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The Consulting Solution

The Consulting Solution

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Introduction...........................................................................................................4 About Me.................................................................................................................5 Getting Started ....................................................................................................6 The Hours...............................................................................................................6 Accounting Skills...................................................................................................6 Bill Collector..........................................................................................................7 Skill Set..................................................................................................................7 The Process............................................................................................................9 Selling ....................................................................................................................9 The Proposal ........................................................................................................14 Pricing ..................................................................................................................15 Return on Investment (ROI) ................................................................................16 Landing the Deal..................................................................................................17 Delivery................................................................................................................18 The Reference ......................................................................................................19 Housekeeping .....................................................................................................20 Sure Fire ways to earn over $200 per hour ...........................................22 The Simple Discovery that “woke me up” to Fixed Fee pricing .........................22 Our First Fixed-Fee Engagement.........................................................................23 What factors went into this project earning us so much? ....................................24 Another Fixed-Price example ..............................................................................25 The Formula for Success .....................................................................................26 Fixed fee pricing ..........................................................................................26 Speed of Execution ......................................................................................26 Perceived Demand .......................................................................................26 Time Constraint ...........................................................................................27 Customer Service .........................................................................................27 The 5 Step Action Plan to Earning Over $200 per hour ......................................27 Step #1: Decide what type of work suits a fixed pricing structure ..............27 Step #2: Improve your Perceived Demand ..................................................27 Step #3: Speed of Execution ........................................................................28 Step #4: Develop your Time Constraints.....................................................28 Step #5: Improve on your current level of Customer Service. ....................28 Failure is not an option – usually................................................................29 Billing ..................................................................................................................29 Not Meeting Deadlines ........................................................................................29 Cash Flow ............................................................................................................29 Fresh Leads..........................................................................................................31 Tools .......................................................................................................................32 A Big Step ............................................................................................................33

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The author, Cam Forbes, and publisher Architech Ventures make no representation or warranties of any kind with regard to the completeness or accuracy of the contents of this book. They accept no liability of any kind for any losses or damages caused or alleged to be caused, directly or indirectly, from using the information contained in this package.

The Consulting Solution – your source for all the information you need to start or revive your Consulting business. ©2005 All Rights Reserved Worldwide. Second Edition 2005

No part of this publication may be stored in a retrieval system, transmitted or reproduced in any way, including but not limited to digital copying and printing without prior agreement and written permission of the publisher.

Cam Forbes Architech Ventures PO Box 9022 Temecula, California 92589-9022

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As one of my colleagues said – it requires skills from accounting to time management and there’s more than a few hurdles in your path. It takes more than a business card and some organizational skills to start your own consulting business. I would suggest getting comfortable because once you get started you won’t want to stop! Since you’ve purchased my product I’m assuming you have some level of business expertise and want to build on that experience to take you to the next level. I put this information kit together for you. You may also be contracting or on a contract-to-hire project right now. What • • • • I will show you with this program is how you can strike out on your own be your own boss not have to worry about someone else profiting from YOUR work be able to replicate this process over and over again But be forewarned.Introduction First I would like to thank you for purchasing my program and in the near future you will likely be thanking yourself for purchasing it also. 4 .

I have a lot of experience with major corporations across many industries. Since leaving PwC. Business Process Re-engineering (BPR). There is so much information available to you in this package and on the internet that you can literally go out there and pull all the information you would need to successfully complete entire projects! Now as I move on to new ventures I want to share the success that I’ve had with you. I’ve participated in or managed 12 full-lifecycle Software application implementations for Fortune 1000 customers where the project consulting expense was $1 Million or more – the largest was $30 million! Along the way I also worked on projects with little or nothing to do with software – performing tasks like Organizational Change Management (OCM). graphic design. After working on many successful projects in a variety of technical roles. I earned my Oracle Certified Professional (OCP) and Oracle Master in database administration and developer suite in January 2000. These types of projects can be performed by ANYONE with any slight bit of business experience. My papers and ideas have been presented at Software conferences and publications worldwide. I started working for Oracle Consulting when I got out of college in 1993. – an independent consulting organization serving the small to medium sized business (SMB) market. This led me to create Architech Ventures. ltd.About Me I have been in the Consulting business for 13 years and have earned millions of dollars by following the steps I describe in this program. I have been with a few smaller software and consulting companies where my success continued. I’m a member of OAUG. I joined PriceWaterhouseCoopers where I parlayed that success to huge financial and knowledge gains. This is a market that is drastically underserved by the larger consulting organizations and is therefore a veritable hunting ground for new business. Knowledge Management and Continual Process Improvement (CPI). web development and office productivity. Oracle TechNet and a regular fixture in many of the Software-related website forums and newsgroups. AppsNet. Throughout all of these clients I’ve worked with various software programs covering areas such as database. 5 .

Getting Started Management consultants are among the highest paid independent consultants and earn an AVERAGE of $130/hour or more (at one point I was earning $240/hour). especially at the outset. take inventory of your selling skills and most importantly what skills you are going to bring to market. Accounting Skills Every consultant needs to be able to do some basic accounting in order to keep track of your hours billed. but trust me it’s not. This has left an enormous void in business processes. your basic accounting skills. I started a project working after normal business hours and have been doing something on the side ever since. they are willing to pay TOP DOLLAR to get this advice! Luckily the information I’m making available to you is universal and has worked across all these organizations and will work at any clients you come across.. The Hours Consulting generally requires some long hours.000/year in base salary! Partners and Managing Partners at these firms make $1M to $5M per year! How can they do that. You don’t need a full time accountant at the outset. the dot-bomb explosion. and Boston Consulting Group start their ENTRY LEVEL EMPLOYEES at up to $130. Downsizing. restructuring. you need to do a gut check. Most consultants I have worked with know about long hours.$500K flowing through your personal bank account each month to pay your contractors. organizational management and day-to-day operations at most companies. They need your/our help! Not only that. People notice – the people you don’t WANT to notice! Let’s just leave it at that… 6 . unbiased advice on how to make sense of the new business landscape. It may sound fun to have $400K . If you get into a situation like me where you’re managing 20-30 consultants on multiple projects then you will definitely want an administrative assistant of some sort as well as an accountant. I’ll make your success feel like a no-brainer. mergers & acquisitions. and other business forces have left ALL companies in need of outside. Now more than ever. monitor your expenses and client billing. McKinsey & Co. Large management consulting firms such as Bain & Co. I began this way. We’ve all heard about all the massive layoffs that have happened over the last few years. You need to determine whether you’re willing to work long hours.. I believe this is because most consultants initiate a consulting business by doing parttime work while working a full-time job. you ask? It’s easy… Businesses need help. Before you leave your well-paying job or shell out big bucks for stationery and office space.

power. However. your client won’t have a leg to stand on when it comes time to pay your invoice.000 or more per year through reduced support/maintenance/licensing fees.Back to the point.11 technologies and rolling them out in the Enterprise). You need to keep track of the hours you spent working on your client projects and have them sign off on the hours you plan to bill them BEFORE you send them an invoice. For example. So deciding what skills you’re going to market is the key to being successful. whatever) you will drop the number of calls coming into the help desk (saving time and money) and improve customer satisfaction. Some of the best clients can be really bad at remitting payment. Hot categories are supply chain planning (inventory control systems). increased testing. If you want to market your computer/software related skills.that’s what the server experts are there for! Looking at other areas. Skill Set This is important. If you could help a large company improve the quality of the products coming out of IS (through process redesign. I’m assuming if you’re reading this that you have some type of skill that is in need by someone else – otherwise you wouldn’t be able to step into this market with ease. In consulting you are marketing yourself. Network/Security Engineering ($100/hour). Late payments by clients can kill your business before you even get it off the ground. The areas that have been hot and remain hot are process-focused efforts. think of Quality Assurance. If you have signed paperwork detailing how much time you have worked on a project. Graphic/Web design (Macromedia Studio MX skills can get you $85-$95/hour on contract). Someone can manage a server consolidation effort working with the system administrators and engineers. 90% of the calls to a company’s help desk are typically related to problems caused by poor internal controls in the IS department. SAP ($125/hour). Eliminating 1 NT or UNIX server can save a company $12. and day-to-day system management. if you have a solid business plan (we’ll discuss that in a minute) you can get enough small business funding to get you through the first few months while you’re trying to get up-and-running and working with your clients to make sure they pay on time. Oracle ($90-$150/hour). This is important because you don’t want clients that are happy with your work until you send them an invoice. You don’t have to be a server expert . But 7 . Usually accounts payable is handled outside of the department you will be working with so you will likely not even know the person who is (or is not) cutting you a check. You need to setup one day a month (or two if you do bi-weekly billing) to generate bills and track who hasn’t paid on time. look at Server Consolidation. the hot areas right now are Siebel ($100/hour). Bill Collector You need to be very professional about billing your clients. Wireless (802.

quality assurance. Dawn managed the testing and change management processes and was being paid over $200/hour. and flew back and forth to home (to Utah) every week all on the client’s dime.still. It just takes the will to make it happen and the ability to sell yourself. process analysis/improvement. had a corporate apartment in San Jose. Along the way she picked up some of the Oracle Apps knowledge. If you can mold yourself into that kind of consultant the world will be your oyster. So believe me when I tell you that it can be done. For example. security processes. Now she markets herself as a change management director specifically for Oracle Applications and SAP (similar product) projects! Last I heard she was still commanding over $200/hour. Which leads me to… 8 . the high dollar skills are the soft skills .organizational change management. a woman (let’s call her Dawn) worked with on a project with me and had never seen Oracle Applications in her life.

com ). Since it will be in their words and directly touch THEIR pain.hotjobs.com) even America’s Job Bank (http://www. Here is a listing of popular sites that I’ve bookmarked and used myself in scouting out new clients: Ryze Business Networking site that links you with other business people with similar interests. No matter what business you get into. Search for the kinds of companies you want to target – use their names if you want. It’s imperative that you constantly ask current clients for more work and also ask them if they know of other similar businesses that can use your skills. project prospecting. Company news and filings can be a gold mine of information – you can use this to build the business case for your services and submit it back to them. You can register at FreeEDGAR to view real time SEC filings (http://www. 15 million new movers.infousa. Let’s face it – consultants aren’t always the best salespeople. and more.com 9 . maybe you already did and if so.careerbuilder. Every business needs marketing to gain exposure and clients. Another way to gather information about what’s going on at your target organization is through web searches and SEC filings. Have other people generate leads for you. http://www. good for you!). you need to sell yourself. 200 million people.monster. This is one of the top issues that can kill a business.com infoUSA: Mailing Lists.ryze. While you’re there you should also review their recent headlines/news/press releases.dni.The Process Selling This is basic. So let me get you jump-started on finding your first few clients. Also check business to business portals and websites.freeedgar. CareerBuilder (http://www. and staffing. Sales Leads & Databases Offers sales leads and mailing lists of 14 million businesses. and you need to be willing to sell yourself. Monster (http://www.com ). This is an ongoing networking process that you need to develop to establish a longterm business. you need to sell to make money. This is so easy you’ll be mad that you didn’t think of it yourself (well. Whether you own a mom and pop bakery or a multi-million dollar consulting practice.com ). You need to keep making new contacts to get more business.us/). http://list. There are many ways to do this. The first thing you’ll need to do is scout out different organizations and determine what services they need. Here are a few of my secrets: Go to the job sites like HotJobs (http://www. A good source for lead generation. Includes a 30% discount. You can also go directly to the companies’ websites to see their open job listings.ajb. you already have a foot in the door.

and databases specifically designed to support marketing programs.Accurate Leads: Sales Leads Provides lead generation services including mailing lists. mail lists.com 10 .hoovers. sales prospecting and opt-in email in the US and worldwide.leemarcstein. specialty lists and consumer lists. industry overviews.com D. and customer surveys.E. http://www. including qualified lead lists.net Lee Marc Stein: Direct Marketing for Sales Prospecting Provides direct marketing consulting and creative services to improve business-to-business lead generation programs. telemarketing lists. product sales.com Unicall International: Lead Generation Offers a wide array of outbound telemarketing services including lead generation.com Pioneer Information & Marketing: Lead Generation Resources Offers mortgage.cerida.pioneerinfo.com Cerida: Sales Prospecting A B2B contact center that qualifies leads and profiles audiences to deliver targetted prospects. information sources. telemarketing. business. http://www.com Prospects Influential: Direct Marketing List Broker Provides targeted business and consumer prospect lists for mailing. and sales development specialists. http://www. competitors and news. http://www. http://www.com Hoover's Online: Business Intelligence For Lead Generation Provides in-depth business and public/private company information. Lead.unicallinc. including profiles. financials. http://www. faxing. pipeline. http://www.I. http://www. Management Group: Sales Prospecting Provides sales prospecting and lead generation services.prospectsinfluential. business lists. telephony services and optimizing trade show effectiveness.accurateleads.dei-sales. officers. and consumer mailing lists.

Inc: Telemarketing Leads Offers call center outsourcing consulting services at no charge.harrisinfo. telephone surveys. Provides price quotes on lead generation and call center outsourcing. http://www.com VendorSeek: Lead Generation Price Quotes Connects business consumers to pre-qualified vendors for a variety of services. cold calling. Outbound and inbound call center used across all verticals and industries. http://www. customizable lead acquisition. http://www.com TJ Telemarketing: Lead Generation Offers pre-qualified life and major medical health insurance prospects generated by telemarketing.InTouch.tjtelemarketing. Incorporated: B2B Sales Lead Generation Specializes in providing highly qualified sales lead prospects. Appointment setting.estrelams.com Performance Telemarketing.performancetm. lead qualifying and telemarketing. best practices.businessbeanstalk.com Harris InfoSource: Prospecting Database for Sales Leads Offers online prospecting database for finding new sales leads. http://www. http://www.vendorseek. Utilizes real world experience. and distribution platform.com 11 . management. http://www. Leads are exclusive & personalized.tsfcallcenter.com Tele-SalesForce: Lead Generation Offers an eight-step program to help increase tele-sales effectiveness.increasemysales. and proprietary tools for rapid ROI. Provides multiple quotes for IB/OB teleservices from professional call center agencies. Free 7-day trial. http://www.com Estrela Marketing Solutions: Lead Prospecting Provides a real-time. http://www. Download targeted lists to import into contact management programs.com Business Beanstalk: Lead Generation Call center solutions for small and medium sized businesses.

personality and skill set).alexa. I would like a chance to submit a proposal.com ). service. Talk to the receptionist.” As you gain success and clients this will become natural to you and you will develop your own script. If you are interested at all in Technology Consulting (PC.com Once you determine which companies are in need of your expertise – put together a proposal or if its too early for that. I am based locally in your area.dice. Sometimes you can even get this information from their SEC filings (if they are a public company). Ask for the Manager or Director of the department. etc) there are a lot of Tech-specific sites that offer jobs such as Dice (http://www. I wanted to know who I could talk to in your organization to determine if there may be a need for my services. reseller and hardware information on thousands of IT solutions. It is easiest to reach me at ______________. Any deals you land through them will require that you pay them a percentage of your hourly bill rate. Be careful though – a lot of the jobs offered on these tech sites are entered by recruiters or headhunters. That can get costly for you (and lucrative for them!) on a long term engagement. tell them that you would like to speak with someone in the Marketing. Computer.google. 12 . You can get their contact information from places like A9 (http://www. http://www. Marketing. at least a brief email explaining what you have to offer (see the next section) and email it to them.com) or Google (http://www. Finance or Procurement department.a9. Development.KnowledgeStorm: Sales Lead Generation IT Solutions Business technology search site offering software. and my prices are extremely competitive with what you are currently paying other services organizations. Web Design. You can also leave me a voice mail at ______________ if I am personally unable to take your call.com). Alexa (http://www. Take care. I’m an independent consultant specializing in ______________. If so. add this) Please call me back when you have a chance.knowledgestorm.com). (If you get voice mail. charm. Call the main number for the company you found (can usually be found on the ‘contact us’ section of their corporate website). Use the following script: “Hi ______. this is ______________ calling. You will find that I am (insert information about your work ethic. You can also contact them directly. I look forward to hearing back from you soon.

it’s time for the proposal… 13 .This will get you a long way to landing deals. Once you have someone interested in your services.

including your proposed start date. I have provided my TOP SECRET presentation helper (Powerpoint). I have included some top notch templates that I’ve used to propose on work as part of this package. By including the start date. Now we’re going to have to revise the SOW to reflect the new dates!” Please don’t forget the Consulting Services Agreement! I’ve used this on many occasions to hold my clients’ feet to the flame. As things drag on you can use this as leverage saying “I could already be working on this project. This little helper presentation has saved me more times that I can count! Presentations I have given have even received applause! Keep the proposal pretty high level and detail exactly what you will provide in the SOW .The Proposal Here’s where you’re going to lay out all the services you’re going to provide your new client. Most Business Professionals aren’t very polished when it comes to presenting. Since many proposals may require a formal presentation. 14 . you are pointing out that they will get results quicker by moving faster to bring you in. Consulting Services Agreement (CSA) and Statement of Work (SOW). They are pretty selfexplanatory. In the ‘Contracts and Proposals’ section you will find a Proposal Template. You need to get them to sign a services agreement to protect your own liability.

” At that point you concede your expenses (which you may or may not have incurred anyway). One trick I’ve used successfully is to quote an hourly rate. a computer workstation and a telephone. if you are charging by the hour. This effectively increases your bill rate by 10%! If you will be traveling long distances or staying overnight in a hotel. This will turn them off and make you bored! One thing I’ve done over the years is include a pre-arrival checklist with the statement of work. here are some basic ballpark rates: Business Strategy: Marketing Consulting: Organization Change Mgt: Quality Assurance: Bus. Depending on the type of work you’re going after you need to price your services accordingly. then add another line saying “Expenses not to exceed 10% of Billing”. $10. Use your own discretion here. Nonetheless. if you submit a proposal for $100/hour + 10% expenses it’s easy for the client to say “I’ll pay $100. One of the important pieces of the proposal is the… 15 . and still get your proposed rate! You should also include information in the Statement of Work regarding your expectations for the client. For example. You don’t want to show up and have nothing to do.Pricing Pricing can be a touchy subject but it needs to be addressed. this is not an unreasonable request. I’ve included a thorough discussion of fixed-fee/fixed-bid arrangements at the end of this document (see Sure Fire ways to earn $200/hour). It also gives the client some wiggle room without having to negotiate your rate down. you may want to include that you expect them to provide you with a desk. It’s a classy touch. For example. If you will be doing technical work add that all necessary development tools and system access will be provided by the client.000-$35. but your expenses will be included. Make sure this is all in place before you begin work. If the client site is 2 miles from your house it is. Process Re-engineering: Project Manager: $120-150/hour $80-100/hour.000 per campaign $110-$130/hour $70-$120/hour $90-$130/hour $240/hour+ It’s very important to specify in the Statement of Work (SOW) whether your expenses will be included in the rate. This reminds the client that they should make sure you have a place to sit and work and all your system accounts are setup before you show up.

Business Managers will most likely need to provide some sort of return on investment calculation. You will likely need to tailor these to your client’s specifications and your skill set.Return on Investment (ROI) Ever since the dot-com bubble popped. That will make the approval process go faster and get you in the door quicker. The key is to anticipate this and add it into your proposal. I’ve included some very powerful ROI calculators in the section entitled ‘Return on Investment Calculators’. but they will put you miles ahead of the competition. Make sure the savings are tangible. Be realistic in your analysis. In order to get approval for new projects or to bring in consulting expertise. ROI has become an increasingly important part of corporate budgeting and overall performance evaluation. 16 .

Also you may want to allow the client to negotiate a bit on the scope of work. At this point you need to keep in DAILY CONTACT with the key individuals you’ve been talking to in the target organization. and signing it shows your commitment to be responsible. During the sales process you will have made yourself look like a team player and they are now envisioning you as part of their group. By giving them the impression that you are going out of your way for them. 17 . If you will have access to company-sensitive information you will likely need to sign a Non-Disclosure Agreement (NDA) with the client company. if you’ve gotten this far you’re golden. This is no big deal.Landing the Deal Okay. You’re almost in the door! All you need to do is continue communicating with the client. but give them concessions if it will help you win the deal. just make sure you stick to the agreement and don’t profit from any information you happen to come across. Stand firm and keep highlighting your strengths and what you bring to the table that they’re lacking. You need to portray to them that is will be lose-lose if this doesn’t come through. your fees or whatever else they feel like negotiating. they will do the same for you. This is more of a protection for THEM than you. Be confident and act like you’re trying to arrange your schedule to make the project work for YOU.

18 . I have modified them a bit and added or removed certain sensitive information. I’ve included some templates that will help you with documentation of your solution. You’ve proven yourself to them and they won’t want that knowledge to walk out the door! Another tip during delivery… Keep busy with what they’re paying you for! Don’t surf the web. Once you get a contract with someone.Delivery This is what you’ve been waiting for. This will help you win future work with the client. you’re in. open/closed issues and future opportunities. I’ve been to client sites where they took apart computers after consultants left and found all kinds of stuff on them (pornography. I’ve had customers literally beg for me to stick around and found meaningless work for me to do while they looked for other projects for me. This is all pretty obvious. You will also have a tangible reference for when the project finishes. etc). Once you get on site and start the delivery phase. They will also serve as the record of what you accomplished with the client. Using these documents will show professionalism and attention to detail. Just be sure not to use that too much to your own advantage. or Software development Lifecycle) and are pretty much the de facto standard in the Software world – especially on large projects. talk to your friends on the phone. use your discretion. These will be part of your project and should be left behind after you leave so that the client can understand what you have done for them. Here’s an insider secret for you – once you’re in. and it’s not unethical as long as you don’t gouge your client or take advantage of them. they will want to keep you around. or use the client’s equipment for anything other than client work. so I’ll stop there. The reason for their behavior is simple – you now have insider expertise. keep referring back to the SOW to make sure you keep on schedule. stop doing it. That’s fine. This could lead to lawsuits and non-payment for your services. web site cookies. If you’re smart (and I know you are because you’re reading this!) you will have built a little bit of buffer into your SOW to make sure you don’t overextend yourself and allow yourself to make a bit more profit. If you really have to. Keep in the back of your mind “Would they be paying me $XXX per hour if they knew I was doing this?” If your answer is no. These templates are derived from a universal software methodology (the SDLC. Keep in mind that you are the expert and they are hiring you because they lack your expertise. other clients’ work products.

and the client really likes you. There are two avenues you can take. You may want to get the prospect on the phone with your last client so that they can hear about the work you’ve done – just be sure not to violate any non-disclosure agreements you may have signed. you can go out and find a new client leveraging your success at the last. I cannot stress enough how important references are in the consulting business. 19 . Whatever you do. you can go back to your client and determine if there is any followon work or services you can provide. As I mentioned in the previous section you should now have an inside champion to help you put it all together and upsell your success on the last engagement. The good news is once a client signs a CSA you don’t need to have them do that again.The Reference Assuming you successfully complete the project on time and on budget. it’s time to market that win. First. don’t burn any bridges. If so. Second. go back to the beginning and submit a new proposal and statement of work. You should include in your new proposal a description of the work you did at your last client so that the new prospect can more easily envision you working in their environment.

As a matter of fact. I highly recommend register. They can usually get you all setup for less than $500. She had a prospective client come visit for an afternoon meeting and the client said “It nice to see that your customers are paying you enough that you can afford all these nice surroundings. A note about transportation. that is fine. And also be sure to give me a call when you need extra help! ☺ 20 . If you’re opening up shop somewhere that will required you to drive to visit your clients. One of my colleagues got all setup in her new executive suite (rented office space shared with other businesses). You can go to Kinko’s and get 100 copies printed in color for about $20. Personally I drive a mid-sized SUV to and from my client sites. it’s time to setup basic business housekeeping. color copiers. She paid a fortune to keep up this image. Most people start out as a sole proprietorship and then change business entities as they grow. but then again I’m a Mac fan and some will say we’re strange. You will next need a business name and some basic tools of the trade: • A business phone number with an answering machine or service • Mobile phone with voicemail • A quality printer (preferably color) • Errors and omissions insurance (optional) • Business letterhead and invoice statements (hint: Excel has some nice Invoice templates!!!) • A website once your business is up and running • A business email address • Business cards with your contact information • A brochure detailing your business focus and skills This is a minimum list of needs just for starters.com. If you need to start a corporation. hot coffee. a limited corporation and a corporation.” Harsh. but if you drive that to the client site they will likely think they’re paying you too much. ☺ When you’re making a couple hundred thousand a year it’s tempting to go out and get that Porsche 911. Unfortunately we will not. I recommend it. If you are planning on working from home to begin with. a partnership. but have a nice little sporty number that I take out on weekends and after hours. go ahead and drive it to work. I recommend something that will not be too flashy. I personally can’t live without my Apple Powerbook.Housekeeping Once revenue begins to float in. As you grow and get more clients the quality of your brochures and business cards should increase. It was beautiful! She had a receptionist. If you’re lucky enough to be consulting in an industry where the parking lot is full of exotic cars. huh? There are multiple business types: a sole proprietorship. a mail department – all the amenities you would expect in a professional office environment. Your clients and prospects will take you more seriously if you present yourself professionally.

21 .Above all. try to maintain your level of professionalism in all client-facing situations.

you may be thinking. I was skimming through some of the chapters thinking. Then how I raised my rates over and over again. At this point.Sure Fire ways to earn over $200 per hour Over $200 per hour? Sounds impossible. I can’t promise that this information will be useful for you – I don’t know your skill set. I just want to relate what worked for me so that you can maybe apply these techniques to your own business.. That’s not to say these things aren’t useful. And I’ll prove it. your brand image. In fact I’m a complete cynic when it comes to believing extravagant claims from self-proclaimed gurus. doesn’t it? Or perhaps not impossible. Their claims can sound false. I want to believe what they say. that’s fine.” Not here. Because I’d expect you to be thinking that. I certainly would. my mental process when speaking to the client.. I won’t leave anything out. just unlikely. but there’s something deep down inside myself that just doesn’t click. right? Wrong! Your hourly rate doesn’t depend on your reputation. I would be a fool if I claimed otherwise. “Yes. Especially since you’re not the foremost expert in your field. what kind of consulting you plan to do. so I bought it. 22 . Let’s get started. of course I’d like to maximize my hourly rate but can I believe this guy?” If so. or your marketplace. The Simple Discovery that “woke me up” to Fixed Fee pricing One day I was reading an excellent book by Alan Weiss called “Million Dollar Consulting. too generalized or a little “muddy. your credentials or whether you have launched a thousand press releases or written umpteen books. This hit me like a ton of bricks. “Finally – someone has taken the consulting marketplace and applied some science to it!” Then I came across a chapter on pricing. how I structured “the deal” and the outcome.” The title was eye catching and I’d read some good reviews of it on amazon.com. I’ll give you real live examples of what I said.

This meant fixed fee pricing for a project. Hmmmm. It’s the companies’. • Clients might prefer us to do everything on an hourly rate. Fixed fees… Of course! This was a technique that I had used in my previous consulting life to make tons of money for my former employers – but I hadn’t yet applied it to our small practice! Now this wouldn’t have suited some of our work. I thought. The reason I hadn’t adopted this technique for our practice was simple.It said that you’d never earn much money if you charge an hourly rate. Makes sense. I decided to give it a go and try to make it work. Our First Fixed-Fee Engagement A fried referred me to a potential client that was looking to expand their IT infrastructure and needed a “roadmap” to get them from where they were to where they needed to be. as we had already established good relationships with existing clients at comfortable hourly rates. Something companies strive to avoid. Hourly rates result in an open-ended agreement and this exposes them to project overruns. so surely they would think the same? As it transpired. However. THIS was the reality: • Quoting by the project helps a company decide how it fits into their budget. • Companies are used to dealing with larger numbers. We had a meeting and they were comfortable with us performing an assessment to determine the overall cost of the initiative. • The prices we were quoting seemed like a lot of money to us. It went on to say that you only have a limited number of hours in the day. I know it helped me and I hope it will help you. 23 . Additionally. it did open the door to a different pricing structure for new clients or smaller engagements. so their perspective is different to yours or mine. it seems less than quoting some big sum of money for the whole project. I had to come to terms with the following issues: • When we quote by the hour. • Quoting a fixed price limits their financial risk. I was afraid of losing business. so an hourly rate must be shelved where possible. What follows is a discussion of my experiences using this new pricing methodology. most of the time it’s not the employee’s money that is being spent.

000/184 = ~$424 Divided by 2 consultants… $212 dollars per hour! Not bad. these two consultants worked well together .000 I quoted an even $80. And we didn’t do anything differently. 2. Using the internet to search for answers or posting to forums. 4.We ended up with an estimate of 2 people for 5 weeks. The result? No problems. If we had worked at an hourly rate (or daily rate). Let’s calculate the “earned” rate: 23 days x 8 hours/day = 184 hours $78. Quoting a price that adds some buffer to your estimated project length. so we already had much of the documentation we needed. we would have earned a blended rate of $180/hour per consultant for 23 days or: $180/hour x184 hours x 2 consultants = $66.880. Since this was a high visibility project we needed to use our best resources. we ended up doing a lot of research to come upto-speed. We wanted to earn additional business from this client. As part of the Statement of Work. Since we were working against the clock and didn’t understand 100% of their environment. no delay.and quickly. I’ll say. Fixed fees need fixed scope. 2880 (rate/day) x 25 days = $72. Luckily.240.000. Using in-house time saving procedures that cut development time. If you do have a project over-run. one junior) was $180 each. 5. Our blended hourly rate for 2 consultants (one senior. Wow! This was a revelation. you will still get decent hourly rates. 24 . fast completion. The client negotiated me down to $78. We placed two of our best consultants on the engagement and they had been working well together for 6 months. What factors went into this project earning us so much? 1. 3. we outlined exactly what we planned to provide and stated that any additional work outside of the SOW would be quoted on a time and materials basis. Working fast. We had done some similar engagements for other customers. This is a form of insurance that covers you for unforeseen difficulties. The assessment took us 23 days from start to finish.000. making the daily rate $2. A fast solution is to pick the brains of others.

Maybe my competitor had already quoted a price in that region. “We don’t really know. but we were able to convey the message that we were the firm to choose.120. with no help from internal procedures or projects. we tried to scope the project realistically assuming the resources we wanted to use would be available. over $3. despite the competition. to be revised after more indepth discussion if they decided to use us. The momentum has fallen your way and they are increasingly unlikely to change their mind. that’s it. provided a list of references. We had another (3 hour) meeting and it transpired that some of the details were left out of the original discussion. there were two left: us and the other guy. After our meetings. So we had to adjust the price accordingly. 7. 25 . We would like to spend under $25. My revised price was $28. “How much is in your budget for this project?” They said. It’s strange. There were at least 3 other firms competing for the business. We gave them a rough quote of $26. but not a lot.000 more than their “maximum” budget. They gave us the immediate go ahead. I asked my usual question. mind taxing meetings again. Our presentation wasn’t the best. once someone has decided to work with you.” Wow! They actually told me. They signed within 2 weeks. We have money for consulting. and get on with fighting fires in their business. and worked the relationship angle (since we had worked with them in the past). They just pay the extra. without resistance. Quoting a price that assumes you are developing everything from scratch.200. we just need it done. The project took us about 115 hours. They don’t want to agonize again over who to choose and have to have all those complicated.000.6. if it arises. Before long. Another Fixed-Price example One of my partners brought me in to work on a sales campaign to gain some new business. I discussed their needs and established that it was a competitive bid. Helping the client believe this is a realistic price for such a project.

• If you are stuck on something. Fixed fee pricing Avoid an hourly or daily rate when doing project work. There are many ways to slash project times. It makes you look successful and reduces their negotiating power on price. They include: • Improving your skill set. So act busy. • Create in-house procedures to cut project (and admin) time.That’s $245 per hour.” Sprinkle your conversation with comments such as “We’re so busy at the moment” or “This is the busiest month we’ve had since we started” or “We’re getting so much work in at the moment we’re having difficulty finding the time to employ more skilled staff. Perhaps I’m stating the obvious but it’s a simple fact. Or search on the internet. This is pretty self explanatory and I’ve discussed this in detail already. Chances are someone. Speed of Execution Halve the time it takes you to do a job and you double your hourly rate.” 26 . because they will think “They are so busy they may not want to take on my project if I quibble on price. Create a knowledge repository of pervious client deliverables. seek help from others using discussion forums. A low skilled consultant may take 5 times longer than a highly skilled pro. somewhere has run into the same issue you are dealing with and they may have an easy solution/workaround. Create a library of ready-to-use templates and so on. The Formula for Success Here’s the simple formula for earning over $200 per hour: Fixed Fee Pricing x Speed of Execution x Perceived Demand x Time Constraint x Customer Service I’ve broken down each element below. There is that big a difference. Perceived Demand People want to deal with people who are busy.

Need a website? Quote for the entire project.” Alternatively. Forget an hourly rate. They decide. Exceed their expectations. but if you sign before then perhaps we can assign him/her to your project instead.” This ties in nicely with the “busy” comments mentioned under Perceived Demand. Software development? Fixed price. look very carefully. We have quite a other projects in the pipeline and we want to make sure we prioritize your project accordingly. And so on. But when you are dealing with a business. Step #2: Improve your Perceived Demand Are you giving off the impression of being busy? Invent 10 ways to make clients believe you are the busiest consultant around. He/She’s scheduled to go out to another customer next week. often before being hit with a price. this may be a little early for you. The 5 Step Action Plan to Earning Over $200 per hour Step #1: Decide what type of work suits a fixed pricing structure If you are just training home users. that you are the person for the job. Time Constraint Apply subtle pressure to get them to sign quickly. “One hundred dollars and the job is done. I use phrases such as “If you want us to do this work we really need to know quickly. You won’t earn enough. It sets the stage for successful negotiation. Use these simple techniques for starters: 27 . you could use something like “We’ve got a great consultant that would be perfect for this project. Customer Service Respond to client requests as fast as possible.Do this before you even get close to discussing price. So many companies fail to deliver that you’ll get noticed when you offer outrageously good customer service.” It may only take you half an hour but they don’t know that until it is done. They want a technical support hardware installation? Quote a fixed fee. The result? They want to deal with you and you alone.

knowing they can't start until at least two weeks out. Take into consideration factors such as • • • How quickly you return phone calls and email How easy is it for your Clients to get in touch with you? How you manage your time effectively Once rated. Step #5: Improve on your current level of Customer Service. and keep it free for selfstudy. Before you start applying these techniques. Next. Don’t act as though you are about to go under if you don’t get the business. creates an action plan to improve on each area.Every bit of work that comes in. Block out time in your schedule now for the next three months. Step #3: Speed of Execution Create an educational program to transform your skills. Desperation is a big turn off. such as Macro Express. Step #4: Develop your Time Constraints Make up a list of 10 time constraints you can use to apply pressure to your clients. The cumulative effect will impress clients. If I said to a client. "Give us the go ahead today or it will be another three weeks before we can start". you must fully understand the client’s situation. make it seem as though you are trying to slot it in with a lot of other business. think up 5 ways to cut your project work time – even if it only involves using a macro program to cut down on keystrokes. Don't shoot yourself in the foot by overstating your claims or by applying too much pressure. then you have a problem. 28 .

Don’t let this happen to you. You need to know how much cash you need to keep your business going. 29 . and definitely don’t make it a habit. once (or twice) a month. Cash Flow Last but not least. After you get a feel for what you can make. keep meticulous records of your activities and make sure you get a signed statement from your client confirming them. but my sample business plan has $30. I would be remiss if I didn’t point out some of the most common failures in the consulting business. By holding fast to your professional appearance and standards. I don’t know your personal situation. Then. Most people hate to ask for money. If you see this happening. Let’s face it. Not to mention the Statement of Work and CSA will already have all this stipulated! Billing Not Meeting Deadlines Another problem comes when you are unable to meet a deadline for some reason or another. You need to document every hour you work. send them an invoice along with copies of the signed statement. and part of doing business. You may even have to (gasp) do some free work to make sure you get anything at all. alert your client as soon as possible. I hope that isn’t the case in your situation. is cash flow. Most business fail because they don’t have enough cash to fund daily operations.Failure is not an option – usually Failure is often just one more step you have to complete before you’re successful. By doing this up front you will be sure that you get paid and you can halt any projects for a client who has a problem with your work. Some business experts say you need at least three months of funds to get a business going. and billing them monthly or bi-weekly. If you are starting while you still have a full-time job then you likely won’t have these cash flow pressures that you would have if you went out on your own immediately. This happens to all of us at some point. As an ongoing measure I personally keep at least 10% of my billings as a backup precaution for any unforeseen circumstances. You should think of these failures as items you should constantly be revisiting to make sure you don’t make them yourself. but it is something you will have to learn to deal with. However. And most consultants hate to deal with any extra paperwork. and I hope that I’ve given you enough tools to avoid the pitfalls. your client will know that you mean business and that your work does have value. Experience shows that clients have no problem trying to put off paying you if they think they can get away with it. This is part of the real world. others say you need six months of cash in the bank.000 built in which should supply a small consulting practice with 3 months of cash flow (depending on location and your level of frugality). It isn’t always your fault. you can decide how much cash you need in the bank before you break out on your own. The tools I provide will help.

30 . I know it sounds mean. a Statement of Work should do the trick. Through networking you will gain an understanding of who has power and who doesn’t.Tips & Tricks to ask prospects to let me do an assessment. Usually you won’t need a proposal or CSA for an assessment. work it! Try hard to understand the organization and its structure. and make yourself indispensable. but it really is extremely important. If you do an assessment try to get it to be paid so that they have a stake in the results. It also helps break your engagements into smaller pieces and increase the chances of follow-on work. An assessment can be as easy as a couple hours’ work discussing customer requirements with stakeholders or as elaborate as a few days or a week of working with the stakeholders to design a solution that you will then turn around and provide to them for a fee. and also include the results in your formal proposal. Assessments – One trick that I’ve been using very successfully lately is Networking – Once you get in the door. but no matter how much you like the others you MUST align yourself with someone powerful enough to be your champion. This is paramount to the survival of your business and your financial well being. build rapport with your counterparts and their managers. This ultimately leads to more follow on work as well as a sense of loss when you leave. Internal Champions – I don’t want to harp on this. I’ve seen so many projects go south because a consultant was aligned with the wrong internal champion. You can negotiate whether this will be paid or unpaid.

Typically these people are well connected and can put you in touch with clients in your area. I’ve pulled email addresses from Oracle’s web forums (http://otn. I’ve used these to make cold calls and send generic proposals. Always be looking for your next gig.com. do some searches to see if anyone is saying anything that might lead to a proposal. with the explosion of instant messengers and blogs. Finally. Since I specialize in Oracle software. just don’t do it from your current client’s office! 31 . Get in contact with the people you see posting a lot of messages.oracle. Go to google groups and search for your areas of expertise.oracle. You don’t want or need to sound desperate. http://appsnet.com ) as well as Yahoo! Groups (search for ‘oracle’ – there’s a ton although many don’t have much activity). and have had incredible success with it.Fresh Leads Use your internal network and friends to stay on top of trends and other potential clients. Be sure not to post a personal want ad out there.

download. my favorite tools are of the technical variety My favorites: WinVI (vi emulator) Fink – a package manager for Darwin Wget – scrapes information from websites and stores it locally WinZip – file compression dbXpert – Oracle database management ScriptRunner – run multiple scripts against a database 32 .gnu.Tools There’s a ton of freeware. shareware and open source tools that will help you in the delivery of your projects. and http://www.com (for shareware and freeware). The best places to go to find them are http://www.net or ftp://sunsite. http://www. Since I’m a techie.sourceforge.dk for open source.org.

but it can be hard work and has some pitfalls. My list goes something like this: • • • • • Are there any problems I need to address with my current clients? Do I need to make and sales calls or visits this week? Are there any critical lunch or dinner meetings I need to schedule in? How is the cash flow forecast for this week and the next month? What deliverables and/or milestones to I need to prepare for this week and next? Good Luck with it all and Happy Selling! 33 .A Big Step I’ve encapsulated 12 years of my personal experience in this document. The best way to avoid these pitfalls is to set aside some time weekly to review what you need and have planned for the next two weeks. It’s definitely a way to become selfemployed and make a good income. This can be a lucrative business.

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