I have one client who really wants me to work full-time for them and I’m trying to talk them into a long-term consulting relationship instead.
How do you balance a GIANT client while maintaining the smaller projects? The big client’s work will eventually end and I don’t want to be job-less at that point. I did this once with some success but was able to play a time zone game there – the big client was overseas so I worked a full day with them, then worked for my smaller clients in the middle of the night from my hotel room.
Any thoughts? I am certain I don’t want to be a full-time employee for this client. They are SO COOL and the work is really interesting and challenging, but I do the “Plan Your X Year” exercise and I know full-time employment is completely counter to my values and long-term goals.
Oh yes. I do have answers to this one! (If I may humbly say so.)
This company wants more of you, so you have the leverage.
The first thing you do is raise your rates.
If you want to raise your rates with absolutely no pushback, give a very long timeframe! For example, “I am writing to let you know that my rates will be increasing to $xx in NINE MONTHS.” I mean, nine freaking months notice – that’s a world away. And they’ll think to themselves, oh, we’ll stock up on her services before then, let’s send her as many tasks as possible while the rates are still low! It’s hard to get grumpy about 9 months’ notice.
Three months’ notice, however, is perfectly *fair*, but it’s also fair for your clients’ internal response to be a series of moans and groans. So a happy medium might be somewhere between 3 and 9 months. Also, it’s September right now, so “in the new year” seems like a natural demarcation.
There’s really a sliding scale between raising rates now / getting a lot of pushback and raising rates absurdly far in the future / getting no pushback. Of course, doubling your rates effectively immediately would cause a lot of pushback and probably lose you clients. But avoiding ALL pushback is just costing you money and represents a level of conflict avoidance that’s going to fuck you over for life. Like, that level of conflict avoidance is a personality defect. (Sorry! But true!) I mean, being in alignment with your client so that no pushback occurs is wonderful, but total avoidance of pushback should not be your primary motivation on this or anything in life.
So find your sweet spot on this sliding scale and do it.
Never raise rates less than 10% at a minimum. You don’t want to go through the social friction of a rate change for some kind of 5% bullshit. Let’s say you go for a 15% increase taking effect on January 1.
At that time, the company will either give you less work, for which you will be charging more, or they will give you the same amount of work, for which you will be charging more. In the first scenario, you have extra time. In the second, you have extra money.
Use extra time to build up other accounts. Put extra money in savings for when the eventual shit hits the fan.
If you wanted extra time but you got extra money (champagne problems, there!), you can either raise your rates again, or simply tell them you can only work 25 or 30 or whatever hours per week for them.
You can also hire someone to help you. This could be someone close to your level whom you subcontract out work to, or it could be a virtual assistant who does routine and administrative tasks. Or it could even be a housekeeper if you would prefer to outsource your personal life, although that’s not nearly as scalable.
Say you bring on someone at an apprentice level to you. Someone who makes about half what you charge. Or someone’s who’s better than you at part of what you do, but can’t do everything that you do. You have a lot of options. Think about what part of the service you provide is a weakness or you just don’t like. But also think about what part is most cost-effective to outsource, even if you actually are great at doing that part yourself. Maybe the fun part of the job can be outsourced to someone who makes $20/hr but the boring part of the job can only be done by people who make $100/hr.
Figure out what kind of help you want to bring in and find someone you actually want to talk to every day.
You can introduce them to your client(s) with minimal friction by explaining, for example, that the assistant will be doing just one specific thing. For example:
“Hi, I’d like to let you know that My Consulting Firm team is expanding! I’d like to introduce Maia, cc’d, a 3-D rendering expert, who will be working on new product mockups. All other aspects of the consulting process will still be handled by me, but Maia might get in touch from time to time with graphics questions.”
This way the client does not feel you’ve done a bait and switch. And notice that this person is introduced as a specialist and an “expert,” so this sounds like something that will benefit the client, not just help you make more profit.
Note, if you start paying others to do work for your clients, make sure the client is paying your business, not you as an individual. If you are currently being paid as an individual, start the switch immediately. Form an LLC or an S Corporation (go talk to an accountant!), get a federal tax EIN (in the US this is free and you apply online, it takes 2 minutes), and, most importantly, don’t ask the client for permission! Just present it as something you’re doing, and as a routine paperwork matter. As in, “Hi, I am converting to an LLC so I’ll need future payments to go to a new EIN instead of under my social. The EIN is xx-xxxxxx. Please let me know what other forms you need.”
If you have one or more people working under you, you are no longer limited to working 40-ish hours a week and then worrying when to cultivate other clients. You could bill 60 hours a week and only perform 20 of them yourself, for example. Once you get the client happy with the new arrangement, find out how much work they actually want performed and make it happen. Maybe they wanted to hire you full-time but actually have more than 40 hours that need done. Find out. Raise rates and outsource until your own professional life is where you want it to be.
Now, try to make your client comfortable with you having other clients. For example, by mentioning a client who is in a totally different industry and maybe is so fun and cool (or philanthropic) that anyone could see that you would want to do some small job for them. Like, sure, I love doing 3-D modeling and injection molding for your giant hose company, but I thought you’d want to see this 3-D animation I did for the Metallica tour! Or, more mundanely, look for opportunities to introduce your clients to each other when there would be some genuine mutual benefit.
The purpose of this is so that when the work with the client eventually ends, you can ask them for referrals, and they will not only be amenable to it, but also know a bit about the kinds of work you can do that’s not about selling industrial hoses. They also know you can work for the music industry, and local chiropractors, or whatever.
If you really don’t want to outsource or hire anyone, you can still:
- raise your rates
- see if that results in more free time to work for other clients
- if so, get other clients
- if not, raise rates again and then use free time to work for other clients
- even if it’s just you, you should still get the client used to you being a business, with the ultimate goal of maintaining relationships and getting an indefinite stream of referrals once this particular client engagement ends
And don’t just go chase tiny little clients who can fit into your extra hours! Go chase big, exciting, rich clients! If you end up with multiple large, well-funded companies all wanting your services at the same time, well, that might cause anxiety in some people, but it causes, you know … wealth in others.
At that point there’s almost no wrong answer to whether you decide to hire and build a bigger company, or cut loose the lesser-paying client, or work 16 hour days and put 6 figures in the bank until the work ends and you go to a beach for a long, long time.
Come to BullCon!