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WHITE PAPER: Why You're Failing to Get Repeat Business

6/9/2020

 
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Opening Salvo:
Consulting, it’s the next big business opportunity frontier.  From 2011 to present the consulting industry grew by 4-5% YOY on the coattails of increasing supply and demand.  More people than ever on record have transitioned out of traditional career roles in the last 15 years to chase the ‘gig economy’ (increasing supply) while companies themselves have developed a steady dependency (increasing demand) on using external support to ensure their operations run effectively and efficiently.
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While this sounds encouraging, an unexpected outcome of this growth has left many customers with buyers remorse.  As more people enter the consulting game the varying levels of experience, service, costs and related outcomes has left customers in a predicament.  With a multitude of options now available to companies looking for help one of the biggest challenges afflicting buyers is how they will find the right support while ensuring the money they’re paying for it results in a positive outcome.

Author: Travis Smith

​To view the full article click on the download link below:
Why Youre Failing to Get Repeat Business Square-1 Engineering White Paper.pdf
File Size: 729 kb
File Type: pdf
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Monday Quickie - How to Establish Your Consulting Price

8/5/2019

 
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The demand for consulting is up, way up! 

The US consulting marketplace has grown consistently over the past decade.  In the last three years, 2015-2018, consulting services have increased upwards of 25% bringing it to an estimated $68.5 billion U.S. dollars.

Demand is up and so is the desire from the US workforce to provide the service. 

Whether you’re new to consulting hoping to dive in to get a piece of the current demand for consulting services, or you’ve been consulting for years, you’ve inevitably been challenged with the thought…

“How should I charge for my services?”

Here we’ll give into a quick and straightforward guide for establishing your consulting fees and the things which need to be taken into consideration before settling on your pricing approach.

#1: Research the local marketplace – it is imperative you understand what the marketplace yields for the consulting services you plan to offer this way you have an understanding of how you fit in with your competitors and their respective offerings. Best way to obtain this information is to ask others in the business, attend events and get quotes from others in similar lines of work.  While you always want to make sure you’re getting paid for what you’re worth, you also need to be cognizant of pricing yourself out of the game.

For example, in Irvine, CA there is a large supply of people offering mechanical engineering design services. Baring any unique or niche expertise the average mechanical engineer consultant charges anywhere from $50-80/hr.  If you’re charging $125/hr for similar services you may find yourself missing out on projects with potential clients because the end user, or client, has too many other reliable and capable consultant options to choose from at rates cheaper than your offering.

#2: Fixed cost vs. time & materials – you’ll need to decide up front what type of pricing strategy you’re going to use.  Fixed cost is when you charge a flat fee or a ‘not to exceed’ fee for work you’re performing regardless of the amount of hours it takes you to get the job done.  Time & materials pricing structures price based on the amount of hours it takes to complete the job.  Read more HERE.

#3: Long game mindset – your pricing should reflect both your experience, capabilities but also your willingness to get repeat business from your clients.  If your rate is higher than the average marketplace rate for similar service you may still be able to get work, however you may find the client doesn’t pick you for additional work or longer projects.  Remember, the higher your rate the higher the clients expectations will be on your performance and the further scrutiny you will receive on your work output. 

#4: Know your profit margin – it’s important you understand what potential profit you stand to make for each project.  Profit is what keeps you growing and stable long term.  If you’re constantly breaking even you leave yourself at risk for unexpected downturns and other things out of your control.  Establish an ideal profit margin per project you want to achieve and incorporate that into your pricing.  Learn how to establish a profit margin HERE.

#5: Flexibility is key – clients like working with consultants that are flexible; if you’re too rigid with your pricing you may find you’ll lose out on opportunities in the long run.  Try pricing your work based on the difficulty of completing the task.  Perhaps you have a minimum threshold you’re going to charge per hour (say $100/hr) and then based on the work you’re potentially taking on you will scale your price upwards by 25%.  It’s not uncommon for consultants to have a pricing menu based on the range of their capabilities and difficulty to perform the work at hand.  We suggest not using a ‘one size fits all approach’ for pricing your services.

#6: Know what you need – while you should never price your consulting practice based on your personal lifestyle (clients don’t care how big your house is, what car you drive or what your bills are so they certainly aren’t going to pay you more just because your lifestyle requires it) it is important to know what you need to be charging in order to meet your personal financial obligations.  Once you know this number go back to step #1 in this article to see if your pricing number is in line with the general market.  Don’t charge more just because you need more to live.  Clients can smell that from a mile away and it’s a big turn off. 

Key Takeaway:
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Pricing should be based solely on the value you provide.  Your consulting price should have flexibility built into it while keeping in mind the difficulty of the work being performed.  Ensure you know how the marketplace is operating and what others are charging for similar services so you can be competitive with your offering.

Action Item:

Meet 3-5 people in the consulting space which is similar in nature to yours.  Learn about their offerings, how they go about pricing their service and what challenges they’ve had with clients specific to pricing.  The more you can learn from them ahead of your own efforts the better off you’ll be when it comes time to present your price in front of a potential customer.
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Monday Quickie - 6 Ways to Obtain More Clients as a Consultant

7/15/2019

 
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Are you dealing with the rollercoaster highs and lows associated with being a consultant? (aka gig, freelancer, solopreneur, etc.)

Feast and famine.  One week you’re hot, one week you’re not.  You’ve got more work than you know what to do with, the stars have aligned and everything is grits and gravy in the world.  So busy you haven’t had time to think about a future in which you aren’t busy.

Then it happens.  Projects finish up and projects fall through.  Before you know it you’ve got nothing.  A big fat zero.  No billable hours, no active clients, and then it sets in “I’m going to need to somehow find new clients”.

The highs and lows of consulting can be a challenging emotional rollercoaster, especially if you aren’t used to it and plan accordingly.

It’s for this reason all consultants must keep in mind where their next revenue stream is coming from.  Sales is an inevitable part of being a consultant, it will always be a factor, regardless of how long you’ve been consulting and or how great you are at your particular trade.

Want to obtain more clients?

Follow these steps and you’ll find your consulting practice and the general emotional state to be much more consistent and in line with your hopes:

1. Sell Yourself Consistently - This isn’t really an option, it’s a must.  Don’t like sales?  If you can’t do sales you’ll need to find someone who can on your behalf, or find a new job. Consistently selling yourself, even while on projects, is paramount to your long term success.

2. Referrals – Ask your connections for recommendations or openings to new relationships; when you finish a project ask that client for a referral to another.  Happy clients are happy to do so. 

3. Make Friends with the Middle Man – There are services (like my company), companies and online platforms (like Flexjobs) which act as a ‘middle man’ between the people who do the work and the companies which need the help.  Find a business which specializes in your work and build a relationship with them.  This will eventually help bring you additional work, often times outside your sphere of relationship influence.

4. Case Studies & Testimonials – Create marketing materials which can be used online or as hand outs covering the work you do, projects you’ve done and how you can help people solve their problems. 

5. Know Your Customer – The more you know what your customer(s) need the easier it will be for you to get more work from them.  Often, the first project with a client isn’t the biggest need they have.  They give you small projects to test your abilities to execute and solve their problems.  Execution is everything.  Once you do so, ask about other business challenges they’re experiencing and figure out a way to help them with it, even if it means you can’t do the work yourself but can refer them to someone who can.  You were still a part of the solution – your client will remember that for future needs.

6. Network – Get out of your house, office and comfort zone and get involved with the industry you service.  If you’re in the life sciences industry there are two dozen events every month in southern California to participate in.  Pick a couple and commit to going.  Networking takes time to build trust and rapport with potential clients however it can be incredibly lucrative in the long run.

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Monday Quickie – How to Determine the Difference Between Good and Bad Consulting Projects

6/10/2019

 
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When talking with a customer about their project support needs, do you use a formalized approach or do you just wing it?

​Interestingly enough, I was amazed to learn recently that the vast majority of consultants (including solopreneurs) don’t utilize a formal process for collecting information when talking with a customer about a project.  As I began asking more questions I learned that this was a habit across the board, regardless of the amount of years of experience the consultant has in business and or their consulting practice.  The conservative side of me wanted to run for the hills hearing this.

Working as a consultant offers a lot of flexibility, however within this flexibility comes lots of room for alternative view points, ambiguity and of course misinterpretation.  When things are loosey goosey we open ourselves up for further opportunity for projects to fail, missing the mark or leaving one or both parties with a sour taste in their mouths at the end of the project. 

One of the best things I learned early in my career from a more experienced person I worked with was the importance of being disciplined in using a standardized system of help in the information gathering discussions when talking with clients.

Why?

​Because if you don’t it’s amazing how quickly people can interpret things differently than what we had assessed, thought or even heard.  What’s worse, is a simple misunderstanding up front at the beginning of a project or relationship can boil up to big issues down the road, including legal actions.
For these reasons I use, and always suggest consultants use, a formal process for evaluating, qualifying or assessing project opportunities with customers.  This meeting or discussion between supplier (consultant) and customer can be referred to as an ‘intake meeting’, ‘scoping a project’, ‘project qualification’ or ‘project discovery’.  They’re all designed to do the same thing – ask questions to obtain information.

When you’re in a discussion with a customer about their project needs you’re really trying to figure out one thing – is this the right project/ business opportunity for me to take on?

The answer to that question is buried in a flurry of Q&A, best served up using a formal approach where we learn about our customers’ needs, thoughts, feelings and desires for the project and work ahead.

Creating a project qualification process document (SOP) before you begin discussing projects with customers ensures you will gather all the information upfront in a consistent manner.  This will also lessen the likelihood of you having to go back to ask the customer for foundational questions to better understand the project.  Here’s some good questions you could use in your project qualification discussions to determine if this is the right work to take on and customer to work with:
  1. Why do you [customer] have this need at present?
  2. What have you [customer] done so far to address this need?
  3. Is there a date the work needs to be done by?  What happens if that date isn’t met successfully?
  4. Who is the person who makes final approvals for this project?
  5. Is there an approved budget already associated with this project and utilizing a consultant?  If so, what is the budget?
  6. What does successful project completion look like?
  7. What does an ideal partnership look like between customer and consultant?
  8. Are there any other departments or key stakeholders involved in this project?

Keep qualification discussions to no more than 30 minutes if possible.  As a consultant your most precious asset is your time.  All to often customers will spend time talking about things that have nothing to do with the project and or work they’re requesting your help with.  Set the tone at the beginning of the discussion indicating you have 30 minutes to talk through their project needs, then moderate the discussion from there on out.

Think like a consultant – not an employee.  Employees have to do the work their employer asks of them, this is not true as a consultant.  Your job is to listen and provide feedback.  If what the customer is asking for doesn’t add up or isn’t feasible it’s your job to guide them to an alternative solution and or walk away from the opportunity.  Consultants advise and perform the work as an SME.  Be wary of situations where customers are asking you to perform a miracle.  Projects must be grounded in reality, otherwise you may end up as the one to blame.

As you wade through the project qualification discussion with your customer it’s advisable to be on the look out for the following challenges:
  1. How will you and customer addressing scope creep up? (talk about this early because the likelihood of it happening is HIGH)
  2. How does the customer view suppliers?  (do they treat you like a valued partner or someone to do their bidding and dirty work?)
  3. Is the customer realistic in their expectations? (if not, sometimes the best thing you can do is walk away from the business opportunities rather than trying to change it into something it will never be)
  4. Are you purely acting as a ‘work for hire’ or does the customer have hard deliverables you need to meet?  Are there repercussions for not meeting those deliverables?
  5. What would happen if you were mid-project and your point of contact at the customer left the company or had a situation taking them out of work? 

As you begin to formulate your approach to these discussions and questions it’s highly advisable to jot it down on paper, creating a template or checklist you can use each and every time.
Should you get through the project qualification stage and both you and customer are interested in moving forward to the next stage make sure you put everything in writing that was covered during the qualification discussion.  Be specific and direct.  Your Statement of Work (SOW) is the backbone of your project and incredibly important in outlining expectations, performance and what happens if changes need to take place during the project.

Key Take Away:
As a consultant your most precious asset is your time.  Use a formal and formatted approach to your project qualification discussions with your customers to ensure you collect the right information up front to better determine if the project in question is the right opportunity for you.  Can you deliver the goods inline with the customers expectations?

Action Item:
Create a project qualification template or scoring matrix to use in your customer discussions to obtain all the information needed up front for the project.  This removes all the guess work.  Your template should include both exploratory questions to get your customer talking and sharing with you the in’s and out’s of the situation while also simple ‘yes’ and ‘no’ questions like “is this project approved?.  Once you’ve completed the discussion with your client tell them you will get back to them after you’ve had an opportunity to digest the information you gathered.  This will give you time to allow the information to sink in, time provides perspective.  Sometimes a scoring matrix can be really beneficial in this situations especially if you have multiple project opportunities with multiple customers because it allows you to objectively rank each project opportunity against one another.  Pick the best or most lucrative projects and say adios to the others.
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How to Overcome Project Bottlenecks and Missed Deadlines

4/1/2019

 
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When was the last time your team, or company for that matter, delivered a project or product on time?
 
Sounds like an easy and obvious question to answer however the reality would surprise you.
 
Failure to deliver the goods, on time and to expectation, happens much more than most of us realize.  In fact, we’ve become accustom to our expectations not being met, so much so that we barely even notice it anymore.
 
UPS and FedEx are heralded as two of the best shipping and freight companies globally.  The two combined do more than 24 million daily shipments on average.  That’s a lot of Amazon orders.  Did you know that a combined 19% of those packages don’t make it to their designation on time, or at all?  That’s 4.5 million packages miss the mark, EVERY DAY!
 
You may be thinking, “Why should I care about what happens at FedEx, after all I don’t work there.”
 
Missing deadlines, or delivering the proverbial goods late, is more than just a shipping issue, it’s a global business issue and frankly it’s very bad for business. 
 
When we miss deadlines, or customer expectations for that matter, we experience all sorts of negative exposure, including:
  • Other internal projects that get backed up causing a work bottleneck
  • increased stress at work
  • customers that become irritated or take their business elsewhere
  • increased costs to meet original demands
  • loss of revenue
  • sullying of you or your company’s reputation
  • loss of trust within the company or customer
When UPS or FedEx misses a delivery or puts a package back in que which should have already been delivered the ripple effect created for that driver and route can impact an entire days’ worth of work, or more.
 
Same thing can be said for our customers.  We got a call two weeks ago from a customer asking for help on a project of theirs which had already missed its deadline.  Our customer, was two weeks past due on their product delivery date for their respective customer.  Needless to say their customer was less then enthused.  In fact, every day they fell behind in shipping their product they lost 11k USD in billable revenue. 
 
With costs surmounting quickly eating into their profit margin their customer also became wary of their ability to execute as they had hoped and expected.  Phone calls between the two companies became increasingly frequent with the client becoming increasingly upset.  Threats of the white-collar kind became a start to each call.
 
Not a good position to be in. [thanks Captain Obvious]
 
Our customer asked us to bring a team in and offload some of their work, mostly protocol and process related, so they could focus all their efforts in satisfying the commitment they made to their customer.  Our team was to alleviate the bottleneck of work they were experiencing so other internal projects wouldn’t keep backing up as they had already begun to do.  Once the bottleneck begins its incredibly challenging to get out of that rhythm and back on track without extra help.
 
These types of moments are highly intense and stressful.  One of the things our customer did with their end customer, which I found to be of high integrity and good professionalism, is they painstakingly told their customer what had happened to make them fall behind, apologized and took ownership for the failure to deliver and immediately shared with the customer their course of action to solve the problem.  While their customer was rather upset along the way they did acknowledge the apology and things seemed to get underway shortly thereafter.
 
The product ultimately was delivered 3 ½ weeks late of schedule costing our customer close to quarter of a million dollars in missed revenue.  Tough lesson to learn on the importance of hitting deadlines and meeting expectations.
 
Key Take Away:
A wise person once said, “sh** happens”.  A profound statement to say the least yet certainly true.  Sometimes things do happen that are out of our control, taking ownership of the situation and asking for help can be the best two decisions we can make in these moments.
 
Action Item:
Don’t decide to ask for help when you’re already in hot water.  If you’re watching your project timelines begin to slip immediately put in a plan of attack to lean on your suppliers for help.  If your relationship with your customer is on good footing still you can try to proactively ask for an extension on the delivery date with the hopes that will provide some cushion to get work done on time.  Note – don’t get in the habit of asking for deadline extensions.  Once is fine, but to ask that of a customer often signals your company is unorganized and lacks leadership to meet it’s obligations.
 
In need of someone to help you climb out of your project bottlenecks?  Contact Square-1 Engineering at www.square1engineering.com to learn how we can help your solve your biggest engineering and technical business challenges.
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    About the Author

    Travis Smith is the founder and managing director of Square-1 Engineering, a medical device consulting firm, providing end to end engineering and compliance services.  He successfully served the life sciences marketplace in SoCal for over 15 years and has been recognized as a ‘40 Under 40’ honoree by the Greater Irvine Chamber of Commerce as a top leader in Orange County, CA.

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    • Consulting >
      • Product Development
      • Regulatory and Quality Compliance
      • Validation
      • Manufacturing Engineering
      • One-Day Gap Assessment
    • CAD for Medical Devices
    • Technical Training >
      • Medical Device Training
  • Project Execution
    • Case Studies
    • Problems We Solve
    • How We Engage
    • Project Expertise
  • About Us
    • Vision & Mission
    • Our Team
    • Careers >
      • Careers - Marketing Generalist
  • Resource Library
    • Medtech Snapshot Podcast
    • White Papers and Articles
    • Southern California's Medical Device History
    • Recommended Business Reading
    • The Business Wingmen Podcast
  • Contact Us