How “We’re booked” was ruining our business
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There's a few other options, too. There is no zeronary Consultancy#are_we_booked? method. It's ternary: Consultancy#are_we_booked?(price, schedule, scope). For a price you can virtually always take on a new client starting tomorrow. (I mean, you can't physically be on two continents at once, but if you're scheduled in New York one week and a client in Germany wants the same week, if they're willing to pay 5X what New York is, then you call New York and say "Hey guys, have I got a proposition for you: how about we delay this engagement N weeks and in return I'll discount 20% off the invoice.")
You probably retain scheduling flexibility with clients unless they pay extra to get scheduling predictability (p.s. ask Thomas about this in more detail, it's a great hack), so if you're scheduled above 80% and a lucrative gig comes in, you might be able bump everything back N weeks without blowing any windows even without having to renegotiate things, especially if you are capable of hiring and ramping someone in that time. That is, of course, the ultimate consultancy scaling mechanism.
P.S. In parallel with any, all, or none of the above advice, if you find yourself above 80% utilization, raise rates.
It seems like Sales as a service exists at least with Elastic. Does anyone have experience with how that works as a replacement for a full-time technical sales person?
1) Curves of supply and demand. If your demand outstrips your supply, increase your prices until you lose ~50% of the pitches you go for, on the basis of price alone.
2) Sell. Sell sell sell sell sell. Don't worry about your capacity today. Worry about your capacity tomorrow. Give N month lead times for commencement (people will live with this if they want you badly enough), take a deposit, and use it to hire.
It's a bit of a razor's edge to run, as if you're not careful you'll find yourself under-resourced, delivering late, and fucking your reputation in the behind with a broomhandle. If you are careful, and you model out your resource needs based on past performance, you can anticipate your resource needs to fulfil your demand, and you'll grow like a whale on steroids.
I like obtuse allegories.
Raise your rates.
Another thing that is true of many professional services businesses: clients hate it when you say "No", and unless they have a process in place to balance work across multiple vendors, will prefer vendors that reliably say "Yes" to all their project requests.
Good luck, welcome to the big leagues.
When it happened to me, I went from solo freelancer to hiring 6 full-time engineers, which essentially means I created an agency.
It was great. The only challenge then, was convincing clients who'd hired me specially, that "someone else from my team may work on it, but the quality will be just as high."
The worst-case scenario: If you take on too much work, you may end up delivering late. Usually not the end of the world. But if that's not an option, you'll still manage to find a way.
This is another viewpoint to the same morale in the article...
No matter how busy we are, I never say "no" to an opportunity to talk or sit down to coffee with new people, whether they be a potential client or just someone seeking advice. I'll even go through the discovery phase and estimate/quote out their project, and only after the quote do I bring up our timeline. Most of the time, they are fine with the timeline (though I've always found a way to make it sooner than "next year", usually a few months out at most). If they need it doen sooner, then I'll find a way to get it done with our partners by sub-contracting. The rest have been fine with that. If they weren't, then I'd simply help them find someone else who can do it.
It's worked pretty well so far. But I can attest, it is very hard to go talk with someone for an hour when you know there's actual work you should be doing. I feel the same way though when I'm doing taxes or keeping our books. They have to be done. You just do it anyway.
I've started charging for this process. Partly because otherwise I'd spend all my time consulting for free, partly because it's a huge value add to their business, and partly one-to-many "oh great, thanks for estimating this. I took it to your competitor and now they're willing to underbid you by $5K because all the hard work is done for them." scenarios.
That being said, it usually only takes us another couple hours to quote a project once we've gotten to that stage, and we have started billing for it when it seems like it will take longer, or if they want more detail or revisions.
There's nothing wrong with creating a job for yourself, but know that it's not the same as a business even if you call yourself a business.
This meme has little entanglement with reality. A one-man consultancy's chief concerns are almost entirely alien to a W-2 employee's chief concerns: as a W-2 employee your chief economic objectives are work-performance, as a consultancy your chief economic objectives are almost certainly external to the actual delivery of your professional skills. A one-man consultancy can unilaterally offer themselves a pay-raise of 25%+ every 6 months if market conditions support it; this happens in vanishingly few salaried jobs. A one-man consultancy can build intellectual and other forms of capital which are absurdly portable; this is possible as a salaried employee but their access to capital formation is markedly inferior. (For example, it is exceptionally difficult as a salaried employee to licitly walk away with your employer's take on your core job function and then implement it for competitors. That's pretty much the default in consultancies, and deviating from it costs the client extra money.) A consultancy has significant work-related expenses in a way that a salaried employee does not. A consultancy has a vastly more complicated tax, compliance, insurance/risk-mitigation, etc etc, situation than a similarly situated employee.
Perhaps most relevant to someone who thinks headcount is the only meaningful way to scale things: a consultancy, even a one-man consultancy, even a one-man consultancy which outside observers believe is impossible of maturity required to scale, has a permanent call option on growing headcount.
Now it's great to quote a really high rate when you're totally booked because there is almost no risk but then it can be challenge when the client then accepts it.
Two points I would add to the discussion are:
1) that in addition, or in lieu of raising rates consider lengthening the project time-line. You can often push a project out further in time which both softens the expectations and gives you more time to deliver quality and deal with more iterations.
2) to take the time to feel out the client. If you are really in demand and becoming overbooked the LAST thing you want is a terrible client who can potential swamp your resources. Work only with people who will respect you and your team and never settle on this even if it means you can make more money. It can be worth the extra 2 or 3 meetings before a work agreement to see if you will have a productive relationship before committing to the project. Being over-busy is a great opportunity to be picky about the projects you decide to take on.
That's not how business works.
Don't ever stop Biz Dev even if your publisher LOVES you.