Successful Consulting:  Make the Transition from Marketing to Paid Consulting As Quickly As Possible

by Nathan O. Sokal

Editor's Note: This article is the fourth in a series about consulting practices.
Part I | Part II | Part III | Part IV

Market, market, market. Many consider this phraseology the consultant’s mantra. The benefits and perks of being self-employed are many; flexible work schedules, work variety, and the opportunity to rule your own destiny are but a few. But for independent consultants, work time does not always translate to a paycheck. Considerable effort goes into landing the jobs themselves, into marketing expertise and services. This marketing effort is an ongoing task for consultants, regardless of how much work is actually done in house. And it often requires consultants to take risks by giving away time and sometimes even work at the front end, with the hope that paid work will follow.

Consultants must be careful about what and how much they give away. The key to success here is to move from a marketing effort to a paid consulting effort as quickly as possible. The following scenarios — some real and some theoretical — illustrate some of the pitfalls that can beset unwitting or inexperienced consultants.

Scenario #1: Avoid Providing Free Consulting

One consultant described the following experience: “I got a call from a fellow who wanted me to evaluate some patents and tell him where to go to try to market them. He kept asking for letters describing ‘what I would do for him,’ which I submitted. I began feeling a little uneasy; I got the impression he wanted me to let slip a simple opinion as to whether the ideas were really technically viable, so I was excruciatingly careful not to give away any such information. When the guy realized I wasn’t going to give him what he wanted for free, he dropped me like a hot rock.”

As a consultant, you must constantly walk a fine line between helping a legitimate potential client as part of your marketing and public relations effort, and giving away work or expertise — which you are in the business of selling — for free. Try to determine whether the request for help is legitimate or whether your potential client is simply seeking free advice. When your marketing meetings and documents begin to provide useful information to your potential client, professional fees have become appropriate; the potential should be dropped from the client reference, and you should begin getting paid for your work.

Scenario #2: Verbal Agreements Don’t Always Stick

You contribute to a client’s proposal at no cost to the client, with a verbal agreement that if the client lands a contract, you will get a defined subcontract. You have no problem with this agreement because you have worked with the president of the client company for years and know he is as honest as they come. But what happens if the president suddenly leaves the company? For starters, your long-term relationship leaves as well, leaving you with a new president who is not obligated to honor that verbal agreement.

Regardless of how well you know a client, do not rely on verbal promises or agreements. Draw up a written agreement. If you have a strong working relationship with the client, he or she will understand. Your written agreement should describe the terms of the up-front work to be performed and should specify what will happen if the company decides not to issue a subcontract. At the very least, this agreement should include a payment agreement for your proposal effort.

Scenario #3: Don’t Assume Your Proprietary Information Will Stay Proprietary

A consultant submitted a proposal to the head of a group in a large company. The consultant disclosed his proprietary technique for the potential client’s analysis. The two made a verbal agreement that the consultant would receive a considerable subcontract if the client received a prime contract. The head of the group retired and no one else in the group knew the terms of the verbal agreement. To make matters worse, the company usurped the consultant’s proprietary technique.

Be sure that anything you deem proprietary remains proprietary. Specify in writing that proprietary information, techniques or specifications are your property. State that they cannot be released in whole or in part to any other party without your written permission, and that the client must use them internally only for the purpose for which they were submitted originally.

Scenario #4: Potential Clients’ Emergencies Need Not Cost You

Your potential client’s project manager is in a panic. You must start work immediately to help get the project out of a technical crisis. The consulting agreement paperwork will follow later. You respond immediately, work days, nights and over the weekend, and solve the problem. The project engineer is grateful to you for getting him out of an embarrassing hole. Two weeks later, though, you still have not received a purchase order. When you call the project engineer about it, he tells you that management didn’t approve his emergency requisition for your services. Since you can’t submit an invoice without a purchase order, you performed all of that hard work for free and you have no recourse.

It’s good customer relations to help clients in emergencies, but be aware of the financial risk involved. Maybe your work can be considered an investment that will lead to paid work later, but why take the financial risk if you can avoid it?

Before you begin work, find out whether the people calling you has the authority to commit the company for the required amount of funding without getting approval from a higher level. If so, have them issue a purchase order or requisition to cover at least the first few days of your work — preferably all of it. And always get a copy of the paperwork; don’t rely on verbal reassurance that it's in the mill.

Don’t Give Away the Jewels for Free

Yes, you must market your services. And part of your effort may require you to do something for nothing on occasion. But don’t give away your jewels of ideas for free. Find the fine line between proving your capability or offering help to develop good client relations and giving away your jewels — and then walk that fine line.

The views expressed in this article are the author's and not necessarily those of the IEEE or IEEE-USA.

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Nathan Sokal is president of Design Automation, Inc., an engineering consulting business. Mr. Sokal has been a consultant for 37 years.