It started as an accident.
“What’s your rate?”
“Ummm . . .”
After teaching a growth marketing workshop at General Assembly in 2015, a startup founder in my class asked me to build them a marketing plan.
And she wanted to know my price. I said the first number that came to my head.
“It’s a flat fee for a marketing plan at $750” – I said this number having never consulted for anyone before.
I ended up spending 30 hours and three full weekends on it. That’s $25/hour for those of you scoring at home.
I shot myself in the foot on that deal, but I impressed them enough that they asked if I would consult on the side. When they asked for my hourly rate, I decided to do some research before I answered this time. 🙂
This happened a few more times as I was teaching marketing workshops and sharing my blog content.
At the time, I was an employee at a demanding startup, and it became more and more difficult to juggle my priorities. I woke up at 5 a.m. every weekday to work for three hours on my clients, then I would head into the office for my day job. I left at 7 p.m. every evening to spend a few hours with my wife and then worked a few more hours until I passed out with my laptop in bed, usually around 1 a.m. After months of this, I realized it wasn’t sustainable and my wife was worried I was becoming a zombie.
I had to make a decision.
The Jump: Leaving my day job and going out on my own
First, I had to weigh the risk vs the reward. Can I get a guarantee that the money will come in? Can I get more money consulting than being an employee? What’s the upside of each? Stock options with my employer vs. the opportunities that come with consulting.
My first task: Could I get clients to commit to a six-month guarantee? Two clients agreed to raise my fee and guarantee six months of pay. With these two, I was able to make more than I was at my startup. Plus, I had other clients that were getting started. Financially, it made more sense to make the jump. Plus, I had been saving the consulting money for a rainy day. (Sidenote: I am always paranoid that every client will just leave me so I don’t spend money.)
Some people see the jump as a risky move, but it was the opposite for me. I had already proven that I worked well with these companies and they guaranteed they would engage me for 6 months at more than what I was making. Fortunately, my wife had a job with benefits and insurance to cover us both. Quick rant: I really feel for single consultants who don’t have this luxury. It sucks, and we should be supporting bootstrapped entrepreneurs/consultants, but that’s for another blog post.
In my eyes, the jump was the safe move. Clients are committed. Insurance is covered. Game on. It was time to start hustling.
The Reality of Consulting
Your boss = Everyone
I quit my job and went full-time to work for myself. I’m my own boss! I can do whatever I want, right? Nope. That’s 100% wrong. My job was to help early-stage companies grow. That means CEOs are paying me to get results. That also means when things don’t go well they can email me, slack me, text me or call me 24/7. It usually goes like this: “We run out of VC money in 9 months and we have to hit our goals. What are we doing to make that happen?” I went from having one boss to multiple bosses.
One thing I hadn’t factored in was my exposure to new growth experiments. I went from focusing on one business model to working on multiple marketing strategies across multiple industries. This allowed me to accelerate my learning by performing more tests and experiments across different sectors. I found that I was learning more in three months than I did the entire previous year. As my experience went up, I became more confident in things I could do and more aware of the things I didn’t want to do. Also, I quickly learned what my weaknesses are … like design work. 🙁
The Unspoken Conflict
This is what sucks about consulting and most people don’t admit it. The more clients you take on the less you can deliver for each one. I was in denial about this for a while but now I have come to terms with it. My natural instinct is to say yes to every task and go above and beyond. I’m game for all-nighters or working weekends to get things done. This works as an employee but not as a consultant. You have to manage expectations and be very clear about your scope of work and your deliverables. I still try to undersell and over deliver, but not when it hurts my personal business. This has been hard for me but very necessary. Also, I have learned that I have to cap how many projects that I take on at one time so I can over deliver.
The Dilemma: How to Scale Yourself
I started hiring virtual assistants to help with some day-to-day items. I was able to outsource my weekly reporting, copywriting, web production and research projects. With the help of tools like Report Garden, Bonzai and Boomerang, I can automate invoices, correspondence and client reports. This helped free up time, but that time was quickly filled with new clients and meetings. I have since hit a wall.
So, how do I scale? What do I scale? This is the dilemma. What do I do?
I have decided that these are my options.
- Go upstream and raise my rates
- Niche down and just focus on one offering
- Become an agency (Hire and train employees so I can take on more clients)
- Keep consulting and self-fund a product on the side (Hey, it worked for 37signals and Hiten Shah)
Instead of picking just one of the above, I’m trying a couple of these options. Most people would say this is a bad idea and to focus on one. They are probably right. Instead, I have found partners I trust to help with each one of these. Would love to know your opinion on what to do? Or you can wait to see what happens with me.
Feel free to take a peek at each experiment.