Eight months ago I lost my job. It was, in retrospect, something I should have seen coming. I was managing marketing for a highly seasonal website (blackfriday.com) where the owner/CEO didn’t really believe in spending a lot of people resources or money on marketing. Although I had learned a lot about parts of the online world I didn’t know about previously I was coming to a place where there was little new for me to learn and no real potential for advancement. Regardless, we can get comfortable in a good paying job with good benefits and where we like the people we work with. I didn’t really see it coming, or didn’t want to.
So, I was out on my own. What was I going to do now? Look for another job? Great senior online marketing jobs are few and far between in Vancouver, BC and I wasn’t willing to move. I had already turned down some great offers elsewhere. I could look for an SEO only position in Vancouver, but those don’t pay so well. Hmmmm. I had done some consulting on the side for a few years at both of my last in-house jobs. Could I do this full time?
I decided to dive in to consulting after a brief period of unemployment and enjoying not going to the office every day (a 1 ½ hour commute each way). These are some of my random thoughts and tips on what to think about before you get started. If you have the choice to time when you start consulting, work on this stuff first and your launch will go a lot smoother.
If this is tl;dr at least skim the headings!
Ease Yourself into It
If you can manage it, get yourself a client or two BEFORE you leave your day job. It will ease the financial worry of “Yikes, I now have $0 income. How do I pay my mortgage? Do I need to take anything that comes along that pays?”
Trick Your Body & Mind into Thinking You Are Still Working a Day Job
This one was a weird one that I hadn’t expected. After 20 years of getting up, showering, driving/taking the train to work, and walking up to the actual office I had conditioned myself to that morning routine. It was a gradual transition into work mode. I even found myself mentally preparing myself to be “work” Rob as I approached the office. Going abruptly from that to rolling out of bed, grabbing a coffee, and walking 40’ to the office didn’t let me mentally change into work mode. At first I still had to get up, get showered and dressed in work clothes, leave the house (even just to walk around the block), and come back in straight to the office (my den) to get ready to work. Now of course I have slowly moved to the ability to do the work-at-home thing of occasionally wearing sweats all day, not shaving for three days, and showering sometime before dinner.
Do Not Over-promise
You will want to do this. I struggled with this and still do. Be pessimistic about timelines. You’ll want to promise everyone the moon and the stars. These are new customers you are getting and you need them to pay your bills so you’ll want to bend over backwards for them. Until you are really confident in your ability to produce work, unde-rpromise. Otherwise you’ll end up working days, nights, weekends, holidays, and still breaking your promises.
Don’t Overestimate Your Productivity
Similar to “Do Not Over-promise”. Be realistic with yourself about how much you can get done. If you aren’t used to working at home, there will be distractions. There are also the thousand other things that need to get done to start running a business, setting up bank accounts and invoicing, getting an accountant, buying your own laptop, setting up the place you will work, buying office supplies, etc. All of these things take away from that eight hours you thought you could work today.
Reach Out To Your Contacts
This is a biggie. The first step is of course having contacts. If you are a comfy inhouse marketer and you think you don’t really need to network, think again. If you needed a reason to go to conferences, offer others help with no quid pro quo, participate in social media, go to meetups and “hang out” on Google, this is it. Unless you have an ironclad marketing plan and a budget to go with it most of your new clients are going to come from referrals.
So far with one possible exception ALL of my clients (and there are some pretty damn good ones) have come from some awesome industry folks who were either too busy or not the best fit for a given client. You do have to actually let your contacts know you are looking however. Use social, email, phone, DMs, PMs, etc. to let people know you are looking, what your strengths are, and what you see as the best clients for you. By the same token, when you get leads that aren’t right for you, keep the karma flowing by passing them along.
You are going to get disappointed, worried, depressed, scared, and possibly even lonely. You no longer have a support system at work. You have no one to ask for advice or share the blame/glory. You may even be going from a fun, collegial, community work atmosphere to working all day by yourself in a private office (or your kitchen). Find ways to keep your goals in mind, to interact with people, and to relax. Take a walk. Get a massage. Find somewhere to co-work. Have a glass of wine (you can do that now, you work for yourself).
Have a Slush Fund / Be Patient
If you are good at what you do and you have a great network, the work will come but it might not come at first. You are going to have some lean months, especially at the start. Have enough set aside, if you can manage it to pay all your bills for three months. If you get a few contracts that reserve will start stretching to four, six, etc. months. Having this fund and knowing it’s for building your business will allow you to feel less stressed, spend more time on building the business, and help prevent rash decisions like taking on clients/contracts you shouldn’t.
Don’t Take Small Clients Unless You Really Have To
This may sound a bit harsh but small clients take just as much work (or more) than big clients. It may not seem like this makes sense, but it’s true. That client that can only pay you a grand per month is going to have all the same questions, needs, and difficulties as the one who can pay you five grand. When you are starting out you will want to take the small ones to get things rolling. Do it if you have to, but try to quote on a limited time engagement. Ask yourself – if I had enough of this kind of client to pay my bills, would I be happy with that, or would I be working 100 hours per week?
Take Clients Who Already Know Something (If You Can)
This can be a tough one. Clients who really know nothing about the area you are consulting for are the ones who likely need you most, but they are also a LOT more work. Whether they just don’t understand, or are eager to learn, they are going to take a ton more of your time teaching, and less actually doing, unless of course training and teaching is what you offer. If a client already knows the basics you can spend less time explaining definitions and why you are doing something and just get down to the business of getting results. They are also a lot more likely to be able to actually implement your recommendations.
This is one where I failed. Find out what others charge who have your level of ability. You might want to start a bit below them but don’t drop your drawers on price. At first you may be tempted to take that contract at a low price to get things started. You’ll end up regretting it and resenting the time you spend on it compared to the contracts that pay you twice as much.
Admit Where Your Talents Don’t Lie
If you are really good at SEO, don’t take PPC work. If you are really good at content creation, don’t take on a link building contract. The work will come. Stick to what you can be awesome at (and get great reviews for and referrals from). Don’t try to stretch into something you are “just OK” at just to get a paycheck.
You WILL Be Interrupted
(8 hours working never = 8 hours of billing) If you are billing by the hour, never start the day thinking I’m going to work for 8 hours and that will fulfill the 8 hours of work for this contract. The phone rings, someone pings you on Skype, the dog needs a walk, fifteen emails come in that need an answer. I’d estimate that initially you’ll be working 4-6 hours for every one you can bill to a client. After 2-3 months I was more like 1:1 and now I’m probably billing a 2-3 of hours of client work for every hour of “something” else.
Don’t Get Distracted Until You Are Established
Experienced consultants with a good client base and a feel for how much they can get accomplished in a day are the ones you see tweeting that they are going to the beach for the afternoon, working at the coffee shop, taking a break to mow the lawn, or cook up a five course meal in the middle of the day. There will be a ton of things you can do because you now work for yourself but in this phase should you be doing those, or focusing on building your consultancy? The lawn can always get mowed later. Or tomorrow.
Set Up Your Systems and Forms
You are going to need a ton of things that you don’t have: a quote form, an invoice form, an audit template, a how-to guide, etc. These are going to take time to set up. Remember above where you are working 4-6 hours for every 1 you can bill the client? This is why. If you have the option take the time to get all this set up before you start focusing on client work.
There are lots of good web services that can help make your life easier, more portable, and more device agnostic. Some of my favorites are:
QuoteRoller: QuoteRoller is a great web app which allows you to create quote templates and track the success of your quotes. It’s great for cutting down the amount of time you use creating new quotes and integrates with a bunch of other services, including FreshBooks (below). With FreshBooks you can push a client from QuoteRoller straight into the FreshBooks system and instantly turn a quote into an invoice. (Hat tip to Rhea for the heads up on this one).
FreshBooks: FreshBooks is a great cloud based app for doing all of your small business accounting and invoicing. I really like the ability to track time spent per project/client and with one click turn all outstanding hours worked into an invoice. It also does automated invoicing for recurring engagements. Freshbooks also has a full suite of mobile apps so you can do your billing and accounting on the run.
Evernote: I really like Evernote for capturing all of my notes about a client in one place. It can do a ton of other stuff but having one central location where you put all your contacts, info, links, to dos, notes, etc. for one client so you know where to look for it or search for it is a godsend when you have multiple clients. This also has both web and mobile apps.
Trello: This is a great web and mobile app for project management. It has a really easy to use interface, it’s free, and you can grant clients various levels of access to each project.
Odesk: Odesk is a great place to outsource labor intensive tasks like web research or cleansing and organizing data. I’ve used them quite a bit and am actually using them for some virtual assistant tasks as well.
Web Banking / Mobile Banking: You are going to be super busy setting up your business so you don’t want to be wasting time running to the bank constantly. Get web and mobile banking set up so it’s easy to pay bills, transfer payments to your account, move money around, etc. Get one, if you can, with the ability to photograph and deposit checks remotely to save running to the bank each time a client pays you.
LastPass: I never thought I’d need a password saving app until I realized that because I have numerous clients, I know not only have a ton of apps I use to manage them, I also have several Google accounts to log in and out of, several CMS systems, a bunch of blogs and social accounts, different analytics programs, affiliate programs, AdWords, AdSense, and so on, and so on. Save yourself what totals to HOURS of looking up passwords and get a password saving app like this (thanks to Michael Gray for the tip on this one).
Talk To Your Accountant
Find out what kind of company structure makes the most sense for you. Figure out how much you need to set aside to pay your taxes and actually set that aside in a separate account. Don’t touch it unless you are starving. Find out what you can write off as a deduction and track that through the year. Keep a running total of your expenses, don’t wait for next April to figure it out. Keep projections of how much you think your total income and expenses will be for the year. Enter those in a tax return prep software and update from time to time. Do you still have enough set aside?
Talk To Your Banker
Figure out what accounts you need. Do they need to be separate from your personal accounts? Can you access them via the web and mobile apps? Now that you are on your own how much do you need to set aside for your retirement? Get all the info for your bank accounts so customers can pay via direct deposit or electronic transfer if possible. Trust me on this last one, you can use Paypal but they take 3% or so off the top for transferring money to your bank. That doesn’t seem like much but if you bill $60,000 this year they are taking $1800 of the top. Keep as much of that in your pocket as you can.
Know Your Expenses and Bill Accordingly
You are going to have costs that you didn’t have working inhouse. Health insurance, retirement savings, disability insurance, that $99 / month Moz membership work used to pay for, that conference they used to send you to. SEO tools alone cost me over $500/mo that I wasn’t spending before. Don’t forget about those paid vacations you don’t get anymore. Want to take a vacation? That’s time you aren’t able to bill. Do you skip vacations or do you have enough set aside you can afford not to bill for a week or two? My rule is that you need to bill the same per hour, if you are billing 40 hours/week, as you used to make inhouse in $1000s. Used to make $80,000? You need to bill at least $80 at 40 hours/week x 50 weeks to have about the same lifestyle. Want to only work 20 hours / week? You now need to bill $160 / hour.
Have a New Client Onboarding Package
Have everything you need to start working with the client ready to go. Include any questions on the background and history of what they and/or other consultants have done in the past. Ask for the access you need and explain how they go about granting it. Include your payment routing info. Ask for contact info for anyone you need to deal with. Getting this information piecemeal can be a “death of a thousand cuts” to your productivity every time you have to ask for it, wait, get it (maybe), ask for the next.
For example for an SEO consultant this may be:
- History of the site including former vendors, consultants, rebulilds, redirects, etc.
- Access to Google and Bing Webmaster Tools
- Access to analytics
- Admin access to social media accounts
- Access to other reporting tools or project management tools
- Contact info for the hosting company, development team or vendor, writers, social media interns, web designers, etc.
Don’t Split Your Time
If you have several clients stopping and starting work for different projects can eat up a ton of time. It takes your brain a while to change gears, especially if you are used to focusing on a single project at a time inhouse. Work full days on a single project if you can. If you are working about 20 hours / month with a client don’t make it one hour per day every day. Compact it into three full days, or five half days. Set the expectation with the client that you won’t be working on their stuff every single day, unless they are your only client.
Set Expectations for Working Hours
If you answer client calls or emails in the evening and on weekends they will EXPECT you to be available evenings and weekends. Set the standards early. Let them know that outside of emergencies you work 8 am – 5 pm, Mon – Fri. Let them know you look at email two or three times per day and it may take several hours for you to respond. If you need to work outside those hours (and who doesn’t occasionally) schedule emails you write in the evening to send at open of business tomorrow or those you send on Sunday to go out Monday. Many mail clients have a scheduling feature. If you use Gmail checkout the Boomerang plugin for this.
Think About Finding A Partner
Working alone is tough. There’s no one to bounce ideas off of, no one to offer an alternate opinion, and the only skill set the business has is yours. A partner can help by complimenting your skill set and by sharing some of the stress and uncertainty. Now, of course, with a partner you also have less autonomy and you need to find twice as many clients. If you are good at doing the actual work and not lead gen find someone who is the reverse. Hate to travel and speak at conferences? Maybe you can find a partner who loves it. Suck at bookkeeping? Maybe they are great with numbers.
The other thing that can be tough working on your own is the solitude. If you can’t work in a noisy environment and need a quiet place you may find yourself locked in a room, by yourself, interacting with no one you aren’t actually related to, for days on end. Having a partner around can alleviate that without having to actually work at the local coffee house.
Be Prepared for Travel
This is one I didn’t really expect but a lot of clients seem to want to meet you in person or have you work inhouse for a few days, meet the team, etc. First, set the expectation as to whether you can travel or not. If you are a single parent with no support system let clients know as part of the quote that travel is not an option. Second, agree on the ground rules for who covers what expenses. Do they cover air, hotel, parking at the airport, food, taxis, car rentals, etc. Be clear about this before you book your travel. Third, set the expectation that if you travel, that’s a part of your work for them. If you have to spend 8 hours in airports and on planes that counts as you working for a day because you can’t work effectively for other clients as you travel. Last, be realistic about how much work for other clients you can get done while you travel.
It’s great to plan to work in the evenings until the client invites you put for dinner and drinks or you realize you are burnt out after working 10 hours that day with the client already (he says as he writes this post a week late, at 38,000 feet, on a plane between Dallas and Vancouver after being on the road 9 of the last 11 days).
Get Paid With Money
This may seem obvious but I’ve had several offers to work for equity, or to work for a share of future profits, or a share of profits if we can just get this site out of the penalty. Don’t do it. You may be tempted. You’re just starting out so you aren’t that busy. You need anything you can get because you don’t have a lot of contracts yet. You know someone who worked for equity and made out like a bandit. Just say no. These deals rarely work out and if they do it’s at some time far in the future. You are going to dump a ton of time on these projects that you could have spent doing the things to attract new clients with real actual money.
Trust Your Gut
Overall if there is one thing that I’ve learned so far it’s that if you have doubts about a deal, if it just somehow feels like it’s not the right fit for you, that it could go sideways, that it’s going to be more a pain than it’s worth, trust your gut instinct. You’ll be right far more than you are wrong. Take the projects that are right, that are with quality clients, and not just the ones that will pay your bills because you are scared something else won’t come along. Don’t settle.
There you have some of the things I’ve learned in the trenches the last eight months. I don’t claim to be an expert though. Have some tips or advise for budding consultants? It would be great if you could share them in the comments!