Mitch's Blog

I bought a drill from Sears on their web site yesterday.  Buying online meant a small $7.50 savings, so I opted to buy it online with “Store Pick-up.”

At 9:20 am this morning, I got an email from Sears saying my order was ready for pick-up.  I went to the store around 2:00 pm in the afternoon.  If you’ve never picked up an order from Sears, it works the same way as when you buy an appliance in the store–you go to the Merchandise Pick-up area and scan your receipt at a kiosk.  This puts your name in a queue and your name appears on a TV monitor.

In this particular instance, I stood waiting for 4 minutes and 30 seconds.  A guy came out of the warehouse and called my name.  He said, “your order will be out in just a second,” and then he closed my name out of the queue.

I stood and waited.  In fact, I waited for 30 minutes.

I had enough time to see that Sears has a large poster in their waiting area.  This poster was about their customer service metrics.  It indicated that in the last 30 days, 100% of their customers didn’t wait more than 5 minutes.  (This poster was in the style of those “Accident free for X days” posters at other venues.)

So there’s at least two scenarios here:

1. Sears staff members are lying to management.
2. Sears management has a policy to lie about their metrics to customers.

Presumably there’s hire/fire or bonus incentives around these metrics for someone in the chain of command.  In any event, honesty about metrics is critical to evaluate your business.  Lying to yourself and your customers about your metrics leads to wrong decisions internally and insults customers.

While I was waiting, another fellow was waiting for a patio set.  He observed that he had been “served” in under 5 minutes, moved out of the queue, and yet he had to wait another 10 minutes.  He saw the monitor and I made sure to point out the metrics poster, so that he got the full experience.  This was a fellow of retirement age who (probably) wasn’t drafting a blog post in his head while he was waiting.  But he wasn’t impressed with the overt lies.

Be careful how you apply metrics in your business.  You might get the numbers you want, but will your customers get the experience you thought those numbers reflected?

A few months ago, someone asked me, “How about a blog post on your advice/experiences on consulting?”

My experience as a consultant is somewhat limited; I’ve only had a handful of clients in the past. From my perspective, things went well as the contracts were often renewed and I got more referrals for new business than I could handle. At the end of the day, a consulting business is a nice, safe business to run. You either find clients or you do not. You don’t have to spend months creating a product and incurring a lot of financial risk. You can get set-up in a week or two and you thrive (or die) based on your ability to network with people and deliver results.

The main equipment you need is a phone line, business cards, a web site, a bank account, an accountant, a simple legal entity, some references, and a few clients. You’ll want a multi-function printer/copier/fax as well, and perhaps a fax service and an answering service. None of this is hard to acquire. With some industry experience, some networking, you can start a functioning consulting business for $2,000 or less, depending on what type of corporation you set up and what your state fees (and accountant / legal fees) entail. For basic engagements, you won’t need a lawyer, or at least, more than an hour or two of legal time. This is pretty straight forward. If you’re going to be “self-employed” (an IRS classification), it’s even easier. (This is not legal advice. Talk to your accountant or attorney about your options.)

I suspect there’s already a lot of “how to be a consultant” or “how to grow a consulting firm” posts out there. But what about advice from the client’s perspective? I thought that might be more useful.

In the past year alone, I’ve hired over a dozen consultants to help my company with incremental headcount. These include technical writers, marketing, graphics artists, programmers, video editors, legal and financial consultants. Some of these consultants have been awesome. Others haven’t worked out. This post is a look at my observations from dealing with these people, projects, and relationships.

Who You Know is More Important Than What You Know
Every consultant I’ve ever hired came from a referral. Referrals generate referrals. I needed someone to help me with some financial modeling. I emailed an accountant who worked for me years ago asking if she knew anyone. She referred me to someone else. That person referred me to someone else, who is now my corporate tax accountant. However, he didn’t do financial modeling at his firm, so he referred me to someone else who then referred me to the guy I hired. The guy I hired was the bomb. His $5,000 engagement turned out to be worth several million dollars to me.

That’s a long chain of referrals, and thanks to email and the phone, it took less than a few hours to find the right guy.

You absolutely must be on LinkedIn. You must have a web site with an email address and a phone number. If you do a lot of in-person meetings, get your photo online so people recognize you at Starbucks.

Your Job as a Consultant is to Deliver Quality Results on Time and with Minimal Hassle
In general, whether you are an employee or a consultant, you need to deliver the expected results with less “touch” time from the hiring manager than if that person had done the project himself. Your ability to listen, communicate what you heard, confirm that your priorities are in line with expectations are all critical. Consultants are generally hired for either expediency or for specialized skills that do not require on-going full-time work. This means you need to deliver results rapidly, and be flexible when projects come up.

Clients can be vague, arbitrary, and a pain in the butt. I know I am. Part of your talent as a consultant is sifting through that to figure out what’s really going on.

Communication is Key
Clients will have different ways that they want to communicate. Some will lean heavily on a project tool such as Basecamp. Some will use email. Others will prefer to talk on the phone or meet in person. You need to be able to deal with all these forms of communication and respond when spoken to. I once had an artist consultant who wouldn’t reply to email if he felt there was no action for him to take. He also wouldn’t answer the phone or call back. His contract was not renewed.

Flexible Hours May Be Required
If your client is in another time zone or often asks about tasks in off hours, you might need to work outside of the 9-5 hours. If you’re going out of the office or on vacation, you need auto-responders set-up and it’s good to communicate any surprise time off with active clients up front. Some people become consultants to be their own boss, but the reality is, you are still working for someone. If your client has an emergency with your project, you might have an emergency as well.

The flip side of this is that some of your clients will be a bad fit with you and you may find yourself terminating the relationship, either due to too many emergencies or other behaviors. Just be sure you handle all aspects of the client relationship professionally; referrals and reputation are key!

Be Careful What You Say
After working with some clients, you may grow to feel comfortable with them. Perhaps you go out for lunch or get a beer after a meeting. That’s great, but try to keep the rants about your other clients or your partners to a minimum. There is nothing more awkward than a partner at a firm ranting about his firm’s internal politics. It sends mixed messages about stability and confidentiality to the client.

The Client’s Goal is to Minimize His Own Stress
I once had an accountant call me and tell me he thought he did my taxes wrong. I couldn’t fire him fast enough. Talk about stress! Another time, I had an attorney call me asking what I wanted to do about a legal situation, but he couldn’t explain my options in clear, jargon-free language, other than I had 72 hours to make a decision. I had to hire another attorney rapidly to figure out what was going on. The new attorney cost me twice as much, but was a far better value.  As  the client, I want the consultant to take care of things, make recommendations, and translate jargon into language that I, as a non-expert, can understand so that I can make the right business decision.

Appearance Matters
Every part of how you appear matters. If you show up to my office wearing a non-professional attire, I will wonder what the quality of your work is. If your business cards are cheaply made or clearly from a home printer, I probably won’t hire you. You don’t have to have an incredible web site, but it should be professional. If clients come your office, it should be clean and look like a real business.

When I needed to hire a video editor, I thought of a fellow I know. He has a large office, but it’s covered in papers and food crumbs. He has two 10 yr old computers and he gets into rants about how he hates HDTV and his customers. Then I thought of another fellow, who I knew socially and had told me about his new Mac Pro and his work for public television. I chatted with him and got some high quality samples of his work. He has been wonderful to work with.

You don’t have to buy a $1,000 suit; a $50 dress shirt will do. You don’t have to have a $5,000 desk, a clean $200 desk that is clean and organized is fine. You don’t have to spend $0.25 per business card, a $0.02 card that feels robust is fine. How you answer the phone, your writing in email, the type of shoes you wear all play into your appearance. Keep it professional.

And of course, be on time. There is rarely an excuse to be late. “Traffic” is not an excuse; there is always traffic.

Detailed Invoicing Inspires Confidence
No one likes paying bills. The worst type of bill to get is “Project X….. $100 per hour x 100 hrs …. $10,000”. What did I buy? If you’ve ever gotten a bill from a lawyer, you know that lawyers tend to provide a lot of detail. I have no problem with “Email with client re: important matter … 0.50 … $300” because then I can make a value assessment–was Important Matter worth $300? Probably! All consultants should err on the side of more detailed billing. A long invoice including lots of “date / project / hours / amount” on a 10 minute granularity makes me more confident than “50 hours on project”. Fortunately, there are a number of tools out there to help track time and build out invoices with great detail. Even if you’re best buddies and the client trusts you, more details are good if the client has a boss or investors or auditors that might be looking at the invoices later.

Learn Your Client’s Business
If you never figure out the jargon of your client’s business and the client has to keep re-explaining things to you, don’t expect a long term relationship. You don’t have to become an expert, but if you take some time to learn a little about the areas that you’re exposed to, that’s going to make you much more efficient. And your efficiency is an edge.

There’s probably more to say here, but those are some key points off the top of my head. I hope this is useful.

I get this question a lot. I wrote this down as my standard answer.

First, you need to be sure you are building a product people want. This means doing market research and talking to potential customers before you do anything else. It sounds obvious, but building something people want is the hardest part. When you’re evaluating whether or not people want what you’re building, you need to hear people say, “OK, when can I buy this? I need this right now.” Potential customers who say, “Yeah, that sounds like a great idea” are misleading–that kind of response means you haven’t gotten them to the mental finish line such that they want to buy. It is crucial to understand the difference between these two reactions.

If you are serious about starting a company to the point that you or your partners are quitting your jobs, you need to go ahead and legally form the company. You can “do it yourself” but I recommend finding a respected attorney familiar with the law of where you are starting your company. In particular, you should have employment contracts between all partners and the company, and you should have intellectual property assignment agreements between all contributors and the company.

Without these basic agreements in place, your company can suddenly be in a position of being (1) un-fundable by VCs or other capital sources, (2) un-acquirable, (3) sued by a partner who has dropped out or feels he has been wronged. And of course, without some non-compete agreements, a partner can leave and potentially take know-how of your business to start a competing company.

Do not depend on a ‘gentleman’s agreement’ of what will happen when someone leaves–even if everyone trusts everyone and everyone has known everyone else for many years. In every company I have ever started, someone has left before the first product was ready to go to market. In one case, that tanked the company and the remaining partners, including yours truly, lost many thousands of dollars.

Setting up a company and getting these agreements in place is relatively cheap, even with a high-end law firm in an expensive city. The cost is essentially zero compared to other start-up costs and it will save you serious stress and money down the road.

Hire an attorney who specifically deals with business. I would not hire a “front door attorney” who “practices whatever comes in the front door.” Ask for references from businesses that were once starting out like yours. Also, you will need a CPA to keep you in-line with the IRS and other government agencies. The CPA will cost you much less and, in some ways, be a far greater value. I wouldn’t start a business without either of these people on my “team”. I’ve done it the wrong way and the right way–and the right way is MUCH better and less stressful.

When you’re just starting out, it can be very easy to fall into the trap of thinking that what you’re doing isn’t going to be “big” or “maybe it’s not important enough” to be worth protecting. But if you have quit your job to do something, it must be big and important enough to justify taking some basic precautions such as these. Chances are living expenses while you build your product will dwarf the costs of protecting yourself–there’s just no reason not to.

Of course, if you’re building a company alone, you might not need much of the above–I am really referring to scenarios involving 2 or more people. If you’re going at it alone, you might still need protection from contractors you hire, though.

See also: Top Ten Legal Mistakes Made by Entrepreneurs. I also recommend this book which covers the above scenarios and many other issues.

Finally, this is not legal advice.

(This is from my office FAQ; it felt more appropriate here.)