Laid Off Twice” club…
Here is a reply to a post by Cubert at Abandoned Cubicle regarding layoffs… which somehow seems appropriate for Labor Day…
Best damn thing that happened to me – twice. The first time got me thinking about starting my own business — the second time (a dozen years are) cinched it.
Thirty+ years of running my own consulting engineering firm was great – much better than another thirty+ years of cubicle life!
The first layoff came two years out of college, with a very pregnant wife. Fortunately, soon found another job, but the experience profoundly affected me. I became a frugal Mr. Money Mustache (a fellow blogging engineer) of the 1970s.
I also started planning my escape – whatever it was going to be. Dropped the MSEE studies. Got practical — took a class on TV repair (not practical today), followed by getting a Master Electrician’s license (a bit more practical.) The goal — be able to put food on the table for a now growing family.
Stepped in up a bit when a friend (who became my business partner) and I started moonlighting. Got my PE (Professional Engineer) license, something I had blown off in school. Spent time learning and doing, not wasting time on TV or sports events.
Even made a career change to Sales Engineering to hone my business skills.
The second layoff came twelve years later with a startup. After providing much needed help with sales and marketing, got laid off (OK – fired) after 18 months when the founder’s buddy joined the company. (The buddy that did not have the cojones to do so at the start. )
Oh well — it was a “learning experience.” That means it cost me, was painful at the time, but in retrospect worth it for the experience gained. Plus it vastly improved my BS detector.
So I hung out my consulting shingle. Bad way to start a business — I lasted about three months before climbing back into the corporate womb. Was not FI (Financially Independent) and could not generate income fast enough. But even more determined to have my own consulting business.
Socked money away, and started creating credibility and visibility via writing and teaching. When it became apparent layoff number three might be on the horizon, I made my JumpToConsulting.
That was in October 1987 — the day the stock market crashed. But once again I survived, and was now OI (Occupationally Independent.) Thanks to hard work, frugal living, a very supportive spouse, and a bit of luck I achieved full FI status a few year later.
The last 30 years have been a blast. I’ve traveled the world solving problems and teaching classes in my engineering speciality. In 2010 I started a blog (JumpToConsulting) to help guide others who might be so inclined to pursue this path to independence.
In 2015, my business partner and good friend of 40 years passed away, and I decided to wind the consulting practice down. I still do about 6-8 projects a year, mainly training which I love to do.
Now semi-retired, I split my time between MN (where there are grandkids) and AZ (where there is no snow.). With LI (Location Independence), I achieved the “hat trick” of FI/OI/LI.
Those are MY layoff stories. Last fall, Cubert and I met for coffee in MN. I encouraged him (and encourage all of you) to make your dreams real. Frugal living and focused hard work pay off.
Independence rocks — Uncle Daryl
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© 2018 – 2019, https:. All rights reserved.
Consulting Fee Study – 2018…
Here is a link to a recent consulting fee study from Consulting Success.
Over 33,000 consultants were polled, including Yours Truly. Not sure how many responses, but with that size database the results are statistically significant.
Here are some a key findings:
- 44% of the consultants with less than 4 years experience earn over six figures. Yes, even if you are just starting out, the potential is there.
- 72.5% of consultants bill based on time. Very popular with technical consultants, but I recommend charging by the project rather than by the hour.
- For 56.7% of consultants, their average consulting project is $10,000 or less. Many well executed smaller projects still add up to big $$$. They did for us.
Unfortunately, the study does not share specific rates. But primarily serving management consultants, Consulting Success emphasizes ROI (return on investment) based fees.
For example, if you can show a predicted ROI of $100,000, one should be able to sell a fee of $10-20,000 — regardless of time spent.
In my opinion, ROI is not as useful for technical consultants where clients are looking for concrete solutions to specific problems. Nevertheless, the data is still useful.
Special thanks to Consulting Success for sharing their results.
You may be interested in these past posts:
- Mangement vs Technical Consulting… (2011)
- Questions on Fees… (2013)
- Some Comments on Fees… (2015)
- Don’t Cut Your Fees… Cut the Scope… (2016)
- Consulting Fee Study – 2107… (2017)
© 2018, https:. All rights reserved.
Prioritize you clients…A/B/C…
In a recent discussion with a young consultant, he expressed concerns about handling his ever growing list of clients. (He is obviously doing a good job…)
Having been at this game a bit longer, I suggested the ABC method for prioritizing clients. We used if for years, and it goes like this:
- All new clients start out as A-clients.
- If they pay promptly and are pleasant to work with, they stay as A-clients.
- If they delay payments and/or are a bit difficult, they become B-clients.
- If they are really slow paying and/or are very difficult, they become C-clients.
When the phone rings, you take care of the A-clients first, and the B-clients next. You try to cull the C-clients, unless you are desperate. In that case, you charge top dollar and get payment in advance.
I then shared the Pareto Principle (80/20 Rule) which posits that 80% of your business comes from 20% of your clients (A-clients), while 80% of your problems come from a different 20% of your clients (C-clients.). The numbers may not be 100% accurate, but the principle still holds.
A common mistake is to focus on the C-clients, who suck up too much time with too little renumeration. This is an easy trap to fall into. After all, we consultants are driven to solve problems. But at the end of the day, the consultations must be profitable and should be fun.
If you are feeling really Machivellian, you could refer your C-clients to competitors. Just make sure the competitors are not friends 🙂
Seriously, I do not advocate this – better not to sully your reputation among your colleagues.
If really bad clients, you can always fire them. This should only be done as a last resort, but if it needs to be done, then do so. Life is too short to deal with bullies or deadbeats.
Had only a couple of “firings” in my 30+ years of consulting — most of my clients have been a sincere pleasure to work with.
P.S. You are invited to my first free monthly teleconference. Can’t make it? Please join us next month.
© 2018, https:. All rights reserved.
My top 5 mistakes as a consultant…
Making mistakes are part of starting and growing any business (including consulting firms.) In fact, if you’re not making some mistakes, you’re probably not trying hard enough — nor are you learning.
Here are five mistakes I’ve made:
(1) Not sticking to the knitting – Back in the late 1990s, we got caught up in the dot-com frenzy. When a colleague approached us about collaborating on a web portal, we jumped right in. After all, we didn’t want to miss the boom.
If didn’t take too long before the boom went thud. But not until we had spent thousands of dollars for a software developer, and hundreds of hours trying to sell ads to pay for it. We even took out a booth at a trade show, secretly hoping Microsoft might buy us out.
It became obvious this business did not fit with our consulting practice. We had no leverage. It really belonged with a magazine where they could add it to their advertising options.
So we sold it. Remember the trade show booth? One publisher had expressed interest, so we approached them about partnering. They countered with an offer to buy us out. Done deal, and everybody was happy. We even escaped with the shirts on our backs.
Lesson learned — stick with what you do best, and make sure anything new fits with your existing business.
(2) Not paying attention to receivables – When we started, we provided contract instruction for a training company (no longer in business.) They were a major client, and kept us pretty busy.
Everything went fine for a couple years. Then they started to slip in paying their invoices. Pretty soon they owed us a about $25K, which included both time (soft cash) and expenses (hard out of pocked cash.) About that time, we discovered they owed all of their contract instructors similar amounts.
After a brief panic, we got mildly aggressive about getting paid. We liked the work, and didn’t want to antagonize them, but we still needed to get paid. It took a year or more with continued pressure to get their account current.
Not long after that, the training company filed for bankruptcy, effectively stiffing many other instructors. As much we liked working with them, we no longer extended credit — all jobs were “payment in advance.” It soured the relationship, but it saved our bank account.
Lesson learned — watch your receivables, and enforce payment. You are not a bank.
(3) Not getting a deposit – This one blindsided us, and cost about $10K in lost time and travel expenses. It was a small company, and they were in a panic. So we dropped everything to fight their fire.
Unfortunately, before getting paid they went bankrupt. Our invoice fell within a 90 day window, which meant the payment was denied by the courts. Had we been paid, it would have been “clawed back.” All completely legal.
The bankruptcy itself was a sham. The small company was owned by an equity firm (affiliated with a certain past presidential candidate from Utah.)
They put several firms in bankruptcy after shifting assets. It stunk to high heaven, but there was nothing we could do. We eventually got ten cents on the dollar, which paid our lawyer.
Losing the travel expenses was really annoying. Not only did they steal our time, they stole our money.
Our lawyer suggested getting a travel advance from everyone, or even the full fee in advance. Apparently if you don’t extend credit, the advance payments can’t be “clawed back.” (Check with your own attorney on this.)
Incidentally, this has not been a major problem. In 30 years, we only lost money twice, and had one close call as discussed in Lesson #2. But I still get an advance deposit prior to travel (typically $2500.)
Lesson learned – get a deposit prior to travel. If worried, get progress payments or full payment in advance.
(4) Not controlling our own training programs – After a few years of consulting, we decided to offer our own training programs, based on solving the problems we were seeing. Clients began asking for this to avoid future problems, and we decided to add classes to our services. It took several attempts to get this right.
We started by collaborating with a test lab with moderate results. Their emphasis was on testing and regulations, while our was on design. So we split the time for our first class.
The initial feedback showed much higher interest in how to prevent and fix problems, while the testing interest was more esoteric. It was bit touchy, but we decided to go on our own. We did, however, remain good friends with the test lab and collaborated on other projects.
Later, we approached a test equipment vendor about adding us to their seminar program. Working with their field sales personnel, we presented two multi-day seminars which were well received.
We promoted via highly targeted direct mail, and that worked well. We then wrote a white paper with recommendations on how to proceed.
Unfortunately, their marketing department had their own ideas. They spent a ton of money on a fancy promotion with almost zero results. No second chance – they had blown the budget.
So after licking our wounds, we offered to run the program. We would pay for the direct mail promotions, prepare and print the materials, and present the classes. They would provide meeting space and local support, but at no cost to them.
If finally worked. We trained over 10,000 students with that project, netting us $12-15 million. Not too bad for a couple of goofy consulting engineers just having fun.
Lessons learned – take control when needed (and don’t give up.)
(5) Not appreciating barriers to entry – Already addressed this in a previous post, but it bears repeating.
This little adventure took place during out “part-time” consulting phase. It took place in 1981, in the early days of the personal computers. We were still very green about consulting, but willing to experiment and learn.
We developed a three hour seminar on using personal computers for business for a local vocational school. The initials offerings were highly successful, so with the schools permission we decided to do a full day version which we promoted at ran our expense.
But instead of the 80 people like our last class, 3 showed up. What happened ??? Unknown to us, a new computer store decided to promote their business with FREE seminars. How do you compete with free? You don’t.
Thus ended our computer seminar adventure. We learned about barriers to entry. As I groused to my business partner over beer, “We’re engineers. Never again will I go into a business where some kid in a computer store can eat my lunch.”
Our later training programs took an engineer with several years of experience, along with the ability to actually teach (another barrier.)
Lesson Learned – First figure out the barriers to entry. Then use them.
There have been other mistakes over the years, but these were the biggest ones. We always looked at our mistakes as learning experiences. As such, we paid our tuition and gained new knowledge in how to run our consulting firm.
Closing thought – My late business partner often mused, “I never make the same mistake twice. It often takes me three or four times until I realize what I’m doing wrong.” And then we would laugh and move on.
RIP Herr Kimmel – It has now been three years since you left and stuck me with this crazy engineering consulting firm. So here is a toast – which I hope is wrong 🙂
© 2018 – 2019, https:. All rights reserved.
Some consulting sales resources…
Is sales a dirty word to you? Does it strike fear to pick up the phone and talk to a stranger? And do you need to sell in the first place? After all, as a consultant, the world should simply recognize your expertise, right?
The answer to the last question — WRONG! And if you are not willing to master some basic sales skills don’t even bother to hang out your shingle as a solo consultant. Yes, you might make it — I’ve know one or two who have — but the odds are very small that you will succeed without first selling yourself and your capabilities.
Never fear – there are resources out there relevant to consultants. Here are several.
Podcast – As I did recently, spend thirty minutes listening to a podcast by Anthony Iannarino. Speaker, author, and successful sales leader, Anthony share valuable insights for consultants who are worried about the negative stigma of sales.
Anthony discusses how to embrace sales as a way to help others achieve results they might not achieve on their own. Isn’t that what consulting is all about?
This podcast is part of a free series from Consulting Success, hosted by Michael Zipursky, a entrepreneur, coach, and founder/CEO of a firm dedicated to helping consultants grow. While his focus is on general management consulting, his firm is still a good resource for professional/technical consultants as well.
Book – When recently asked for a book on sales for consultants, I immediately thought of Rainmaking Conversations by the RAIN Group. Well written, you can learn a lot in a few hours with this book. I’ve reread it several times, even though I consider myself pretty seasoned in sales.
The book outlines a simple process for selling consulting services, which differs from selling products. Also, it eschews old fashioned huckster methods, and advocates acting as a professional advisor. Think like a doctor, not like a used car salesman.
Here is my review of the book, done back in 2011.
Classes – While there are numerous on-line and live classes on sales, I once again found the RAIN Group useful for consultants. I purchased their on-line version several years, and gained some new insights. It is a bigger investment, and may be more than a newbie might want to make. Worthwhile down the road, but their book will get you started right away.
A great introductory and affordable sales class is from friend, colleague and fellow Arizonan Pamela Slim. I purchased her introductory on-line sales class some years back. Pretty basic, it would be perfect those just starting out in any small business. Not only does Pam address simple techniques, but in her gentle way she also addresses the emotional hurdles of selling.
Blog posts – Here are several posts I’ve done on the subject. These reflect almost forty years of sales and marketing experience — seven years as a Sales Engineer, three years as a Technical Marketer, and thirty years as an independent Consulting Engineer. And I’m still learning…
- Seven Steps in Selling
- Sales Step #1 – Establish Rapport
- Sales Step #2 – Qualification
- Sales Step #3 – Diagnosed Prescribe
- Sales Step #4 – Quote/Propose
- Sales Step #5 – Deliver
- Sales Step #6 – Follow Up
- Sales Step #7 – Referrals
Finally, check out my recent post “Sales as a Bridge to Consulting” which in turn references a magazine article “Sales Engineering – Is It For You?”
For me, sales is NOT a dirty word, but a learned skill that was crucial to my success as a consultant!
© 2018, https:. All rights reserved.
Free Recorded Webinar – So You Want To Be a Consultant?
Curious about consulting? How to get started? My FREE one hour introductory webinar on consulting is now available on line. Click here.
Learn some basics on how to start, build, and maintain a small part-time for full-time consulting practice. I briefly address four key questions I’m regularly asked:
- How do you get leads?
- How do you set fees?
- How do you decide what to consult about?
- Last, but not least – How do I get started?
Sponsored by the IEEE Consultants Network (Institute of Electrical & Electronics Engineers – my professional society. This talk has been shared at several technical conferences and has been well received.
Coming soon…
- “Consulting for Geeks”, an e-book from the IEEE. Selected posts from JumpToConsulting.
- “Consulting for Newbies”, a multi-module class that expands on the one hour webinar. *
*Soon to run a pilot class, with limited enrollment & personal interaction at a special cost. Interested? Contact me at daryl@jumptoconsulting.com
Sign up for the Newsletter for updates and announcements on the above.
© 2018, https:. All rights reserved.
An epiphany on financial priorities…
Time for a mini-rant…
While walking the dog (Sami the Shih Tzu) a few nights ago, I was struck with an epiphany of sorts. It involved a neighbor and his vehicles.
Parked in his driveway were a new Cadillac Escalade and a new Audi, along with a pretty nice Harley motorcycle. Nothing wrong with that, except he has complained in the past about not being able to retire.
That is when it struck me. For the cost of those vehicles, he could have bought a rental property, which would increase in value with time (rather than decrease) and throw off cash in the meantime. He would own a cash producing asset, rather than cash sucking liabilities.
Which is what we did several years ago. We bought a rental property, and continue to drive two old vehicles instead (a 10 car old truck, and a 20 year old sedan.) I could care less about impressing the neighbors.
The cash flow is great — the property has increased in value — and we enjoy the tax advantages of being a landlord. It has outperformed many of our other investments.
Not bragging or criticizing here. Just sharing an observation.
Maybe my attitude came from starting and running my own business – or maybe it was a reason I was able to do so in the first place. Hmmm…
Too many people have told me they would like to start their own business (including consulting), but can’t afford to do so. Yet they drive fancy cars and more.
It is often just a simple case of financial priorities.
End of rant…
P.S. Remember – Uncle Daryl want YOU to find your freedom too — financial, occupational, and more.
Read more here:
- Consulting as a path to financial independence – Part I
- Consulting as a path to financial independence – Part II
- Resource Review – Stop Acting Rich and Start Living Like A Real Millionaire
© 2018, https:. All rights reserved.
Do The Hard Stuff … Not The Cool Stuff…
When trying to decide on what to consult… don’t go with the cool stuff that everybody else wants to do (and thus won’t pay for)… rather, go with the hard stuff that others don’t want to do (and will gladly pay for.)
We learned that lesson thirty years ago transitioning from part-time to full-time consulting. As engineers, we would hear about design projects that sounded cool. But those were the projects that in-house engineers kept for themselves.
On the other hand, clients were happy to farm out the not so cool jobs — such as EMI (electromagnetic interference), and area where we had years of experience.
So we decided to focus on the “table scraps” of EMI. But those table scraps proved lucrative, and we both made small fortunes doing what others did not want to do. And we got to do it as independent consulting engineers.
Another bonus was most clients did not need full time EMI help. So we moved from client to client, quickly picking up new experience and knowledge. We also escaped corporate politics, a major reason for making our JumpToConsulting in the first place. Freedom rocks!
Others have stumbled into the same solution. When engineering colleague Ken Wyatt approached early retirement, his original plan was to teach wildlife photography, a long time passion. But he quickly found little interest — although cool, nobody was was willing to pay serious money for something they could learn on their own as a hobby.
So Ken went to Plan B. (As engineers, it is a always good to have a backup plan.) He began consulting in the same area as his old job (EMI.) Was he going back to work? No, he was building a new business the has proved quite successful. And like me, he enjoys his freedom.
Incidentally, we were delighted to have Ken join us in the EMI fray. It was like having another doctor in a town full of sick people. With my business partner’s passing and my pulling back, I now regularly refer business to Ken. Would not have happened if had stayed with the cool stuff.
This is good advice for all — not just consultants. A recent magazine article told how high-tech companies often struggle to find programmers to work on the tough problems — while there is an abundance of those who can write simple phone apps. The former is hard — the latter is cool.
One last example — my older son, the catalyst for this blog. With an MBA in finance, he loves business and is now a CFO. At one time, he hung out his consulting shingle, until a client made him an offer he couldn’t refuse. A side benefit of consulting — high visibility into opportunities you might never see otherwise.
Early in his career, he worked for an accounting firm. Lacking his enthusiasm for finance, I commented, “People like me will pay people like you good money to do their taxes.” He just laughed. It may not be easy —it may not be cool — but it pays very well and he enjoys it.
Finally — as a consultant, remember that people will pay YOU good money to solve their HARD problems — but not their COOL ones.
Last year, millions of 1/4 inch drill bits were sold — not because people wanted to buy 1/4 inch drill bits — but because they wanted 1/4 inch holes.
Other posts you may find of interest:
- Niche Marketing
- Quick Advice for a Newbie
- Five Things to Consider For a New Practice
- Five Steps in Marketing
© 2018, https:. All rights reserved.
The Synergy of Training and Consulting…
If you are a consulting firm, consider adding training to your services… if you are a training firm, consider adding consulting. There is a strong synergy between the two.
I recently enrolled in a course on how to develop on-line training classes. Two goals:
- JumpToConsulting – Develop a multi-module course for newbies (or choose just curious) on how to start/build/operate a small consulting firm. Always in the back of my mind, this is the thrust of this blog.
- EMIGURU – Put existing class materials on-line for engineers seeking information on EMI/EMC (electromagnetic interference & compatibility), the thrust of my engineering consulting firm for the last 30+ years.
Both are offered in the spirit of “do some good —have some fun – make some money.” Watch the blog for more details as both unfold.
A key point in the course building class is combining a personal touch with the training. That touch spells the difference between information and education.
When we started our engineering firm, our efforts were aimed at solving problems. But not long after starting, clients began to ask for help in preventing future problems. So we developed some training materials to address those wants and needs.
Eventually, the revenues from the training side of the business often exceeded the revenues from the consulting side of the business. But rather than abandon consulting, we kept both efforts going. And that decision was a key to our success in both areas.
First, the consulting often fed the training. After solving a problem, we asked if clients would like to prevent them in the future. The problems themselves provided fodder for the classes. Nothing like showing students how to identify and fix real world problems.
So developed and offered both in-house and public classes.
The latter came later, and were more tricky, as we had to master promotion in addition to presenting. We found targeted direct mail worked the best. We tried e-mail, but had poor results. Too much spam, I suppose.
The public promotions were not cheap — we typically mailed 50,000 to 75,000 mailers per year. It took a while, but paid off when we finally solved the promotions puzzle. As a result, I suggest you pursue in-house classes first.
Second, the training often fed consulting. This is where the public classes really shone. When students had problems, we were often the first the called for consulting.
If you don’t feel ready to do full promotions for public classes, consider free talks or workshops sponsored by professional groups or trade shows. While you don’t get paid, you don’t pay for the promotion. Such talks can still bring in business, while enhancing your credibility and visibility.
The synergy of consulting and training worked very well for my consulting firm. Training was often scheduled months in advance and assured future revenues. Consulting filled in the gaps. The synergy provided a nice balance in both time and money.
To kick off my consulting class, please join me on February 8 for a FREE one-hour webinar “So You Want To Be A Consultant” sponsored by the IEEE, my professional society. Hoping to inspire some engineering colleagues, but all are welcome. REGISTER HERE.
© 2018, https:. All rights reserved.
Webinar – So You Want To Be a Consultant?
Curious about consulting? How to get started? Join me for this FREE one-hour webinar.
Thursday, February 8, 2018 at 2PM EST
Register Here
Sponsored by the IEEE* Consultants Network
*Institute of Electrical & Electronics Engineers – my professional society.
Learn some basics on how to start, build, and maintain a small part-time for full-time consulting practice. I’ll briefly address four key questions I’m regularly asked:
- How do you get leads?
- How do you set fees?
- How do you decide what to consult about?
- Last, but not least – How do I get started?
This talk has been shared at several technical conferences. But you don’t need to be an engineer (or an IEEE member) to attend – it is general and it is FREE.
All part of my secret plan to help those interested enjoy the consulting life as I have for over 30 years as a full time consulting engineer.
Happy New Year! Is this the year YOU hang out YOUR consulting shingle?
© 2018, https:. All rights reserved.
Bigotry and business don’t mix…
Time for a mini-rant… While I try to stay politically neutral, this seems particularly appropriate these days…
Don’t mix business with bigotry!
Last year I read about a pizza place that was under fire for saying they would not serve at a gay wedding. Then they whined that the press was out to crucify them. Really?
What if they had refused to serve Blacks…or Jews…or ??? Didn’t we get over that in the last century? (Based on recent events, maybe not…)
Furthermore, how foolish! With the country equally divided on so many social issues, why alienate half your potential customers?
But let’s be positive.
What would have happened if they said they WOULD serve such customers? Let me share the Pittsburgh Willy story.
In 2012, I wrote about Randy’s success as a successful Arizona hot-dog entrepreneur. Yes, he is not a consultant, but I love his hot dogs… and his stories.
One of my favorite stories was how Randy became a preferred vendor in the local gay community. Sorry to say, Arizona is not the friendliest place for gays. But when asked to support the Gay Rights parade several years ago, he readily agreed.
He and a friend even carried a banner. He joked they were a minority — perhaps the only two straight guys in the parade. Later he served gourmet dogs from his hot dog cart to a hungry crowd – the only hot dog vendor to do so. Pretty good business decision, huh?
In addition to being a good businessman, Randy is an very friendly and funny guy. So when asked to support a gay event in Bisbee AZ, once again he agreed. He was the only hot dog vendor invited to the event. As an aside, one of his gourmet hot dogs – the Big Willie – was a huge hit 🙂
Randy graduated from the hot dog stand, and has since opened a restaurant in Chandler, AZ. The dogs are great, and EVERYBODY is welcome there. Just good business!
So as a consultant (or any other businessperson) I suggest you do not tolerate discrimination or hate of any kind. DON’T add bigotry to the mix!
<End of rant>
P.S. If this post offended you, don’t consult. If you can’t look beyond your own views, you don’t have what it takes to succeed as a consultant.
(More here from folk musicians Peter, Paul, and Mary.)
© 2017, https:. All rights reserved.
Do I Need a License to Consult???
Some times yes … sometimes no… sometimes maybe… Here is a quick overview:
–If you are a business consultant, you probably don’t need a license other than possible tax licenses. There are no licensing boards for business consultants.
–If you are a professional consultant, however, you may need a license before offering your services to the public. In certain professions it is mandatory – don’t even think of practicing medicine or law without a license.
In other professions like engineering or accounting, while legally mandated it is not always enforced. But don’t use the title PE (Professional Engineer) or CPA (Certified Public Accountant) unless you are licensed – you will invite the wrath of licensing boards.
Nevertheless, I often encourage my engineering colleagues to pursue a PE license. The following comment expands on why I do so. This was in response to a rather heated discussion on an engineering blog on the necessity of a PE license.
Glad to hear of your success against some clearly overreaching bureaucrats.
I say that as a PE/EE. Did getting my PE license make me a smarter engineer? No, but it did provide credibility when I started a consulting engineering firm 30 years ago, just like a CPA does for an accountant. It also has opened more than a few doors.
The PE license is valuable if you work for a consulting firm. This happened to an electronics design colleague (PE/EE) some years ago. He obtained his PE as a personal goal, not needing it while working for defense contractors.
Laid off in a slump, prospects were grim. That is, until he inquired at an engineering consulting firm, where most of their PEs were in electrical power. The firm was ecstatic to hire a PE/EE with electronics experience, to handle building electronics systems. Thus began a new and satisfying career.
As such, I often recommend the PE license — you never know when it might be useful. (Says the engineer who was laid off twice before he finally wised up and started consulting.)
More details on the engineer above here. Remember, when consulting it is all about credibility and visibility. Licenses and other valid credentials enhance that credibility.
P.S. Will be slowing down for the summer. Have grandkid plans, and hope to get in some RV time too. Best wishes for your summer too!
© 2017, https:. All rights reserved.
Consulting Fee Study – 2017…
Here is a link to a recent fee study by Consulting Success.
While this blog focuses on general business consulting, technical consultants should find this of use as well.
FYI, typical fees at Kimmel Gerke Associates were project based. Typical projects were in the $5,000 – $20,000 range and up. Typical annual compensations exceeded our corporate salaries, plus providing retirement funding, profits, and tax benefits.
As such, we did better than staying “employed.” Plus we had a lot more fun and freedom.
Not bragging — just saying it can be done. But it doesn’t happen overnight or without some work. You first need to build “credibility and visibility.”
Never too soon to start the process, so ask “What can I do TODAY?” Best wishes…
Here are three posts to help you start…
P.S. May slow down here for the summer, but stay tuned as I continue to share thoughts on making your own JumpToConsulting.
© 2017 – 2018, https:. All rights reserved.
On Competitive Advantages and other Buzzwords…
Time for a mini-rant, against advice often promoted by those wanting to sell you something.
For years, it was very popular in marketing circles to identify your USP (Unique Sales Proposition.) Large management consulting firms and their MBAs loved the term.
Later, that morphed into the UBP (Unique Buying Proposition) as the marketers realized the focus should be on the customer, not the product or service. At least it was a start.
Today, I read yet another marketing blog post that emphasized more buzzwords. (Be Unique, be the Thought Leader, blah, blah, blah…) The post segued into Positioning, Differentiation, Branding, etc. It even offered a comprehensive course on the topics.
But does all this apply to the small consulting firm? Often not, in my opinion. In fact, I suspect the overemphasis on buzzwords may prevent some considering consulting from actually jumping in. Paralysis by analysis.
Consider a surgeon. Does he/she need to be unique — the only specialist in the field or the most highly renowned surgeon in the world? Of course not. The surgeon simply needs to be able to help the patient. Isn’t that what consulting is all about?
Like the overworked Thought Leadership term, these attributes are not be necessary to start a small consulting firm. All you really need is Visibility & Credibility. These can be easily achieved with a bit of effort and some simple lead generation techniques.
So don’t let the fear of not being Unique, Differentiated, or Positioned stop you. While the buzzwords may apply to large consulting firms, they may not apply to you.
Pick your niches, start your marketing, and jump in. Time better spent than mastering another buzzword.
<End of rant>
P.S. Still not sure? Jump in part-time as a side-hustle. I did that for almost ten years, which greatly facilitated my full-time JumpToConsulting thirty years ago.
© 2017, https:. All rights reserved.
That’s what partners are for…
Two years ago this week my good friend and business partner of 40 years passed away from cancer. Time has softened the pain, but the sense of loss is still there.
While I generally recommend against partners, our partnership worked very well. We often mused about why it worked, when we had seen so many others fail.
Were we just lucky, or was there more?
Upon reflection, here are seven reasons:
(1) Respect – Neither of us tried to “boss” the other – it was a partnership of equals. We respected opinions, even when they were different. We checked our egos at the door.
We recognized the old saying, “If two people agree on everything, one of them is redundant.”
(2) Maturity – We were both in our 40s when we went into full-time consulting. We had achieved a level of business maturity. Not saying you can’t consult at a younger age, but a few gray hairs (or even no hair) can actually make age a friend.
As the late Howard Shenson said, “The forties are a good time to start consulting. By that time, you know what you are good at and like, and what you are poor at and don’t like. The secret is to focus on former, and ignore the latter.”
(3) Experience – We both brought unique experiences to the firm. Although we were both Electrical Engineers with similar technical experiences, Bill had management experience and I had sales/marketing experience.
As such we complemented each other in those two critical areas. Over the years, we both learned a LOT from each other as well.
(4) Honesty – Having both been burned by unscrupulous colleagues in the past, we pledged never to do that to each other. Nor to our clients. Integrity matters.
We followed the Golden Rule, “Do unto others as you would have them do unto you.”
(5) Longevity – For ten years, we worked together part time. So by the time we went full time, we already knew we worked well together.
We knew each other’s strengths, so we could take advantage of them. We also knew each others jokes 🙂
(6) Humor – Very important, we shared a sense humor. Often mildly cynical, neither of us took things too seriously. We joked and laughed a lot — even after the occasional disaster.
Our wives would often shake their heads as we rehashed some of those disasters.
(7) Support – On more than one occasion, we backed each other up – with very little notice.
When Bill lost his voice midway through a class, I was on a flight that night to rescue him. When my mother-in-law had a stroke, he jumped in and rescued me.
No apologies were ever needed. As Bill was fond of saying, “That’s what partners are for…”
So what final advice can I offer on partners? Proceed VERY carefully — I’ve seen too many cases turn into disasters. Use the seven reasons above as a checklist.
But I’ve also seen successes. My attorneys, my accountant, my financial advisor, and my doctor are in small practices and enjoy the camaraderie and support of congenial partners.
Like a good marriage, if you can make a partnership work, it can be wonderful. But like a bad marriage, the disasters can be devastating.
P.S. With Bill’s loss, I decided to cut back on the consulting. His passing was a grim reminder that life is not infinite. But I have great memories with my business partner, and would not trade them for anything.
© 2017, https:. All rights reserved.
Setting up your team of advisors…
As a consultant, you’re offering your expertise as a more efficient way to do things. Follow your own advice, and hire the expertise you need.
Years ago a new consultant (and fellow engineer) was grousing about how much trouble he was having with a fax program on his computer.
My response was “Why spend time on that when you could spend that time promoting your practice? Just go buy a fax. ” Sheepish, he agreed.
Done things like that myself. It is an easy trap to fall into, particularly when starting out and the budget is tight.
Here are my recommendations for setting up your professional team. Over the years, I have acquired eight that have all proven valuable to my consulting business.
(1)Attorney — Seek out an attorney who works with small businesses. If you brother-in-law specializes in divorces, move on. Better yet, ask him for a recommendation. If you don’t have a BIL, ask business colleagues.
That is how I found my business attorneys (MN and AZ.) They handled incorporations and also acted as “statutory agents.” The latter means they kept track of the annual corporate filings, for a very nominal fee.
They can also be very helpful if you are threatened with legal action. Yes, it happens, but having your attorney respond often nips things in the bud. (The voice of experience…)
(2) Accountant — Like your attorney, find an accountant who works with small business. I strongly recommend a CPA, which is very helpful if you are ever audited.
In addition to preparing your taxes, your accountant can set up your chart of accounts, and can handle payroll reports, retirement plans, and more. Trust me, it is worth it, and it leaves you free to pursue your business.
Accountants are also a good source of referrals to other specialists like financial planners (how I found mine.)
(3) Banker — As you should establish a separate business bank account, so should you establish a business relationship with a banker. The latter is very helpful if you ever need a loan for equipment or a vehicle.
While I’ve been with the same bank for many years, I’ve seen individual bankers come and go. As a result, I suggest an occasional short visit just to stay in touch.
(4) Computer — Unless you are a computer consultant yourself, find someone who can advise you and bail you out when thing go awry.
For years, we used by late business partner’s son for our PCs. When I recently switched to Apples, I found a local Apple consultant who was worth his weight in gold.
He accomplished in two days what might have taken me two months. Money well spent, and he is available if I have additional questions or problems.
(5) Internet – Planning a web site? Or have one that needs upgrading? Hire a web designer to both design and maintain your site. If you are blogging, you still provide the content, but you web consultant handles the rest.
Just today, I had a small problem with one of my sites. A quick email resolved the problem. Who knows how much time I might have spent trying to figure out what went wrong?
(6) Insurance Broker — Sooner or later, you will need business insurance. As a minimum, you’ll need “General Liability”, and perhaps “Professional Liability” insurance. If you have a business vehicle or commercial office space, you’ll need insurance for those too.
While your personal home/auto/life agent may be able to help, I’ve found a broker very useful in locating specialized policies for business.
(7) Estate lawyer — Even if you are young, it is never too soon to think the unthinkable. A sad example is the entertainer Prince, who died suddenly without a will. Not only is there infighting among relatives, but his philanthropic wishes will likely never be realized.
Ask your business attorney for a recommendation — and then meet with him or her!
(8) Financial planner — Last, but not least, add this member to your team. Time flies by, and suddenly you are looking at retirement – or worse, wishing you could retire.
Although many people fancy themselves good investors, unless you are willing to put in a lot of time and energy, I suggest professional help.
My recommendation is for a fiduciary whose fee is based on your assets under management. That way there are no conflicts — both of you are on the same team.
I found my financial advisor through my accountant, and could not be more pleased. I often joke that even when the market crashed, he lost less that I would have lost.
But the losses were on paper, and thanks to his advice, I am now very well positioned in my retirement. Which allows me time to spend on the JumpToConsulting project 🙂
So those are the eight members of my team of professional advisors. An now, the standard disclaimer – this post is educational only and does not constitute professional legal or financial advice.
But do seek out that professional advice — you will not regret it!
P.S. As an aside, most of my advisors are in small practices themselves – often one or two people. I prefer that — they provide a perspective often missing from larger firms.
© 2017, https:. All rights reserved.
Urgent vs Important…
Got this from a newsletter to HOA (Home Owners Association) board members. Struck me as such a good idea I decided to share it here.
It is called the Eisenhower principle. In a 1954 speech, US President Eisenhower said:
I have two kinds of problems: urgent and important. The urgent are (often) not important, and the important are never urgent.
Eisenhower recognized one must be effective as well as efficient. We need to spend time on the important things — not just the urgent ones. To wit:
- Important activities have outcomes that lead to achieving our goals.
- Urgent activities demand immediate attention, and typically involve somebody else’s goals. However, the consequences of not dealing with them can be critical.
To use this principle, list all of the activities you need to address, no matter how unimportant. Next, prioritize the activities (1-10) Then put each activity in on of the four following categories.
Schedule activities based on the following:
- Category I – HIGH urgency and HIGH importance — DO IT NOW
- Category II – HIGH urgency and LOW importance – DELEGATE IT
- Category III – LOW urgency and HIGH importance – SCHEDULE IT
- Category IV – LOW urgency and LOW importance – DUMP IT
Eisenhower was highly productive his entire life. Prior to being the 34th US President (1953-1961) he was the Supreme Commander of Allied Forces in Europe (Five Star General), served as President of Columbia University and was the first Supreme Commander of NATO. And he still found time to golf and paint.
This simple tool is useful to both you (as a consultant) and your clients. Thanks Ike!
P.S. Visited the Eisenhower Library in Abilene KS last year. Well worth the visit if you are a history buff like I am.
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