April 30, 2008

Confidence and Humility are NOT Mutually Exclusive

In the last week of my full-time employment a co-worker (and former consultant) told me she thought I would find consulting harder than I expected. I didn't know her very well but I knew her well enough to know she was referring to the selling side of consulting, and I could tell by the way she said it she didn't think I had the "selling side" in me.

I told her I agreed that most consultants struggle with the selling side of the job, mainly because you are selling "you". What you personally bring to the table is all there is to sell, and part of what you bring to the table is confidence. But many consultants struggle with the concept that confidence and humility are not mutually exclusive. The opposite of humility is not confidence but rather cockiness. Cocky consultants are annoying, irritating, and often difficult to do business with.

When I talk with any customer I know I bring confidence to the discussion. Confidence that I know what needs to be done or that I don't.

Cocky consultants always know the answer, regardless if they really do. Confident consultants are humble enough to know when they don't know the answer, but instill confidence they can find it.

She was right that I'm not naturally a sales person. I have friends who are and they could convince you to buy the dirt off your own floor. As a consultant that is not the type of sales person you want to be.

If you are selling on the basis that you offer a service you're selling on cockiness: "Buy me because I'm here." You should be selling on the basis of a business problem that you personally can help solve: "Buy me because you have this problem and I can help solve that problem."

Seth Godin had a great post today on Self Promotion that spurred this thought. Thanks Seth!

April 26, 2008

The Most Important Decision as a Consultant

The number of decisions you have to make when starting your own consulting business are numerous. Decisions like choosing your niche, how much you charge, where you will spend money are all important. But one of the lesser discussed but possibly most important decisions is what business will you NOT take.

I have found this to be the most difficult decision because knowing when the next job will be is usually unknown. You are always in need of the money (lets be honest here), but every opportunity that comes your way has the potential to grow or limit your business (read income).

  • Will the contract increase your specific skill or expertise that makes you valuable?
  • Will the contract lead to on-going future business with a client?
  • How sure are you that the project will end successfully?
  • How likely is it that the potential client will provide you with a good reference?
  • Is the potential client the type that would recommend your services without request?
These are all important questions to ask when deciding what kind of projects you do or do NOT take. But I'm going to focus on one question where many consultants make the wrong decision.

Will the client pay you what you are asking?

This is an important question because it brings up two equally important questions. First, how much are you worth? And second, what type of personal life do you want?

The temptation to take a contract at a reduced pay is great, especially when the pipeline is small. But one of the most important decisions you will make is sticking to your guns and turning this business away. Consultants are generally willing to take these jobs because they come with a promise of lots of work or because of nervousness that nothing else will come along.

But if you take a contract for either of these two reasons you are both decreasing your perceived value to current and future clients and sacrificing your lifestyle. You should be confident that you are worth your rate and your current and potential clients must see that. Taking a contract for a lower fee says that you believe you are not worth your stated rate. And if you do not believe you are worth your fee then you should not be charging that fee.

The second reason you should not accept a reduced fee is based on simple math. Let's say your normal fee is $100 per hour. If you take a 20% fee reduction at $80 per hour then you have to work more hours and harder to make up the difference.

Most likely you have a revenue goal for your company (if you don't it's time to get one). The more projects you take at a decreased rate the more you have to work to achieve that rate.

If you are still not convinced then look at it this way. Let's say your goal is to bill 30 hours per week at $100 per hour with four weeks of vacation. That means there are 48 billable weeks in the year. This is pretty aggressive goal if you are just starting out.

48 weeks x 30 hours x $100 = $144,000

NOTE: $144,000 may look like a lot (or may not), but when you factor in taxes and business expenses your take home quickly begins to fall.

If you take a 12 week contract at your 20% fee reduction there are only 36 weeks left in your "goal year".

12 week x 30 hours x $80 = $28,800
36 weeks x 30 hours x $100 = $108,000

Now your total revenue is $136,800. In order to make up the difference of $7200 to meet your goal you have to work 72 hours at your $100 rate. That equates to 2.5 weeks of work which leaves you with 1.5 weeks of vacation time.

But the better scenario is that you would only need to work 45.5 weeks at your normal rate to achieve the $136,800 revenue number. This means that you either have 2.5 more weeks of vacation time (imagine a job with 6.5 weeks of vacation), 2.5 more weeks to market and build the business, 2.5 weeks to blog and share your knowledge, or 2.5 weeks to try and find a small contract at your $100 per hour rate.

Be worth what you say you are worth. It will be better for you in the long run.

April 19, 2008

How Far Should I Take It

Out of curiosity to where it would go I responded to the French email I received. Here is what I wrote...

Dear Mr. Majeed,

It took me a while to understand your message, but I was able to translate it. I think maybe you didn't mean to send this to me since I'm not French, but since I was able to understand the message WOW! $20 million! Lucky you...and now lucky me for maybe accidentally receiving your email. I think you are looking for americans to help you invest the money. If so, I am definitely interested! I mean even if I only get 1% that is a lot of money. How do I go about helping you and me make a bunch of money?


This morning I received this message back. (Click on the picture to open a more readable version.)
This kills me because who would honestly believe this?! But now I'm intrigued because I'm curious how far this could actually go. What do you think, how far should I take this?

April 17, 2008

I'm Gonna Be Rich

I received an email today that is going to change my life. There is this guy in Iraq that works as a translator for the US military. He and a few soldiers found this trunk with $20 million US dollars! His share is $5 million and he wants me to help him invest it in the US stock market and I get to keep a portion of the profits! I mean, even if I only get 1% that is $50,000 per year! If you don't believe me, here is the email he sent.

Oh...it reads a bit odd because the email was in French and I had to translate it on Babel Fish. Leave a comment if you want me to email Issam Majeed and ask if you can be involved, too! I'll keep you apprised of how it goes down.

Good evening, Jai have your contact and would please share an important business trcs with vous.Si that does not interest you, want mexcuser for the disturbance much. I am Mr Issam Majeed, I work in Iraq with the American Soldiers as translator. Jai of the evidence for you to show it aprcs.Dans one of the our military operations in Iraq, we discovered a strong trunk in a large house dun great man daffaire Iraqi in the town of TIKRIT. This strong trunk contains a great sum dargent, of the American dollars, it be-R-statement USS 20 Million. We immediately kept this strong trunk in a place made safe with three other American soldiers. After long deliberations between us to know if we must give these funds to the American authorities in load of place or not, we decided all to share these funds between us. For the division, each one of us received the sum of USS5 Million For my part R causes problcmes of safety in Iraq, jai decided marranger with the agents of safety measures deprived in Iraq to transfer my share from these funds out of lIraq, precisely R London. Jai put the funds in a parcel as being family affairs and I lay coded what wants to say to quaucune anybody does not know that this parcel contains largent me except. What I tell you is the truth and if we treat together in this business, you will see it. I you contact thus to see whether you can maider has récupcre the parcel R London and to transfer it in your country or I would like to invest these funds in profitable fields. I would give you also a few percentages of these funds to have to accept maider, the percentage we will discuss it when I receive your answer. The Iraqi insurrectionists are against me what makes quils seek me to kill me because I make translations with the American soldiers. I do not leave nimporte how without the American Soldiers to avoid the worst. I nutilise not of telephones nor do not receive calls here. Jutilise only lInternet and walkie-talkies to communicate with soldiers with whom I work. If this transaction is well concluded, I want to resign of this works because to live here in too risky Iraq cest. I thank you and jattendrais your answer. Please, if you agreed to help, I want that you me via this address e-mail (issam.majeed1@yahoo.com Mr Issam Majeed.

Original email in French

April 13, 2008

Next Gen Dads

I posted about launching Next Gen Dads and while back and I've got enough of the layout done that it was time to launch. No sense waiting till it's done or it will never get launched. Next Gen Dads is a Daddy Blog about raising kids as a work-from-home-dad that believes dads and moms should share raising kids as an equal partnership. It will be my thoughts, and hopefully the thoughts of others, on marriage, parenting, and the successes and failures that you experience as a husband and dad. You will need to read the blog to find out exactly what all that means.

For those of you that read k.sturm blog to find out about my family related stuff, the majority of those posts will now appear at Next Gen Dads. This blog will be 99% dedicated to "Ramblings on business, entrepreneurship, consulting, technology, and other topics I'm passionate about." I will be migrating all existing family related posts to Next Gen Dads over the next few weeks.

If you would be interested in co-authoring on Next Gen Dads leave a comment and we'll chat!

April 9, 2008

Ending the Name Game

This post has been moved to Next Gen Dads. Click here to see this post.

April 7, 2008

What's In a Name...

This post has been moved to Next Gen Dads. Click here to see this post.

April 3, 2008

Somebody Has a Funny Sense of Humor

Last Saturday Brody and I went to breakfast together. We walked past a small construction area where the below drawing was on the sidewalk. Somebody has a funny sense of humor...

The Marketing Value of Personal Recognition

I recently have been the lucky recipient of personal recognition as a valued customer. For many organizations personal recognition marketing gets regularly overlooked as one of the best and very cheap ways to spend marketing time and money.

Have you recently personally recognized a customer for their value? Without them you wouldn't be in business...

Example #1
I've written before on my transition to using a local bank (or credit union in my case) versus a big-impersonal-conglomerate-that-apparently-does-not-care-if-they-have-my-money-type-bank (aka Wells Fargo). Since switching to Wescom I have received now at least two (maybe three) personal letters from staff at the bank. I think it is important to note that it is not always from the branch manager but from the bank teller of my last visit. I have never banked at any other bank where the teller sends a "you are valued" letter.P.S. Despite what Chrystal says it is not because I'm Daddy-Big-Bucks. Not even close!

Example #2
When I switched from a PC to a Mac I found the need to have an MS Office compatible program with the hope to not pay through my nose for it. On the recommendation of a friend I downloaded NeoOffice and have been "reviewing it" for about 6 months. This week I came to the final conclusion that "it is awesome". I think it is awesome for two major reasons. First, all the functionality I need is there. Second, it's FREE! That's right, a FREE Office Software Suite that includes compatible versions of MS Word, MS Excel, MS PowerPoint, and MS Access. It also has a very basic Visio type program. I only use Writer (Word) and Calc (Excel) but I have not yet had a single compatibility problem. NeoOffice asks for donations to support keeping the software free, so upon deciding how useful it was I made a donation. I immediately received the below automatic email.
But then I also received a personal email from Patrick thanking me for my donation.
Oh, and for the record my very large donation was $100, which seemed really cheap considering it saved me the $400 expense of buying Office for Mac.