Succeeding in Your Business: The three keys to success in a service business
A lot of downsized executives from corporate America are looking to start consulting practices these days, and a majority of them want to go back to corporate America and pitch themselves as “independent contractors” doing the same old job they used to do as corporate employees.
A lot of them are disappointed, though, when they find out their old companies won’t hire independent contractors to do these jobs because these jobs either are no longer necessary (due to advances in information technology) or are so sensitive that they can be handled properly by full-time employees.
Still, it isn’t impossible to work for corporate America as an independent contractor or 1099. You just have to be a little more flexible in the type of work you accept.
A frequent complaint I hear from consultants-who-were-once-corporate-executives is “Gee, I am getting work from corporate clients, but the projects are really dogs, the lowest of the low, involving long hours and really mind-numbing detail work.”
Well, here’s a news flash for you: Corporations (such as all customers) don’t want to delegate the fun stuff. The work that’s enjoyable, fun, sexy, state of the art, groundbreaking, career enhancing, etc., etc., is precisely the work that will be kept in-house. Tell me, if you really enjoy working on cars as a hobby, do you let someone else work on your car?
This seems so elementary, but you’d be surprised how many people forget it.
Take me, for example. It says “business attorney” on my business card, so what do you think people pay me for? Lofty advice and research on complex legal questions? Sophisticated business advice that I offer while attending my clients’ board meetings?
As the comedian Steve Martin used to say, “Naaaaaaaaah ...”
What people pay me for is document production — the ability to churn out legal documents on relatively short notice to engrave in stone the business deal they’ve spent weeks putting together and negotiating with other people. ClientS never ask, “Cliff, how should I structure this deal?” What they ask instead is, “Cliff, we’ve struck a deal with XYZ Co. We’re emailing the term sheet over to you now. How long do you think it will take to get the legal documents done?”
Basically, I’m in the “documents on demand” business, as far as most of my clients are concerned (there are exceptions, of course).
Why are clients willing to delegate this work to me and pay significant amounts of money for me to do it for them? Well, let me answer this question with another: Wouldn’t you? I mean, do you really enjoy staying up late every night wordsmithing complex business agreements in technical legalese, knowing that if you get one word or phrase wrong, the whole thing could come tumbling down on someone’s head and you could be sued? Of course not! Nobody does (not even moi). But the job has to be done, and it has to be done well, and therein lies an opportunity for someone like me.
This brings us to the moral of this week’s column. If you truly want to be successful running your own business, especially a service business such as mine, the path to success lies in three easy steps:
Step One: “Find a dirty job...”
Step Two: “... that has to be done but that no one wants to do.”
Step Three: “Charge lots of money for doing it.”
You may laugh, but it’s really that simple. People (and corporations) don’t delegate the work that’s enjoyable. What they will delegate is work that’s tricky, detailed, painful, boring, mind-numbing, risky and generally unpleasant. You will never make money asking people to pay you for stuff they enjoy doing. You can make TONS of money doing the stuff they won’t dirty their hands with.
This brings us to one last point. Every once in a while when you are pitching consulting jobs to corporations, you will get the sense that the project you’ve been asked to work on is impossible to complete on time and within budget, to the point you start to think you have been deliberately set up to fail.
In my experience, every company or client has at least one project that is politically sensitive within the company and has a high probability of failure no matter who does it. Such a project, if not done 100 percent perfectly, will cost someone within the organization their job. It makes sense to hire an independent contractor to work on such a project because if they fail, they simply don’t get paid and will never work in the company (or perhaps the industry) again, and no one within the organization loses their job.
If you sense that a client is offering you such a project, I would suggest not taking it if you value your reputation. If you are desperate for income or are willing to take the risk of failing on such a project because your failure isn’t likely to make Page One of the industry newsletters and “no one will ever know,” I have one piece of advice for you: Charge several times what you normally would charge for other projects. If the client is indeed setting you up to fail, and the people you’re dealing with are desperate to unload — I mean, delegate — the project to an outside consultant, they shouldn’t get a bargain on top of it.
Make them pay, make them bleed money, make it worth the misery and don’t apologize — you are performing a truly great service for that company, and if they’re the right kind of people, they will appreciate it.
Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series “Money Hunt.”
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