Stand-up comedy

A confession: I perform stand-up comedy on the weird and wonderful London circuit.  I've been going for a few years and I'm starting to get paid for the occasional spot but no one's suggested that I give up my day job.

It's great in so many ways but what I love most is the immediate feedback.

As a consultant I can wait months to hear if my recommendations were effective or if the training program I delivered bore fruit.  Sometimes I never hear anything at all.  The isolating effects of self-employment often feels like I exist in a vacuum.  Stand-up comedy is the exact opposite: the feedback is immediate, binary and potentially brutal.

They either laugh or they don't.

When they don't laugh its horrible.  When they do it's wonderful.  And best of all, it happens in an instant.

A compliment

Recently a long-standing client came to me with what she said was 'an unusual request'. We've worked together on a number of highly successful projects and she's always been challenging but this was something different: she asked me to design and deliver a program to teach her team to be more like me.

Working for yourself you get some good days and not-so-good ones and this was one of the very best.

Beware of 'mates rates'

Let's say I need a new website.  A friend has a web designer friend who has just gone freelance and he gets in touch.  We grab a coffee to chat about what I need and what he offers.  The conversation moves onto the obvious common ground of the vicissitudes of self-employment; there is bonding, even a sense that we're kindred souls.  Inevitably, in the name of our new friendship, he offers to do the work for me at 'mates rates'.

Superficially it makes sense: he's new to self-employment and not all that busy right now.  Thinking aloud he says that there seems to be a synergy between us.  He muses that maybe we could even look to collaborate on projects in the future.

I haven't said a word.  I shouldn't have even agreed to meet for coffee.

Even though he doesn't know it, the deal on the table is that he'll sell me some surplus time in order to buy access to my client list.

What do I get?  Because we're 'mates' I don't get to shop around and compare suppliers because that would imply disloyalty.  I don't get to change specs as my needs change because any move on my part to expand the project will be discouraged: he gets no additional return on the deal for any extra work I need done.

Worst of all I lose the right to insist that deadlines are met.  I know that if a 'real' client comes along I'll immediately drop down the priority list.  I'm left in the perverse position of hoping he's not that good a designer because I don't want him to be busy!

By agreeing to a bargain I give up all the advantages of being 'the client'.  I don't get to expect the level service that I give as a supplier.  The absolute best I can expect of the deal is a decent website done at cost plus a favor owed.  The worst is very, very ugly.

So I don't accept 'mates rates'.  Not from lawyers, accountants, web designers, graphic designers, writers, printers, anyone.

I don't accept them and I certainly don't offer them.

Serviced offices

My last full-time, permanent employee was in 2000.  Since then I have been a one-man band.

A few years ago this unsettled some prospective clients.  They worried about doing business with a supplier so small he couldn't even afford a secretary; 'fly-by-night' was often the expression used.  So companies like Regus made (and still make) good money offering a way around this: the virtual office where someone to answers the phone in your name, sorts the mail and hires out meeting rooms by the hour.

Obviously, virtual offices are all about client perception: letting the little guys appear bigger than they really are.  But I feel their worth has diminished greatly over the last few years because absolutely everyone now knows they exist.  When clients in mainland China start asking if your business address is a 'real office' then no one's fooled by a different voice answering your phone any more.

I still use a Regus mailing address because its easier to deal with some government departments and suchlike if mail goes to a corporate address but I gave up the rest years ago.  I hold meetings at the client's office or hotel lobbies, and once your mobile number gets out that's how everyone finds you anyway.

As a small-shop consultant there is a logical consistency to this issue that clients understand if you explain it properly.  You're hiring me because of my personal brand and our one-to-one connection.  If I put people around me that only puts distance between us.

Seth Grodin

If you're reading this then I'm guessing you're familiar with Seth Grodin's blog.

A recent post he wrote about the 'brilliant specialist' resonated loudly with me as a self-employed consultant.

Trial pricing

A gambit that occasionally appears when I'm negotiating with a new client is the proposal for a 'trial' price.  The idea being that I discount my fee for an initial (trial) project in return for the prospect of more work in the future.  Of course there is no implication that any future project will revert to my normal fee structure.

So what's actually being said to me is this...

1. We don't have enough faith in what you do to pay you properly now, so if you fail we need to limit our financial exposure
2. But if you do happen to succeed then we propose rewarding our own bad faith with a continued discount
   

And the client usually believes that he's doing me a favour!

The assumption underpinning the proposal is that I'm not in enough demand to dictate terms and that it would be better for me to sell my time to them at a discount than sit at home earning nothing.  In short, the client is behaving like a company but treating me like an individual.

If I'm going through a less-than-busy period it's tempting to agree to the deal but the pitfalls are obvious; the best case scenario is that I have to turn down higher-paying work with other clients because I'm committed here.  The worst case scenario is that word gets out and I'm forced down to this new price across the board.

I can't say 'never accept a trial pricing offer' because there are times when they make sense; for example when the client's offer of (a lot) more work equates to a genuine 'discount for bulk' or when your cash-flow is so dire that anything's better than nothing.

But I can say this: it is no one's interest but your own to keep your prices high.  If you don't protect your fee structure no one else will.

Charge at the point of pain

My services are expensive.  For many clients my day-rate is at the absolute upper limit of what they would ever pay any supplier under any circumstances.  When I mention my fee there's often a sharp intake of breath around the table, nervous glances even.  I'm fine with that.  I'm fine with being a line item on a departmental budget requiring an asterisk against it and an explanatory note at the bottom of the page.

But the reason I'm fine has nothing to do with the actual money.  To do my job properly I usually need a pretty big headcount of client personnel in the room; sales representatives if I'm running training and marketing executives if it's a strategic planning workshop.  In either case, my fee is dwarfed by the cost-to-company of putting that many people in the room with me.  

It wasn't always this way: when I started out my day-rate was dwarfed by the room hire.

If I'm perceived as inexpensive then my ability to deliver my product (training, consultancy) diminishes; participants turn up late, step out to take calls and conduct other business during 'my time'.  Entire sessions can be compromised in this way, projects founder and I'm left with a justifiably poorer reputation.  Conversely, when I charge more I get the engagement I need to get the job done.  Once word gets out as to what I'm costing the company everyone magically does what they're asked to.  In the room on time, phones off and focused.  

Pricing can be an effective tool, sometimes the only tool, for creating internal commitment to my project.  My fee should force my contact to go to his boss' boss to get budget sign-off.  Suddenly my guy has to vouch for my quality and I stop being the only person to with a genuine stake in the success or failure of the project.  So now I really have to be worth what I'm charging.  I'm forced to bring my 'A Game' every time because other people are affected by the result.

Pricing

Over the next few installments I want to examine the issue of pricing, especially the question of why it is so hard for many people to ask for money on their own behalf.

When negotiating fees I take a counterintuitive approach: mentally downplay the link between the price I'm charging and what will eventually end up in my bank account.

Because my clients are huge companies, not individual customers, I am never negotiating with anyone with a direct (personal) financial stake in the decision.  My 'opposite number' will get the same paycheck regardless of the outcome of our negotiations.

Of course my client will always be operating within a finite budget but that's a different thing.  Most managers deal with budgets vastly larger than their own salary and so, barring (isolated) instances of outright graft, they treat those budgets as abstractions.  Because big organisations aren't good at rewarding individuals or departments for underspending, budgets are just big numbers there to be spent, or even overspent, by the end of the accounting period. 

What I need to avoid at all costs is the client making the link between his big number and my personal bank account.  The moment he thinks "His fee is about 15% of my annual salary!" then I'm in trouble.

A key tenet of successful fee negotiation is to treat the money as an abstraction, because that's how the client views it.

Marko's mantra

Marko is an Australian writer-actor-director and an old, old friend of mine.  One of his many talents if that he has as much control over an audience as any performer I've ever seen.  Every now and then we work together on 'presentation skills' workshops.

At the core of Marko's performing philosophy is a very simple mantra to be repeated in deep, slow sentences just before you go on stage;

I am Here

I deserve to be Here

I want to be Here

It's all about 'being in the moment', something vital for any performer looking to connect with an audience.

I've found it to be just as useful in other potentially stressful situations like just before walking into the client's office to make that big pitch or getting off a plane in a strange city a long way from home.

In fact Marko's mantra is a pretty good way for any self-employed person to start the day.  Simply replace 'Here' with 'Self-Employed' and repeat slowly until you start smiling.

Surrogate markers

I've been thinking about what makes me happy at the end of a 'typical' working week.

Because I am only paid when I'm in front of a client (ie actually delivering a programme), a 'typical' week is spent at my desk at home not getting paid.  So what does a 'good working week look like then?   Especially from a marketing / client liaison perspective?

In the absence of actual feedback from clients, I use surrogate markers to give me a sense of how my business is going.  This is the same logic as assessing a PR campaign, which is all about changing public perception (hard to measure) in 'column inches' (easy to measure).  

My preferred surrogate marker is comparing my email inbox and outbox at the end of the week (I file emails weekly).  A good week has as many client emails received as sent.  And if I'm filing incoming emails from 4-5 clients at different stages of the adoption cycle then I've had a very good week.

Because I always travel to the client to deliver a programme, a meaningful longer term marker is 'number of flights caught'.  More flights = more work.  More international flights = greater global reach.

Surrogate markers must be easy-to-measure, personally meaningful and offer a logical insight into the health of your actual business.  They are never as meaningful as actual feedback from a client or sales figures but at the end of a solipsistic week at home they're much better than nothing at all.