Exactly one year ago today I started my first company, Ant’s Eye View. I’ve been part of several startups in the past and am now working with several, but the last year I’ve had the amazing opportunity to focus on something that is 100% mine. Working for myself (aka: the worst boss in the world) has been fantastic, troubling, scary, exciting, and empowering … all at the same time. My friend and former boss, Owen Hannay of Slingshot told me that running your own business gives the owner the highest highs and the lowest lows. When he told me this I thought I understood what he was getting at, but in reality it wasn’t until I hit my first real speed bump that I understood what he meant.
In the past year I’ve gone through a process that more and more people are promising, discussing, threatening to do these days. As a way to mark this occasion, this one year anniversary of independence from the world for reporting to someone else, I thought I would share what I have learned. This might be of particular value to those who are also starting their own consulting practices (and there seem to be a metric ton these days), and remember that this exercise is more about documenting for me than trying to convince you.
You’re not unique, so listen up
Like so many entrepreneurs, when I started out a year ago, I thought I was different, that my business was unique, that my skills were solid and therefore any advice offered to me was only marginally relevant. What I quickly discovered was that while most advice wasn’t an exact fit to my situation, the core point was usually spot on… whether I realized it at the moment or not.
Those who have started businesses before (or generally have more experience than you) have a unique skill that you don’t possess (yet): they can recognize red flags. Words, phrases, stories, and reactions from you may trigger something in them that will cause them to give you feedback. You’ll be inclined to ignore them, but power through it and open your mind.
Decide what you do
It may seem obvious, but get your elevator speech in order as quickly as possible. Don’t worry, the first 100 times you share it as part of handshake introductions or sales calls, you’ll suck at it, especially if you’re doing consulting work. Either you’ll sound like you can’t decide what you really want to do (because you’re talking about so so so many things you can do) or because you sound like 1000 other people pitching the same wares. No matter how many things you can do, pick something you want to be known for and learn how to talk about it. Learn how to introduce it quickly. One sentence quickly. And remember that social media nerds don’t pay your invoices, people who don’t get this space yet pay them. You better make sense to potential clients or they’ll be sending you on your way.
While every client is somewhat unique, most projects aren’t. Implementing a social engagement strategy, for instance, involves nearly all the same steps whether you’re helping an auto repair shop or a Fortune 100 telecom. (Certainly the conclusions will be different.) The sooner you can work that strategy development process into a standard set of steps and activities, the better the results and the better the profit margin. Everybody wins.
The mistake I have seen many consultants make is believing that every client is so different that they have to redesign their process to fit the project. They spend radically more time than they should, which leads to three problems:
- The project is highly unprofitable,
- which makes the project frustrating and not much fun,
- which shows to the client (not good for repeat business) and shows in the results (who does great work on something they don’t like?)
Have a story or get one first
It’s interesting how many great consultants /strategist have a great story before they go into private practice. Guy Kawasaki has Apple, Sean O’Driscoll has Microsoft, Andy Sernovitz has WOMMA, Chris Brogan has his (quite amazing) blogging efforts and personal brand. Clients love a great story they can tell colleagues that shows the value the expensive consultant they just hired. Potential clients trust you more when you have a great story they can connect with.
Along these lines, strongly consider getting some corporate experience before you go into private practice. It might not be as much fun, and it might seem like you’re “missing the boat” by waiting too long, but consultants are meant to help sell new ideas into corporate environments. Clients are likely bringing in a consultant because in some part they’re having a hard time selling the project into the company. Having some firsthand knowledge of how the corporate environment works is crucial to success. And for missing the boat, I’ve been doing this Web stuff for nearly 15 years and while you might miss one boat, there’s always another close behind. Plus, having a corporate budget and corporate resources (not to mention health insurance!) are nothing to turn your nose up at.
Don’t undersell your services
I talk to quite a few people wanting to start consulting practices and I almost always find that they are significantly undercharging for their services. From what I can tell, this happens for three reasons:
- They’re not confident enough in their own (sales or consulting) abilities to charge the going rate
- They don’t know what the going rate is
- They don’t consider anything beyond doing the work itself
That last point is perhaps the most crucial. I read an article years back that talked about the “Consulting Rule of Thirds” that has really stuck with me over the years. Basically, the article’s point was that for consultants, you can divide your main tasks into three areas:
- 33% of your time should be focused on doing the client work
- 33% is focused on finding new business (your pipeline should always be healthy, even if you’re booked solid)
- 33% is focused on learning and growing your skills (nobody wants a consultant who doesn’t understand the ever changing landscape)
Considering that 33% of your time is all you spend doing client work, the rest building and supporting your business, how are you going to cover the bills when you price only for the 33%?
Every action is an opportunity for learning
Screw up a meeting? Get fired by a client? Didn’t deliver as well as you think you should have? Learn and move on. It’s hard to get past not being perfect when it’s your business, but the faster you learn the why, the faster you can move along. Dwelling on the screw up is a good way to throw you off your game, and that’s death to someone who’s hired to be smart.
Keep a log, whether public or private, of what you’re doing and doing about it. Flip back through it over time and see how much you’ve improved. In just a few months you’ll start to realize you’re not making the same mistakes. Mistakes in general won’t seem quite as much like the Epic Failures you originally assume each one was.
Think about scaling
I’m always surprised at how many consultants, myself included, started off with the mindset that a consulting practice is about finding a niche and sticking to it forever. Countless other startup consultants have told me that they don’t ever foresee doing anything but the thing they started consulting around.
That lasts about 3 months.
After that, if the business is doing reasonably well, and considering you only have 24 hours in a day, you’ll be faced with the choice of whether to modify your business or turn down projects. A great place to be, certainly, but the sooner you start thinking about where you want to go based on the vision you have in your head, the better. Personally, I’ve always said that I wanted to be making good money, not all the money. My desire is not to grow a huge team, it’s to stay pretty small, very profitable, incredibly flexible and doing fun work of the highest quality. I don’t want to find myself chasing the million dollar mark, then the ten million mark, then the 50 million mark
To be clear, “scale” doesn’t necessarily mean turning a one-man consulting practice into a worldwide agency. That could be one option, but so could finding ways to quasi-automate so that you can get better over time, charge a larger billing rate, and thus work for fewer clients doing better work!
Learn to walk away
In my experience and from what I’ve heard from my business network, the hardest thing for a new entrepreneur to do is turn down work. Even bad projects, with small budgets, tight deadlines, difficult client teams, and a small paycheck look better than no paycheck at all. I’m not saying there won’t be times when you make the decision to accept a troublesome project, but in the beginning fight the urge to give into fear by accepting anything and everything. When you’re caught up in bad projects, you don’t have openings for the good ones.
Same logic applies to contracts, partnerships, and other business deals.
Trust your gut
Gavin de Becker, author of The Gift of Fear, says victims of violent crimes usually feel a sense of fear before any threat or violence takes place. They may distrust the fear, or it may cause them to act in a way that saves their lives. Humans, apparently, are the only animal that ignore their fear instincts rather than respond to them. Don’t ignore those instincts! Just because you’re new to the game doesn’t mean you don’t have a finely tuned gut. It’ll get more finely tuned over time, but your inexperienced gut is still worthy of attention.
Get some accounting help
Many people, myself included, wait until they have billings that amount to something before getting an accounting system in place. Get a system on day one, and I don’t mean just buying QuickBooks. Set aside about $1000 to hire a CPA who can line you up correctly right out of the gate. Don’t have the $1000 on day one? Rethink starting your practice. Seriously.
Yes, starting your own business is a bit scary. Lord knows I’ve had plenty of sleepless nights. But it’s also great fun. I’ve learned so much in the last year and am incredibly excited to see where the next year takes Ant’s Eye View.