One of the elements I stress to people who enroll in my mentoring program is that itís important to pay the bills! Ideally, that means launching a career with sufficient savings, investment, or loans, but such careful planning isnít always possible (especially for those of us who have been fired, which I can clearly recall!).
One of the most overlooked answers is subcontracting, which Iíve found that even seasoned consultants engage in to maintain cash flow during times when their own pipelines are dry, or if their work tends to be seasonal or depressed by some industry event or downturn.
The best way to subcontract is to let people know that youíre available. This is a tight labor market in all professions, and quality help is desperately needed. I receive at least three inquiries a week from principals of small and medium-sized consulting and training firms who want to know whom I can recommend for subcontracting work.
Some hints for subcontracting:
1. Donít set a daily rate. Negotiate for your fee. Donít forgetóyouíre in demand.
2. Donít be too picky. Be willing to work in all geographies.
3. List yourself as generally as possible. ďSalesĒ expertise will gain far more inquiries than will ďfinancial sales telemarketing.Ē
4. Learn. Make yourself more valuable as a result of your experience working for others.
5. Maintain the highest ethical positions. Do not compromise your contractor, and do not attempt to make personal inroads into an account youíve been assigned.
When youíre subcontracting, donít stop your own general marketing efforts. Continue to write, place ads or appear in listings, speak at high potential events, network, remain active in trade associations, and do interviews.
Therefore, itís best to seek subcontracting work which is not overly lengthy or intense. If youíre working forty hours a week for eight weeks as a subcontractor, your own pipeline is going to get that much drier unless youíve already created a strong ďgravity.Ē Itís far better to work three or four days a week, and use the other time for your own aggressive marketing.
You need a subcontracting strategy, of course. But once you have one that allows you to continue your own marketing efforts, youíll find that this might be an ongoing part of your growing practice.
Beware of these risks:
1. Get references and referrals for your contractor. This is a partnership, not a servant relationship.
2. Ask for a deposit paid in advance. Do not allow yourself to be paid when the contractor is paid or at the end of the assignment. Many contractors are terrible at collecting their own money.
3. Establish a clear agreement on expense reimbursement, including what, how, and when, so that there are no unpleasant surprises later.
4. Be clear on how you represent yourself. Are you a member of the contractorís firm or are you an independent who is allied with them?
5. Be careful about tax implications. If one source of business is your sole business income, and you take direction from that contractor regularly, you may find yourself considered an employee by the IRS with severe tax implications. (There is an article about this on the IRS Web site).
6. Never subcontract full time, or youíll have no opportunity to build your own business, which is the only way to really acquire wealth.
To diversify your subcontracting ďportfolio,Ē itís ideal to have several firms which call on you. In that way, no matter what the economy, someone is likely to need you because their specialty is doing well. Moreover, youíll be able to learn the business form a varied group of successful marketers. (If you were already a successful marketer, you wouldnít need them!)
Look at subcontracting as a temporary earnings alternative that you intend to wean yourself away from over the ensuing year. That means that you canít get too comfortable subcontracting, but thatís hardly a threat since youíre only going to make enough money to augment your income, not to support you. Iíve known quite a few people who used subcontracting to support the investment in their own full-time, eventual business.
In turn, remember that subcontractors whom you hire should be thinking the same way. Never become too complacent that an excellent delivery person will be with you forever or will never want a raise. In this market, like any other, you get what you pay for.
© Alan Weiss 2007 All rights reserved.
Alan Weiss, Ph.D., has been cited by the New York Post as ďone of the most highly respected independent consultants in the country.Ē His clients have included The Federal Reserve Bank, Hewlett-Packard, Mercedes, JP Morgan Chase and over 200 similar world-class organizations. He has written 26 books which appear in 8 languages. He conducts a global mentoring program. You can reach him via his web site: http://www.summitconsulting.com or his blog: http://www.contrarianconsulting.com.
Creative Ways to Find Business or How to Ensure Bread Is on the Table
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