December is a good month for IT consultants to wind up the books, discuss contract renewals, reflect on their performance, and more.
Although it may be a somewhat arbitrary marker that we've inherited from history, the end of the calendar year has become the customary time for wrapping up certain activities and beginning others. Here are some items that may need your attention as we turn the page to 2010:
- Contracts. If your client agreements expire at the end of the year, now is the time to review and revise their terms, so you can get your clients to renew before January 1. Consider whether it makes sense to raise your rate and, if so, by how much. Yes, the economy continues to suffer, but we seem to be entering a recovery phase now. Besides, your rate is all about the value you provide vs. your client's other options — if paying you makes them money, then cost shouldn't be an objection. Do you want to change any other provisions of your contract, such as payment terms or travel arrangements? If you use subcontractors, now might be the time to revisit their contracts as well.
- Business plan. You should review your business plan throughout the year, but the calendar provides a convenient benchmark for comparing your performance over time. How well did you execute on your plan for 2009? What things went surprisingly well? Where did your expectations meet with disappointment? What will you change for 2010?
- Accounting. If you run your business on a calendar year, you'll need to start winding up your books for 2009 so your accountant can prepare your financials and tax returns as soon as possible. You may have to wait for 1099s from clients (or the equivalent, if you're outside the United States), and you may not want to actually file your taxes until the last possible moment, but the earlier you know your position the better you'll be able to prepare for that event. If you used subcontractors or employees during the year, you'll also need to report their income to your taxing authorities.
- Budget. The first three bullets above should inform your budget for 2010, as well as being partially determined by it. How much will you spend on new equipment, software licenses, subcontractors or employees, developing new business, education, etc? Does your projected net income support those numbers? How much wiggle room are you leaving yourself in those projections?
- Holiday cards and gifts. The December holiday season provides an opportunity to give your clients a "thank you" out of the blue — and an excellent excuse for re-establishing contact with past clients. I've had business directly result from nothing more than a Christmas card, simply because it reminded the client that I was available. Besides, a holiday card doesn't shout "I want your money" — instead, it says "I'm a nice guy who is thinking about you." If you know your client's holiday orientation (Christmas, Hanukkah, Kwanzaa, other, or none), then you can choose an appropriately themed card; otherwise, stick to "happy new year" to avoid offense. If you can afford to send each one a gift as well, that can go a long way towards making your clients feel that you're not only an associate, but also a generous friend.
- Work. With all of your other end of year concerns, don't lose focus on making December a good month. Your clients may be distracted with their own year-end activities, and they may be taking time off for the holidays, which can mean a shortened list of work for you. Make sure you load up your pipeline now by asking your clients what they will need from you for the remainder of the month.