When I was let go at age 46 from the firm I was with, I calculated that at my age and income level any new employer would expect me to deliver new business to the firm quickly. If I didn’t I wouldn’t last long. If I did bring in a lot of business, however, the company would keep most of the fees.

The downside risk of setting up my own firm, then, wouldn’t be much greater than working for someone else. But with my own firm, if I brought in a lot of work, I would keep most of the fee, instead of turning it over to someone else. I also wanted to get away from company politics and see if I could do well when I didn’t have others second guessing me. So, I set up my own consultancy, which helps professionals (accountants, lawyers, actuaries, architects, management consultants, recruiters, engineers and the like) learn how to sell.

I have never regretted this decision. My reasoning has been confirmed. I am doing far better financially than I ever expected to and I am happier in my work than I ever was before.

Over the fifteen years I have had my business, I have seen and advised many others who have set up their own firms, largely relating to getting clients, the crucible on which most startup firms succeed or fail. Here are some of the most common mistakes I see:

1) Not Sizing the Market

A surprising number of people don’t calculate the adequacy of a market they plan to sell to prior to setting up shop. This is seldom a time consuming exercise, because one needs only rough accuracy rather than precision. If you have good general knowledge of your market and service, it is more an exercise in logic than a research project. Spending an hour on it can save you from a painful mistake.

Susan, a communications consultant, had asked to meet to establish a networking relationship, which experience has taught me sometimes means that the person making the request is close to desperation. Her fraught look, brow knitted and shoulders taught, confirmed my suspicions. It took all of two minutes to determine that we sold to different markets, leaving little opportunity for the sharing of information and introductions on which networking depends. I sold to large professional firms and she sold to a niche financial services market. I then asked a series of simple questions that determined the following:

• Her market consisted of about 50 companies, about eight of them large enough to buy Service X plus perhaps four Service Y projects in a year. The remainder might buy two Service Y projects, but little else.
• A large client might buy Service X once every five years.
• Service Y was bought on short notice, usually of less than a week, when the client was asked to make a competitive pitch to a customer. After buying Service Y several times, most clients internalized its teachings and stopped buying for several years. Of the several clients making a pitch for a specific piece of business, Susan could only work with one.
• Susan would need two Service X projects and ten Service Y projects a year to meet her basic financial needs—her basic needs.
• She knew of two direct competitors, one with a strong market presence, already. As in most industries, some of the target companies didn’t use consultants as a matter of policy.

The numbers didn’t compute; Susan would have to have a ridiculously high market penetration to earn the money she would need. Demand for Service Y, the more popular service, was so sporadic and uncontrollable that she didn’t dare rely on it. She really wanted to sell Service X. No other service she had offered had interested her clients. Though she could seek out other markets, that would take time. She needed money now. Several weeks later she notified me that she had taken a full time job and given up her practice.

She had known most of the information she gave me prior to setting up shop and could have easily gleaned the rest through an interview or two. But she hadn’t gone through the effort of using this information to size the market. Had she done so, she might have gone after a larger market from the start.

Susan had made one other mistake, assuming that she could sell more to the small firms in her market than proved to be the case. She was right in asserting that they really needed what she offered. Small companies have lots of needs, but lack one important element needed to make them attractive clients: money. Though a few consultants have found ways to make a living off of small clients, most who try it fail.

2) Staying in the Office

When you get in front of clients and prospective clients and talk with them about issues of importance to them, good things tend to happen. If you start your firm and then sit around your office waiting for business to come to you, you won’t succeed as a consultant. This is true, even if you fill your days with designing a website or brochure. Developing business requires getting out into the market place and talking with people.

Many would-be sole practitioners start out with an aggressive call and meeting campaign, but when nothing comes in, they get discouraged and spend more and more of their time in the office. If they don’t reenergize themselves and get back out into the market, this can only lead to failure.

This almost happened to me. About six months into starting my business, nothing was coming in and I found it harder and harder to make calls and ask for meetings. My office was in the house to keep overhead low, and one day I was sitting there, engaged in the useful occupation of feeling sorry for myself, when I heard the front door bang open and the thump, thump, thump of my seven-year-old son coming up the stairs. He burst into my office and said, “Dad, I’ve got something that will really help you!” He held out two old paperclips and a thumbtack that he had scrounged out of a wastebasket at school, because he wanted to help his dad. I hadn’t realized that he was aware that I was worried.

We talked for a bit and then he went downstairs to play. And I went back to my phone and started dialing. After that innocent show of support, failure wasn’t an option. I didn’t care if I had to call 100,000 people to find someone willing to give me a chance. I was going to find him.

In a couple of months, I landed my first big account.

You can’t sell anything if you don’t talk with people.

3) Losing Focus

Unless you start your consultancy with one or two clients in hand, the first months are hell. You feel like you are trying to push a rope. You meet and you talk and you meet and you talk and nothing happens. People you meet with often don’t return your calls. You feel like a doormat. I remember driving over two hours to one meeting, only to have the person I had come so far to see tell me that he could give me only ten minutes.

When the business takes off, it does so rather suddenly. You have been making progress all these months, but it hasn’t felt like it.

During this trek through the desert, many lose their focus and start doing a number of things in hopes of making some quick money. The distraction from their efforts to develop their original practice mean it takes even longer to reach the turning point.

Ed, a friend, started a practice about the same time I did mine. We were both getting anxious from our inability to land clients. Ed became so uncomfortable that he started doing other things to bring in money quickly. In other words he went from starting one business to starting two or three. None of them took off quickly and he eventually took a job at a small university for a lower salary than he wanted.

Meanwhile, I kept plugging away at developing my practice pretty much as I had seen it from the start. In about six months, I landed my first big account and on that frail beginning, built a practice that has served clients in fifteen different countries.

Starting one business at a time is plenty hard. Don’t lose focus and start two without even realizing it.

4) Becoming Captive of One Client

When you finally land your first big account, you feel relieved and joyous. It’s a pleasure to work with a client again who listens to your advice because she is paying you for it. You also know that doing excellent work for this client is essential to establishing the reputation of your firm. You feel a lot more productive doing that paid work than you did looking for clients. There is a tendency to stop looking and to dedicate yourself solely to the paid assignment. Doing so is a huge mistake.

The new consultant who takes herself out of the market place to work for months on a sole account loses all of the advantage she had gained. Out of sight, she is soon out of mind. She is no longer current on her prospective clients’ concerns, which, in turn, makes it harder for her to talk with them.

When the work for the first client finally comes to an end, as it always does, these consultants find themselves right back where they started, with a lot of cold contacts and no hot or even warm prospects. Few firms survive this second trek across the desert. Some go through the painful process, building market awareness a second time to find a second client and then, for a second time, drop out of the market to serve the client. Again and again they do this, the months without revenue between projects stressing them financially and emotionally.

Anthony, a branding consultant with enough charm that maintaining relationships with prospective clients should be easy, does this. Recently, he and I sorted through his marketing to identify the cause of the months on the beech between projects. What did we conclude? He needs to establish call and meeting discipline that he adheres to week in and week out, whether or not he has a current client.

Always guard a day a week away from work billable to a client to devote to finding your next account.
Size your market, get out into the market and talk with people, keep your focus, maintain your call and meeting discipline month in and month out—these are simple messages, easily understood. Some people I talk to brush them off as too basic. They are looking to master business development by understanding something about it that others haven’t grasped. But mastery at selling consulting services isn’t a matter of understanding; it’s the ability to execute the basics day in day out, year after year, whether you feel like it or not, whether you are fully loaded with projects or sitting on the beach. It may not require the intellectual capacity that many consultants feel lies at the core of their competence. But it requires something just as important to developing a successful business; it takes grit.

This is a guest post by Ford Harding. Ford is the author of Rain Making —2nd Edition—Attract New Clients No Matter What Your Field (Adams Media 2008). His blog can be found at www.HardingCo.com/blog.

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