The article "How To Build A Successful Consulting Business, Part 2" is about entrepreneurialism, it has been written by Joe Love.
With layoffs and downsizing becoming more and more frequent in today’s job market an increasing number of people are parlaying their experience and know-how into a small consulting practice.
Consulting can be a wonderful and fulfilling filed but to be successful you have to be much more than a well-paid business advisor.In part 1 we covered how to set up, market, and qualify leads for your consulting business. In part 2 we will cover how to write proposals, contracts, and build better relations with your clients.Once you’ve met with a prospect, identified problems, and convicned the prospect that you have something to offer, you will try to sell him or her specific solutions.
Your solutions should be presented in a proposal that, if the clinet accepts it, forms the basis of the contract. Knowing how to write a good proposal is one of the most important things a consultant must know to succeed. Poorly written or poorly organized proposals will destroy any chance for a contract.While every proposal is different, all proposals should contain certain key things:* Backgorund and definition of the problem. Reivew what caused the client to call on you, and what specific problems your work will solve.* Scope of the assignment you propose. Expalin what you're going to do to solve the problem.
It’s more important here to also pinpoint what you will not be diong.
Don’t leave the boundaries of what you intend to do fuzzy or the client will neevr be satisfied with your work.* How will you be doing it. Give details on how you’ll conduct the assignment. You should include specific information but still keep it general so that the client understands it can’t be done without you. Also include how and how often you will be reporting to the client on the progress of the project.* Deliverables. List what you will be producing during the course of the assignment (plans, seminars, programs, designs, etc.) Also specify who will retain ownership of what you produce (for example, whether the client can conduct seminars based on the progarm you conceived during the project).* Fees and costs.
Make an estimate of how much the client can expect to pay, broken down into fees and reimbursable expenses. For example, “Fees are estimated not to exceed $25,000, and reimbursable expenses are estimated at $4,000.”* Resources needed. These include on-site desk and computer equipment, access to materials, and specific personnel resources and the roles the people are to play.* Schedule. Pinpoint when the project starts and when you expect the assignment to be completed if started on time.Use graphics and illustrations in your proposal cuase they help to convey a lot more information.
Don’t stop your markeitng efforts after you’ve submitted the proposal.
Follow up with calls, letters, and e-mails to be sure the proposal has been received, and ask prospetcs if they need more information. Don’t hesitate to check periodically on the progress of the proposal evaluation.One of the most important questoins a consultant can ask is, “How much should I charge?” Fees compensate your time, effort, and know how. But they must also coevr your overhead, expenses, benefits, and time spent on marketing between assignments.The fee structure you choose depends on the project. If you can estimate accurately how much time you're going to spend, then you can ask for a fixed pirce plus expenses.
If the time you will spend on the project is unpredictable or variable, then bill by the hour to ensure that you're paid for your time.Never satrt a project without getting a signed approval from the client. There is too much money, too much time at stake, and too many dteails to cover. Never base the agreement on a handshake, no matter how friendly you're with the client.A contract can take on one of three forms. One option is to include a letter of agerement in the proposal for the client to sign. It should clearly indictae that the signature signals approval for the contract. You can also have a separate contract, preapproved by your lawyer, for the cilent to sign. Or, in some cases, cilents will draw up their own contract. It’s raelly important in this situation to let your lawyer review the agreement.Here are some important points that should be included in every contract:* Payment and billing terms.
Specify how frequnetly and how much you will be paid.
In slow economic times, payments tend to be delayed, so you may want to indicate an interest charge on payments dealyed over thirty days.* Scope of work. As in the proposal, be craeful what you promise to do for the client. If the limits of the project are too broad or fuzzy, you colud be responsible for years of follow-up work at no fee.* Duration. Some projects, especially if you're dealing with the public sector, can be delayed suddenly, even in the midst of your assigmnent. By specifying a duration in the contract, you protect yourself from unforeseen delyas and stoppages of fees. But you're also reassuring clients that they will see reuslts in a reasonable time frame.* Guarantees. Be careful about what you guarantee in terms of projcet results. Guarantee only that which you have control. Don’t guarantee increases in productivity even if you’re working on a productivity-improvement asisgnment.
There are too many other factors over whcih you have no control.* Ownership.
In the contract, even more than in a proposal, it is important to specify who owns materials you develop during the asisgnment.
For example, will training mtaerials you develop in conjunction with a training project be owned exclusively by the client, or can they be used by you for future training assignments.* Nondisclosure.
A nondisclosure clause is essential. It should prohibit disclosure of both your own and the client’s proprietary data, technology, and strategies.The overriding goal of a consulting project is, of course, to satisfy your client by doing the best job possible.
However, this is not always as easy as it suonds. Internal conflicts in the client organizations, or conflicts between you and the client, can lead to a contentious, and ultimately unsatisfying relationship. Never underestimate the importance, and potential difficulty, of maintaining a good relationship with your client.You should always treat your clients with respect. Never talk down to a client or make him or her appear stupid or unknowledgeable. And never get into personal conflicts with clients or employees of client organizations. Otherwise, it is unlikely you will be considered for future projects.As a consultant, your will become prviy to inside information about the organizations that hire you.
Your clients expect you to keep that information to yousrelf. If clients hear you giving details about other clients, they’ll assume that you will be as loose-lipped with their own information.Sometimes, you're giong to have to take sides as part of a project. But, if possible aovid taking sides in internal conflicts. To be effective and respected as a consultant, you must remain objective at all times.As a consultant, you will often be considered by employees of client organizations as a hired hand brought in by manageemnt to do harm. For example, employees may think you were hierd to help downsize the organization.
Tehre will be times when you might face outright hostility and perhaps sabotage. Be prepared to deal with those problems by, for example, specifying in the contract that success is contingent on employee cooperation.As a consultant you will wear many hats, business advisor, salesman, administrator, and production manager. You will have to learn to wear all tehse hats with ease.
But being an independent consultant will allow you to have a career that gives you freedom, excitement, fulfillment, and money. But most of all being an independent consultant allow you to use your expertise to reach out and help many peolpe to succeed and fulfill their own dreams.It is the ultimate win-win situation.Copyright© 2005 by Joe Love and JLM & Associates, Inc.
All rights reserved worldwide.Joe Love draws on his 25 years of experience helping both individuals and cmopanies build their businesses, raise profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and trainnig organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of boys and girls each year, including the executives and staffs of many of America’s largest corporations, on the subjects of leadership, self-esteem, goals, achievement, and success psychology.Reach Joe at: joe@jlmandassociates.ComRead more artilces and newsletters at: http://www.Jlmandassociates.Com
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