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	Copyright 1995 by Seann Maxwell.  All Rights Reserved.    
    
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	16 BIGGEST MISTAKES CONSULTANTS MAKE   
		AND HOW TO AVOID THEM!    
   
		by Seann Maxwell, B.Eng., M.Sc.    
    
    
	Through personally generating more than $20 million in fees over   
more than 25 years as a consultant and advising other consultants on how   
to develop and build their consulting businesses, I have discovered that   
many competent consultants lose thousands of dollars in fees through   
committing one or more of these 16 biggest mistakes.    
    
	I would like to share some with you of what I have learned.    
    
	It s wise to point out that seemingly small things can make a big   
difference to your success as a consultant.  You can increase your income   
by 25% and more by eliminating or adding something presumably simple.    
None of the ways to fix these 16 BIGGEST MISTAKES outlined below   
are difficult to do; BUT, you need to implement them to reap the benefits.  
  
	Consultants reduce their opportunities for big success WHEN   
THEY DO NOT:    
    
1)	Adequately define their unique qualities in terms of  capability   
	statement, brochures, market position and credibility in their chosen   
	field.    
    
	Unless this is carefully and consistently done, a consultant will not   
stand out from the crowd in a client s mind.  Without anything unique to   
evaluate the consultant by, the client is then forced to use price as the   
principal basis for selection.  Not only does this preclude the opportunity   
for negotiated agreements and a reduced opportunity for higher fees, but it   
can cause assignments to be lost through competitive bidding.    
    
  2)	Precisely define who their prospective clients are.    
    
	This a marketing fundamental, but many consultants I have known   
do not develop enough detail about their prospective clients.  While they   
may know their industry, they may not have not selected their top 30 target   
clients.  They may not have identified the key decision makers (KDMs) and   
key decision influencers (KDIs) within those target firms.  When duck   
hunting as a teenager, I learned to not shoot at the flock, but instead at a   
specific bird.  It s the same with consulting.  Successful consultants select   
their top target clients and then learn everything about them.    
      
3)	Develop and market tangible service products.    
    
	It is easier to sell a tangible product than an intangible service.    
WHY?  Simply because the buyer knows what a tangible product will   
deliver at the time of purchase; whereas, with an intangible service, the   
benefit is usually delivered well after the purchase decision is made.  The   
more tangibility a consultant can give to his/her services offered, the more   
the services are packaged to appear tangible to the client, the higher the   
probability for success and the higher the fees.      
    
 4)	Focus on relationship marketing.    
    
	Effective consulting depends on good communications and trust   
between client and consultant.  After all, do we not all prefer doing   
business with someone we know and have confidence in?  Of course we   
do!  The consulting business is no different.  Successful consultants do   
everything in their power to create and maintain successful relationships   
with the KDMs and KDIs in their target marketplace.    
    
 5)	Understand how to calculate the right billing rate.    
    
	These seems to be basic. Yet, I cannot tell you how many times I   
have seen new and even experienced consultants fail to understand the   
basis for calculating the right billing rate.  You must know the basic cost of   
doing business, just as you must know the minimum billing rate for your   
services.  Few consultants survive for long if they cannot command at least   
two times their desired hourly wage.  For example, if a person wants to   
replace a $50,000 per year salary through selling consulting services,   
his/her minimum billing rate needs to be at least $50 per hour to account   
for payroll benefits, overhead, expenses, non-billable time, marketing,   
travel, communications, vacations, professional development, profit, etc.         
    
 6)	Become an authority in their field.    
    
	Through failing to position oneself as an expert or an authority in   
the chosen field of expertise, a consultant misses many opportunities for   
assignments and increased fees. After all, a consultant is essentially a   
problem solving resource to a client.  The more credibility that can be   
attached to a consultant, the more consistent the assignment flow. This   
demands creative thinking, the ability to gather publicity for oneself and   
doing outstanding work for clients who can give referrals to their friends   
and associates.    
    
 7)	Track prospects and forecast revenues.    
    
	Even experienced consultants often fail to have an organized system   
for tracking prospects and forecasting revenues.  Over the years, I have   
used a simple system based on a spreadsheet which accurately forecasts   
quarterly or annual revenues while allowing each prospective assignment to   
be tracked and followed up.      
    
	This system gives your consulting business an easy and effective   
way to:    
	- identify and follow prospective assignments    
	- predict sales revenues    
	- know if you are tracking enough prospects to deliver the revenue   
	goal    
	- predict when assignments are likely to materialize    
	- use the information produced in personnel resource planning    
	- organize your marketing efforts according to clear priorities     
    
8)	Write winning proposals.    
    
	Many consultants lose assignments because they do not put enough   
time, creative thought and preparation into writing winning proposals.    
Some years ago, I had the opportunity to review hundreds of proposals   
which technical consultants had submitted to the Asian Development Bank   
in Manila, Philippines.  I was amazed at how poorly done the majority of   
these proposals were.  My observations indicate that even now many   
consultants could benefit from upgrading the quality and presentation of   
their proposals.    
    
	A winning  proposal culminates of all your marketing efforts to   
date.  Successful consultants are superb proposal writers.  They put their   
effort only into creating winning proposals, not into those that lose.  Before   
starting to write a proposal, they:    
	a)	build good rapport with their prospective client    
	b)	carefully define the scope of the assignment with the client    
	c)	clearly understand the client s objectives and associated 	  
		budget    
	d)	agree about the proposed fee arrangements.    
    
	A winning proposal is a coherent, carefully structured selling   
document which convincingly persuades your prospective client that: you   
know what he/she wants done, you can do it, and your price falls within the   
budget.    
    
9)	Precisely define an assignment s scope of work.     
    
	Starting to work on an assignment without a clear understanding of   
the scope of work between the client and consultant is one of the greatest   
causes for later client dissatisfaction.  After all, if you don t know what the   
client wants, how can you deliver it?  What the client wants is not always   
clear.  Successful consultants spend the time needed to precisely define the   
scope and terms of the assignment with the client.  They then commit this   
to paper prior to ever starting work.      
    
	Sometimes, a consultant is used to define the scope of an   
assignment.  This is a different case and usually involves different terms of    
payment.    
    
10)	Pay attention to gut feelings when selecting clients.    
    
	I have found my intuition to be the best judge of a potentially   
successful or bad relationship with a client.  Whenever in the past, I   
overrode my gut feeling about a client and went ahead with the project, I   
invariably ended up with problems completing the job or collecting my   
fees, and feeling bad about the client.  No one benefits from this kind of   
lose-lose situation.    
    
	I no longer take assignments unless I like the client.  Not only does   
this makes the assignments more fun, but I get paid and everyone remains   
happy. Having this flexibility to select your clients is one of the great   
benefits of being a consultant.   
    
11)	Cover all work performed with an agreement.    
    
	Sometimes, we re so eager to get started on a project, that we fail   
to document the scope of work, the schedule, the terms of payment, etc. in   
a written and signed agreement. At times, even experienced consultants   
make this mistake.  Without an agreement, a consultant has very poor   
grounds on which to resolve any questions concerning the scope of work,   
schedule, terms of payment or collection of an outstanding account.    
    
12)	Work on the client s money.    
    
	Not getting paid your fee for work done for a client is arguably the   
worst thing that can happen to a consultant.  I believe it is better to not do   
any work for a client than to work and not get paid for it.  If I am not   
going to get paid, then I would rather be out marketing for new   
assignments or working on my own projects.   
	  
	In my early days as an independent consultant, I was owed several   
hundred thousand dollars by a few clients.  My business nearly floundered.    
    
	Not wanting to repeat that experience, I now work on a retainer for   
all my projects.  The first month s fees are collected and held as retainer,    
Invoices are submitted every two weeks or at the end of the month.  The   
retainer is credited to the client s account and accounted for at the end of   
the project.  Clients readily accept this practice.  Since adopting it, I have  
always collected my fees.    
    
13)	Restrict their available time to one client/project to 50% or less.    
    
	Consultants who commit more than 50% of their time to one client   
or one project put too many of their eggs in one basket; thereby losing   
flexibility, a great deal of independence plus objectivity, which is often   
what a client is paying you for. You risk  your business should you lose   
that client. And when the project ends, you may find it takes a long time to   
get your next assignment.    
    
14)	Observe the service product/market risk matrix when trying to   
	grow.    
    
	I have seen lots of consultants try to expand by introducing a brand   
new service product into a brand new market.  This almost always results   
in an expensive failure because they have ignored the product   
service/market risk matrix which clearly shows that introducing a new   
service to a new market entails the highest risk.  It s much better to follow   
a less risky approach by introducing an existing service to a new market,   
and to become familiar with this matrix as you plan your business   
expansion.      
    
15)	Maintain active marketing efforts even when fully booked.    
    
	This is another expensive mistake made by consultants, and one of   
the most difficult to overcome.  A client sometimes wants all of your time   
to complete a project on a tight schedule, and since money is involved, you   
may be inclined to go along with this.  I encourage you to accept the   
project but never, I repeat, never commit more than 50% of your time to it.    
If needed, find some other consultants to act as sub-contractors.  Also, keep   
in mind that successful consultants devote at least 15% of their time to   
marketing, even when they are at their busiest.    
    
16)	Give special treatment to long term clients.    
    
	It is so easy to start to take long term clients for granted, thinking   
that they will always be there to give you assignments.  NOT TRUE!    
Every client is special and should be treated that way, no matter how many   
assignments you have done for him/her.  I have seen clients give assignments   
to another consultant just because they were tired of being taken for   
granted.  Simple things like not promptly returning a phone call can lay the   
seeds of  dissatisfaction, and open the door to you losing the next   
assignment from a client.    
    
	Use the tips outlined above to avoid these 16 big mistakes and you   
will  undoubtedly create more financial success and enjoyment in your   
consulting business.      
    
				###    
    
HELPING CONSULTANTS BUILD A BETTER BOTTOM LINE    
    
	For over 25 years I have provided my expertise to help professional   
consultants and other service providers build a better bottom line through   
more effective strategic planning and marketing.  Having founded a 20  
person consulting organization and also been a  freelance consultant, I  
believe I now know what it takes to be successful and what pitfalls to avoid.      
    
	Much of the above was excerpted from my new CONSULT AND   
GROW RICH manual. For additional FREE information about the manual,   
please send e-mail to 74201.363@compuserve.com or contact me directly   
if you have any questions about becoming a more successful consultant.    
    
Seann Maxwell, Maxwell Consultants International    
12729 Northup Way, Suite 25, Bellevue, Washington 98005    
Phone: 206-462-8334			Fax: 206-462-8879    
    
    
 
