People seemed to appreciate my first post about the mechanics of starting a one-person consulting shop. This post builds on it, talking about the pattern I use as I progress interesting conversations through to closed business.
This is offered in the same spirit as that first post. Your milage will certainly vary, this just is my experience – based on what has worked well for me. I’m super curious to hear any feedback you’re willing to offer.
Conversations from possibility
After a couple of decades in the same field, I have a really solid professional network. I took my first months of independence as an opportunity to re-connect with as much of that network as I could. I filled my schedule with phone calls, Skype dates, breakfasts, coffees, lunches, and after work beers. Even though I’m an inveterate introvert, I found it really pleasant (though tiring) to re-connect with so many people.
In all honesty, it eased my transition from a highly engaged role at a full time job to a much more solitary day to day routine.
It’s important to note that I don’t approach these conversations with any kind of a sales pitch. I was really, seriously just re-connecting with friends and colleagues, letting them know that I had changed jobs. Most of my early business came from referrals from those conversations rather than having my friends hire me directly.
As my schedule has filled up with paid work, I’ve deliberately left gaps so that when someone reaches out asking if I have time for a coffee or a beer, I say “yes, how about Friday.” Those meetings are just as much a part of the job as showing up to a client site. I’m working to develop next quarter’s income, not deliver on this quarter’s.
Scoping conversations and the Nondisclosure
From time to time, one of these casual conversations will unearth the fact that there’s a match between somebody’s needs and my abilities. At this point, I usually say “this sounds really interesting. Can we put a nondisclosure agreement (NDA) in place so we can get into the details?” NDAs are closely related to CDAs, or Confidential Disclosure Agreements. The differences aren’t really relevant at this point, either suits the purpose of these conversations.
An NDA should be a very straightforward document, not more than a page or two, in which both parties agree to keep each other’s information private. The NDA should make no commitments about any particular work, nor should it get unduly detailed. The NDA should also be 100% reciprocal. I won’t blab about you, and you won’t blab about me. The point of this document is to enable further conversation. This is not the time to get fancy with the lawyering or try to exact some competitive edge.
I have an NDA template, but I usually wind up using whatever my prospective client’s attorneys suggest – provided that it meets the criteria above. Most companies are bigger and more formal than my one-person shop, so it’s easier for me to adjust than for them.
From my perspective, the primary value of the NDA is as a lightweight validation that we’re all professionals and taking the conversation seriously. It lends gravity to the conversation, and serves as a gentle on-ramp to slightly more formal meetings.
Building a Statement of Work
As a social side-note, this is the point at which the meetings usually move from coffee shops and restaurants to an actual office. There’s a clear link between where we choose to have a conversation and how serious we are about it.
The point of the post-NDA conversation is to understand enough about each other’s situations to allow a good statement of work to take shape. This is the part where, as the consultant looking for work, it’s my job to have an idea and to make a proposal.
Full disclosure: I used to experience this as the very most stressful part of the process. I assumed that proposing a statement of work was some sort of commercial imposition on what had been, to this point, a delightfully high minded conversation.
When I started out with BioTeam, the founders were constantly behind the scenes, prompting and supporting me to (as they put it), “have an idea! go get some work!” After I got good at it, a major part of my job became to provide that same sort of coaching to help new members of the team overcome the same inertia and nervousness that I had felt.
Over the years, I’ve realized that creating a statement of work is the very best part of consulting. I literally get to write my own job descriptions and (as one mentor put it) “speak solutions into being.”
I talk to interesting people, try to understand their situation, and then try to imagine something that we could do together that would help them. It takes practice to get up the nerve to say “it sounds like there’s potential here! How about this.” These days, I see it as a creative challenge rather than an imposition on the other person.
My statements of work almost always start with a “situation” section that briefly outlines the current state of affairs and scopes the reason for considering a project. I find it incredibly useful, mired in the depths of a negotiation – or even when delivering on a project – to go back and read the “situation” section that we wrote together. All too frequently, I realize that I have wandered away from the original problem that we set out to solve.
Having written the situation, I write a description of what I will do to impact or change that situation. This should be specific enough to see how it would matter, but still leave lots of space for adjustment in both scope and tasking.
At some point, the statement of work starts looking pretty solid. We’ve come to a shared understanding of the situation, and we’ve described things that I could reasonably do that would improve that situation.
This is where it starts to get a bit commercial. I’ve got a proposal template (it’s in Word), with sections for both “situation” and “statement of work.” It also includes a bunch of stuff about how we’ll deal with travel (whole days only, pre-approved only, customer pays for single occupancy rooms, coach class airfare, and a car if necessary), time tracking (I track it and provide detailed invoices), and payment (I invoice monthly, they pay within 30 days of receiving the invoice). There is also a section titled “about the consultant,” which reads like a mini-resume. This bit is important, because the proposal is the document that the person I’ve been talking to will shop around to their organization.
There’s also a section titled “investment.” This is the “how much will it cost,” part.
There has been a lot of ink spilled about negotiation, and still more about how to set prices. I have strong opinions on both topics. Without going too far into those opinions, I will simply say: Ask for a rate at which you will be happy to be doing this work, and be fair and open in the conversation. The real trick to negotiation is to keep the conversation going. Have a list of things you’re willing to give, and have a list of things you’re willing to accept. If the conversation stalls, offer to accept something that you know is easy for the other person to give.
Recall – you wrote the statement of work. You can edit it as you see fit. As the saying goes, negotiate scope rather than rate.
Also, do keep in mind that you’ll be setting aside half of your gross receipts for taxes. That’s a lot.
Closing the deal
Closing the deal is wildly variable. In my experience, smaller and younger organizations tend to send an email that says “yes! Proposal accepted! When can you start?” Larger shops will have a more formal process. I will leave the nuance of navigating a big commercial purchasing system for a later post. Suffice it to say, this is the point at which the documents get complex and it might be good to have a lawyer looking over your shoulder.
As I said up top – I am very interested in feedback and opinions on this stuff. This is what I know, and it works for me. What works for you?