Want your IT consulting work to bring in more money? Instead of chasing down new business, try these three approaches with the clients you already have.
What question do consultants ask themselves more than any other? I'd be willing to bet it's "How can I make more money?" Consultants often jump to the seemingly obvious, perhaps presupposed conclusion that they need to get more clients. Let's explore an alternative: ways to make more money with the clients you already have.
- Raise your rates. Speaking of obvious, you can make more money by charging more for the work you do. Almost every consultant can afford to raise their rates, because we consistently undervalue our worth to our clients and fail to take the cost of doing business into account. However, that RollForward Pricing doesn't come without consequences -- you may scare off some business. You need to consider whether that's the business you wanted to lose, because it would take up time that you could have spent on more lucrative work.
- Improve your efficiency. Get projects completed faster, with fewer mistakes. Perhaps that sounds counterintuitive -- to make more money from existing work you should milk it for all it's worth, so why hurry? Well, for one thing it's unethical to churn, and if your client ever finds out that's what you're doing they aren't going to be your client for long. But even if they suspect nothing, they may think you're pretty slow and find someone else. Even if they accept "that's just how long it takes," clients usually have a price point for each project (whether they've named it or not, or even if they're unaware of it) beyond which they believe the project simply isn't worth the cost. They may cancel, or they may not extend the project. They may even fall into a pattern of believing that all new development is painful. You don't want to be a source of pain for your clients. By contrast, if you regularly surprise your client with how quickly and painlessly you can implement something, then they will more likely give you additional work. They could easily spend much more in the long run, because of the value they're getting for each dollar (or euro, etc.).
- Suggest projects to your clients. Consultants often belie the name by not providing advice. The client hands them a project, the consultant does what's expected and collects the check, end of story. You'll do everyone a favor if you keep your eyes open for other ways that you can help the client be successful. Perhaps you notice that the build procedure for the project contains a lot of repetitive steps that someone has to remember. Offer to automate it, or at least suggest that somebody should. Now here's the paradox: to succeed at this, you have to ignore the potential for your own revenue and focus solely on what's best for the client -- which often means the alternative that will cost them the least. If you do that honestly, the projects will flow your way, with the cash following.
That all sounds like a lot of work. Why not just beat the bushes for as many clients as you can find, and then get more work than you can handle, subcontract it out, and take a cut?
New clients come with all sorts of risks and unexpected time drains. You don't know their payment record, or how they treat consultants. More importantly, you don't know as much about their business and how they do things, so you can't be as effective a consultant as you can be for someone with whom you've already worked. Besides, if you get too many projects going at once, coordination takes a larger share of your time -- and any little emergency can send all your deadlines whooshing past. If you sub out work, then you get a smaller percentage of what's charged, and you have to become a manager. Is that what you want?
Of course we need new clients to keep our consultancies afloat. Rarely will the same handful of customers consistently have work for you to do. However, adding new clients should be the occasional evolutionary step for your business -- not your sole strategy for making money.