Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
The Biz Question
I've been self-employeed for nearly four years now. Up and down and up and down and up and.... (you get the picture)! When does all this uncertainty and feast and famine finally level out? Bill
Answer from our Guest Expert Kent Capener of Capener Consulting
Common as Fast Food
Well, Bill, you're just getting a taste of the self-employed world. Don't feel alone; your dilemma is as common as fast food restaurants. It's unnatural for the ups and downs to level out -- if they did, you'd be on the two-week pay check routine.
The Chew-Corn-While-You-Walk Strategy
A long time ago, and in this galaxy, about the time of Napoleon I think, humankind discovered that it's possible to walk and chew corn at the same time. But Napoleon himself also discovered you can't walk, chew corn, and defeat the English at the same time! The moral to the story: Do double duty, but not triple duty!
For example, when you spend your time doing the actual work, you can't be out pounding the pavement for more business. So when you're done doing the work, there's no new projects to start. So, you gear up and go find more work and start the process all over again. You have to incorporate chewing the corn while you're walking (two of three things). Dedicate time every day to keeping up contacts with potential clients; keeping abreast of developments in your industry; networking; and in general, promoting your talents. All while churning out your current work projects.
If you're successful at doing this, then the famines won't be so frequent and you won't get as frustrated with the lag times. Yeah, the feasts aren't the problem; it's those famines.
Retainers Add a Dash of Regularity
As to the uncertainty, that too is a natural part of being self-employed. But the solution is within you as well. To make business -- namely the monthly cash flow -- more certain, look for internal ways to keep the business on a balanced diet. Of course, this all depends very much on your clients and what kind of work you're doing, but for most "consultants," the concept of a monthly retainer can have a very calming and equalizing effect.
For example, in my business, Capener Consulting, I provide a number of marketing services ranging from marketing and advertising to video and television production to writing business plans for small businesses. Whenever possible, I combine services. This usually is marketing and advertising, or marketing and a business plan.
Because marketing tends to be a long-term assignment, I offer my services to clients on a monthly retainer. The amount is negotiated, and in turn, I return any and all commissions and mark ups against the retainer. So when things are slow in terms of implementation projects, the monthly retainer is there. When business goes thru the roof, the commissions and mark ups cover the retainers and add additional income. The trade off is worth it. If your business allows for monthly retainers, you can develop your level of comfort using this technique.
If your business is more contractual and project-related in nature, you could avoid those famine pitfalls by doing the ole chewing-corn-while-you-walk strategy.
Good Marketing Creates a Steady Stream
Another strategy for evening up those ups and downs is to "chum" the waters. Or in other words, spread the word about your business any way you can. Develop and use a consistent and visible marketing and promotional plan for your business. The more you're being talked about when you don't know it, the better off you are. Here are just a few quick and painless ways you can start a marketing and promotional plan.
If this isn't your cup of tea, Bill, you have yet another alternative for working some marketing marvels. Are you sitting down? Good. It's growth.
You could promote yourself by hiring people to do the business and people to find the business. Your function would likely best be getting the business to jump-start the revenue to provide for the economies of hiring. You might look into investing in employees. By that I mean, build your business foundation first, or start with sales, and you cover the costs and the work. Then as the business grows, hire additional people to accomplish the work, while you remain in front. If you're successful at this, then your business would be a lot longer on the feasts, and less on the famines.
So Bill, "It" doesn't ever end unless you make it so. Even then, you're susceptible to what I call "bowling balls from the sky." Those unanticipated and unforeseen disasters. For example, the recent earthquake in Taiwan wiped out one of my client's factories and Hurricane Floyd put six feet of water on another client's golf course.
Hopefully, some of these suggestions might help you along a more even path! Best of luck to you!
Kent Capener, Capener Consulting
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