Companies are like Dungeons and Dragons characters. While it’d be awesome roll perfect 18s for all of your attributes, but the reality is that you’re not going to be strong AND wise AND charismatic.
You’re going to have to make some tough decisions. You’ve only got so many hours in the day, and only so much resources at your disposal.
What’s your product? When I first got started consulting, I thought the product was just me, full stop. I’m here – I’m a smart fella – what do you need done? That doesn’t scale well, though – it’s hard to describe yourself to new customers over and over, and it’s hard to know when a product is “done.” Businesses like finish lines and milestones because they don’t like to pay until after they cross one.
What pains does your product solve? People buy things to make pains go away. For example, someone might be struggling to make a query go fast, and their business users are beating them about the head. They want the pain to stop as quickly as possible. This helps define the product – your product starts when they hand you the query, and stops when the query runs X% faster, and the business users raise their hands in joy.
Who’s signing on the dotted line? The more you know your customer, the more specific you can get with their pain points. “A manager” or “a developer” isn’t going to cut it. One of my customer profiles is a software vendor that uses SQL Server as a repository. I can tell you all about ISV developer architects – what pains they face, what business pressures they’re under, what their developers are complaining about, you name it. When one of them calls me, the deal is done by the end of the call because I know them so well already. However, there’s not a lot of them, which leads to the next question.
How many do you need to sell to break even? In consulting, I consider “breaking even” to be making the same as you’d make as a full time employee somewhere. Do you need to sign one client per week, per month, or per quarter?
Is your product small or large? When someone signs on the dotted line, is the average bill $50, $500, $5k, $50k, or $500k? For any given transaction, there’s a certain amount of bookkeeping overhead, so small products absolutely require automation. You can’t deal with manual contracts, invoices, and payments at the $50-$500 level. As the transactions get larger, people expect more personal hand-holding, and the sales cycle also gets longer. $50-$500 purchases are impulse buys, but $50k-$500k purchases require multiple in-person meetings leading up to the sale, and they’re not going to be billable.
How are you going to get people to contact you? Whether you’re dealing with a lot of small product sales or one big sale per quarter, you’re going to need leads. This is by far the toughest thing in independent consulting.
In the beginning, you can reach out to your network – everyone you’ve ever worked for or with – and drum up enough business to pay the rent. (If you can’t name at least five people in your network who would hire you as a consultant, then independent consulting isn’t for you.)
While you’re working with them on projects, though, you have to be generating leads for your next round of gigs. This is where blogging, presenting, and marketing come in. You can subcontract that stuff out, but you can never ever stop.
Well, rather, you CAN stop marketing yourself, and you’ll be okay short term – but you’ll be screwed in a year, and you’ll be right back to taking a full time employment gig with a company.
There’s absolutely nothing wrong with being a full time employee. Every day, Jeremiah, Kendra, and I put in a ton of unpaid hours, juggling a bunch of balls in the air, trying to keep the business flying along. If we juggle hard enough, we’ll do well financially later – but there’s a ton of risk, and there’s no guarantees.
If you don’t like this kind of juggling, find the kind of company that will let you stay technical, and keep doing the things you love. We see that as the biggest service we can provide our employees – I don’t ever want Jes to have to deal with closing a sale or negotiating a customer contract. We want her to be able to show up, slap her hands together, and say, “Alright, where’s this boisterous SQL Server?” And then when her day is done, we want her to close the computer down, walk away, and not answer emails or worry about anything until the next morning.
We know we make less money doing that. We’d make more if we worked our employees like horses, whipping them on faster and faster to bill more hours. That’s a conscious decision we made while building the company, and it’s what keeps us excited. We’ll keep playing with the other business knobs, but we won’t touch the one marked “Employee Hours Per Week.” There’s too many other fun variables to play with.
Oh, and by the way – we’re hiring again.