Outsourcing

Boost your IT consulting business with your friends' help

Mixing business and friendship can have its benefits -- if you set appropriate limits. Here are the potential upsides and downsides of taking on new business based on a friend's recommendation.
 TechRepublic member IT.Consultant recently asked about how to get past the need for recruiters to find new business as a consultant.  

Why do companies use recruiters? It certainly isn't because they enjoy paying their fee -- although they consider the fee a reasonable expense for qualifying the candidates for the position. The recruiter acts as a crude form of recommendation. But a much more reliable form of recommendation comes from individuals who know someone personally.

Benefits

I bet 90% of all new business I've taken in over the years has been the result of a personal recommendation. A manager will express the need to find someone who can help with technology XYZ, and a fellow employee will say, "I have a friend who knows all about that, and he does consulting." The manager calls me up, we talk for a few minutes, I e-mail her my standard contract, and the deal is on.

Contrast that with how that might have gone, sans friend. If I managed to contact the company at all, they wouldn't have known me from Dogbert. My résumé, rather than impressing them, would come across as a massive hard sell. If the company decided to invest time in interviewing me, they'd probably never feel satisfied that they had asked all the right questions. Both of us would be constantly looking for opportunities to prove or disprove that I am what I claim to be.

Friends on the inside can be helpful after you've landed the contract too. No matter how well you execute your client's requirements, and no matter how clearly those requirements are spelled out, a very large part of consulting success lies in navigating interpersonal relationships. Especially when you're working remotely, a personal friend on site can keep you updated on those developments. They can also represent your interests in your absence to some degree.

Pitfalls

But nothing in life is free and that also goes for friendships. Maintaining a friendship, especially a remote one, often requires a little quid pro quo. Some free help here and there to boost a friend's career can go a long way. Unfortunately, some clients abuse that benefit by saying, "Oh, you're Chip's friend, so call him up and ask him how to handle ABC..." and expecting not to have to pay for this advice. It can be awkward and difficult to know where to draw the line and say to a friend, "I'd love to help you with this, but I'll have to insist that your employer pay me for my time."

Even more uncomfortable is when your friend wants to leave your client's employ. Naturally, you want to give your friend a recommendation, but what will your client think if it appears that you're helping them lose an employee? How much of your relationship with the client has depended on having a friend on the inside? You're about to find out.

Even more volatile than a friendship is having a romantic interest at your client's office. It's generally not a good idea at all. While it's going on, your client has to weigh your motivations relative to that relationship. When it's over, there can be hell to pay -- and it truly is a distraction. I've only made that mistake a couple -- um, actually... let me see... oh, yeah, there was that one... carry the two... uh, too many times, OK? Fortunately, the last time was 13 years ago, and she is now my wife. I was also lucky (or had good enough instincts) to avoid dating anyone who worked on the same project team as me; it would have added a lot of stress to an already potentially stressful relationship.

Set limits

Interpersonal relationships are the most powerful factors in a business relationship, and they can easily get out of control. But if you employ them wisely and set appropriate limits, they can boost your success as a consultant -- besides being rewarding in themselves.

Get weekly consulting tips in your inbox TechRepublic's IT Consultant newsletter, delivered each Monday, offers tips on how to attract customers, build your business, and increase your technical skills in order to get the job done. Automatically sign up today!

About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

19 comments
reisen55
reisen55

I have successful account relationships for over 10 years with a few companies and they JUST DO NOT REFER, for what reason I know not. Maybe they feel afraid they will lose my service or something like that, but they remain happy, content and always renew my contracts with them without issue BUT JUST SIT ON THEIR BUTTS. My problem is how to diplomatically MOVE THEM to DO SOMETHING.

Sterling chip Camden
Sterling chip Camden

How have personal relationships helped or hindered your consulting engagements?

PMPsicle
PMPsicle

If they won't refer you (usually because it's too much work but sometimes because of company rules) try getting a testimonial. First ... write the testimonial you would like them to give you. Then ask them for a testimonial (written referral). If the response is "Write it up and I'll sign it", you can then hand them your prepared testimonial which they can copy onto their own letterhead. Store the original away, then, use the bits you wanted (you did write it that way didn't you), in all your marketing contacts (letters, brochures etc.). If you get a really good line (or better still several quotables) add it as a tag-line to your corporate signature. With modern word processing you can cycle through these testimonial sigs with every letter etc. If they won't write a testimonial ask if you can use their name on a client list. If a client is happy with you they will often let you do one out of the three. One thing, be prepared for the answer they are not allowed to endorse suppliers with a solution (for example quoting without the company name). Better still, sit down, brainstorm all the possible objections, and document the objection and solution. Then after you've asked add any new objections and figure out a response. Then get out and ask. You won't get all but you will get some and that's a good start. Glen Ford http://www.trainingnow.ca (who's hoping this made sense because he's so sick right now he can't be sure!)

patrick
patrick

I have a question about your contract. I have a small IT consulting business (literally small just ME!) and up till now my advertising has been word of mouth (e.g. friends or contacts talking to other potential contacts). Most of the time its just as you said as far as the interview part. "can you do xyz within this time frame" or "can you help do this for my business". But what stifles me is the "paperwork" that needed in these types of situations. I generally charge an hourly fee or I'll quote for a particular job a flat rate just depending on the amount of work needed. So i guess my question is how or what to word in the contract because business is starting to pick up and I'd like to have a 'canned' contract I can print or email to a potential client. Any suggestions you would be greatly appreciated. Patrick

Sterling chip Camden
Sterling chip Camden

Good advice on testimonials. My experience is that most good clients will gladly give them -- although I have had a couple of them ask me half jokingly, "now you're not going to get so much business that you forget about us, are you?"

patrick
patrick

Thank you guys for all the great advice. I really appreciate it! I will be checking into the staples generic one and possible going along those lines. Thank you again!

PMPsicle
PMPsicle

Check Techrepublic. They have a couple of downloads with contracts (if I remember correctly including a memorandum of agreement). As with the Staples versions referenced previously, these are templates and you'll need to tweak them to meet your own needs. I'd also suggest investing a couple of bucks into having a lawyer review the contract. Some of the clauses may not be legal in your jurisdiction. Best of luck! Glen Ford http://www.trainingnow.ca

Jaqui
Jaqui

For getting something ready for a lawyer or use if you don't have the time for a lawyer to vet a contract form, I would recommend checking a local outlet for an office supply store. Staples, up here at least, has several different sets of basic legal forms, including contracts for general work. These "generic" contracts are not perfect, but they are a good starter and a lawyer can much more easily make them ironclad than just a listing of what you want it to cover. Here in Canada, they are legal documents, and binding in a court case. The cheapest ones are about $10, which is a disk with 2 files, an MS word teemplate and a .txt template.

Sterling chip Camden
Sterling chip Camden

It's a good idea to have a standard contract ready. With mine, I just plug in the client's name, adjust the rate if needed, and I'm done. That's a great idea for a future article, Patrick. Of course, what you want to agree to is your business, and you should always discuss it with a lawyer.

Sterling chip Camden
Sterling chip Camden

So, another way to get them to help you is to make them aware of that. "In order to stay in this business and continue to provide help to you, I need to find some additional clients to make it worthwhile. Can you lend a hand?"

apotheon
apotheon

Actually, it may well be in their best interests. If you have more business, you [b]stay in business[/b], which means they get to keep availing themselves of your expertise. People have a tendency to imagine everything's a competition somehow, and act accordingly -- which can be counterproductive for their interests, because often cooperation is more productive. So . . . I wouldn't say it necessarily isn't in their interests to help a consultant they like get more business. I might, however, say that they [b]think[/b] that's the case, and will act accordingly. It's kind of a subtle difference, but an important difference nonetheless.

Sterling chip Camden
Sterling chip Camden

... it isn't in their interest to send you business. What do they get from it? As apotheon said, only a distraction of your attention. Maybe you could offer them a finder's fee? Two free hours of consulting for every referral that results in an engaagement?

apotheon
apotheon

Maybe they value your services so highly that they want to prevent potential competitors from benefiting from your expertise.

reisen55
reisen55

And NO I do not expect tons of leads from them, but after a few years I would expect some nudge from somebody. I am thining of those instances where they hear (as they must occasionally do) of another company having issues so they can recommend me. And once a year would be nice. They CANNOT live that much in a fishbowl ya know.

Sterling chip Camden
Sterling chip Camden

... your clients to actively market for you. If you ask them to do something specific, they may go along with it. But if you want them to think of it all by themselves, I'm afraid you'll be disappointed to find that they aren't always thinking about you.

reisen55
reisen55

I have a nice collection of those on my linkedin.com profile. What I need are marketing venues, references to their colleagues, business gatherings. A seminar for area dentists, for example, that I can present at. If they hear of a bad situation somewhere, recommend me to fix it. Direct support. Business networking groups are a big help of course.

PMPsicle
PMPsicle

He said "There's two and only two reasons to have a contract. The first is to give the two of you a basis to negotiate an agreement on. The second is in case the agreement breaks down." Glen

Editor's Picks