If you have one or two big consulting contracts, here are five things to keep in mind when you eventually lose their business.
If you're in the consulting business for any length of time, you'll experience the vicissitudes of the feast or famine phenomenon. As you go through its ups and downs, sooner or later one of those downs will take you by surprise. When a large contract suddenly goes away or gets drastically reduced, you might find it hard to pay the bills. You could even begin to wonder whether you can make it as a consultant after all. Here are some things to remember.
If you don't have other prospects already lined up, you could find this situation rather frightening. You might want to jump at the first thing that comes along, or even leave consulting for the supposed security of a salaried position. You might think about drastically slashing your rates in order to quickly attract new business. Keep your head cool and think about what's best for your business. You don't want to find yourself a year from now slaving on low-paying projects that keep you too busy to find anything better. The skills that got you the client you just lost will help you find others.
Don't blame yourself
This event can easily become the entrance theme for a magnum performance by the Impostor Syndrome. Some of his best lines include:
- If you were for real, you would have kept that client.
- They dropped you because they finally saw through you.
- You allowed your skills to stagnate, so now you won't be able to find new work.
- It's time you quit pretending to know what you're doing.
Those are all BS. The truth is that nobody knows everything about their job, especially in IT. We're all learning all the time, just to do our jobs. We can't keep up with everything in the field, so there will always be some domain of knowledge about which we think, "I should have already learned about that." Even though that may be true, beating yourself up about it isn't going to help. It will only paralyze you.
Analyze your mistakes
Without blaming yourself, think about whether there were things you might have done differently to keep the client. Then ask yourself whether that is likely to apply to other clients as well. We can all stand to improve ourselves in one way or another. We may need to learn new skills, or work on our interpersonal communications. Did you fail to remove some false dilemma that made the client think that they either had to let you go or suffer some worse consequence? Did you miss or ignore any warning signs that this was about to happen? It's always good to examine ourselves for the cause of our difficulties, but don't forget that sometimes circumstances have nothing to do with anything we did or could have done.
Find new work
Even though you may feel compelled to work extra hard for your remaining clients, you probably need to set aside some time to deliberately seek new business. If you try to make up your losses on your existing clients, you may overburden their budgets and create problems in those relationships. When looking for new work, keep a cool head. Desperation doesn't sell. Stick to your proven methods of finding work, or innovate thoughtfully — but don't grasp at straws.
Prepare for the next time
These downtimes are never fun. Wouldn't it be nice if you could ride through them more comfortably? There are at least two things that you should do. First, set aside some money on a regular basis in a fund specifically designated for getting through these rainy days. Second, keep your client base diverse. If each client is only a small fraction of your business, then losing one or even two at the same time becomes a speed bump instead of a "bridge out ahead!"
A dozen years ago I lost a client who had been with me for ten years, and who at the time accounted for almost 50% of my business. I didn't recover quickly. It took years to build my revenue again by piecing together smaller contracts. I had become too comfortable with that regular chunk of income every month.
How about you? Do you have one or two big contracts that are making you complacent? What could you do to soften the blow when they eventually go away?