Why you should define your offering as a freelancer or consultant

In these challenging times with regard to the state of the economy there are a lot more people without full-time employment who find themselves looking for freelance work and who are seeking to offer one form or another of business consultancy. In my world I meet quite a lot of such people, many of whom are new to the fold of the independent worker, having run a business or been in a settled job for many years.

One of the expressions I do not want to hear when a freelancer introduces himself or herself is “I am a generalist”. Why? Because it is important to take into account what the singular or multiple audience hears, and what they hear is “I am not really good at any one thing”. The corollary of “Jack or Jill of all trades” is “Master of none”.

If someone has been the owner of a business or a senior director or partner or whatever, that person tends to think they know all about business because they think they have seen and done everything. That may be true in terms of having a grasp of a business, but it really will not impress a potential buyer of services, who wants to hear what the freelance consultant can do to satisfy their immediate business need.

Everyone is good at something and can offer a special knowledge. If you have been an owner of a business or an employee, that business specialised in something, whether it was engineering, manufacturing, food processing, importing toys, plastic moulding or accountancy. There must be an area the freelancer is most comfortable in. That is going to be the way to get in to sign a decent contract to help. Once in, you can offer your other skills on the back of your perceived competence in what you have achieved so far. However it is important to get in, so do not ever call yourself a generalist, and concentrate on what makes you happiest and is most financially rewarding.

© Jon Stow 2010

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Why we need to take an outside view in business

I am in a reflective mood. I am coming to the end of an engagement helping a client; an engagement which should not be ending. This is not just because obviously an income stream will stop; I have other clients. It is that there is so much more I could do for them which they just cannot see, being such an introspective inward-looking business.

I started with this client when their firm was experiencing extreme pain due to loss of (mainly) staff but also internal disputes. My few months there have alleviated the pain and now they feel much better. However, they do not seem to realise that so far we have just dealt with the symptom and we need to cure the illness so that we do not have another bout of sickness in six or nine months time. Treatment would not be difficult if they allowed me to help. I could cut my time with them by 50 to 75%. It would not be a costly experience for the client and my work would pay for itself many times over.

I have the advantage of being an outsider able to look at the whole business rather than being an inside navel-gazer, not able to look very far, and certainly not able to look even at what competitors are doing. I can see a lot more; I have the perspective of distance and height to see the whole picture, and I wish I could persuade them as to what they need to do. I do not need to do it for them; they need a corporate exercise regime, which is why I would only need to see them occasionally in the role of a “personal trainer”; just a visit to keep them on track.

All this has made me think that I too need an outside perspective on my own business. Maybe I cannot see my wood for the trees. In the next month or so I will be having a check up from a outsider on all my marketing and probably on the whole way I approach my business.

What will you be doing that is different to help your business be better, and do you agree that asking a suitable outsider to look at your business may be what you need?

© Jon Stow 2010

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Practicing what we preach – seeing value over cost

When we are selling our product or service, what many of us aim to do is to persuade our customer or client of the value of our offering. That way we get a proper reward, and of course we have to live up to our promises in delivering the quality to fulfill our customers’ expectations. I work hard to maintain the quality of the service I provide and to ensure that my clients have peace of mind, because as someone effectively offering business support services in tax compliance and other areas, peace of mind is what I am selling. My clients are then able to concentrate on their core businesses whilst knowing that most of the red tape compliance is being taken care of.

This is all well and good, but sometimes in business we are guilty of not seeing the value of the products and services for which we ourselves are customers. I see people including some of my own clients finding value in one service but penny-pinching over another. We may think that we know what we are doing, but I have resolved to find help in marketing through my websites in the New Year. I am a specialist in one area and pretty nifty in at least one other but I have to admit that I do not know all the tricks of internet marketing whereas someone else will. For that reason, this very blog may look a little different in a month or so, though I will still be writing it of course.

It is no good being a cheapskate as a purchaser of goods or services. Generally, a better product or service makes life easier all round, so do not skimp on buying in website design or bookkeeping or whatever it is you need. Check the track record of anyone you engage, look at their work or get a decent reliable reference for any contractor whose services you buy in. Quality will cost money but should deliver greater value and help you make a lot more money. Unfortunately it really is true that if you pay peanuts you get monkeys. What you don’t get is satisfaction in delivery and you may be no better off and end up having to spend a lot more to have things put right.

© Jon Stow 2009

Why we need to assess the risk in our business assignments and projects

In my last piece I talked about the danger of adapting business agreements and contracts when we do not have the specialist knowledge as lawyers, or indeed as (in my case) a tax practitioner. I suspect that those who are driven to do this are either out to impress their clients or are motivated by the prospect of getting a larger fee than if the work is shared with a professional in the relevant field.

However, even for those who may be very well qualified in terms of understanding what is required in an agreement or contract or other project of any description, the risk in undertaking some assignments may simply be too great. It is sometimes best to pass on a project, and, I believe, take a commission as long as we are up front with our client as to what we are doing.

Let me give you an example. When I was in the larger corporate world the sort of work I did included devising share plans for companies to reward their staff. The idea was that the employees would receive bonuses in the form of shares in their employer, and at the same time the company would save a great deal of money, particularly in terms of tax, in doing so. One project I did took me about three weeks working exclusively, and I remember that my employer’s fee was about £50,000. During the period I was developing the share plan, whilst I knew what I was doing, I had the benefit of peer review and also checked with lawyers that I was on the right lines and that the plan was “watertight” and that it would work.

The client company was looking to save millions, so their Financial Director was not worried about the fee they were paying, and my employer stood to make a tidy profit.

Now I am a principal of a small business. I still have the expertise to do a similar project. What I lack is the opportunity for sufficient peer review and the backing of a large corporate employer. I would not undertake such an assignment and would pass it on to a bigger player, of whom I know a few. After all, it is not just when we mess up that we might get sued. If other things outside our control go wrong it is human nature (and all businesses are run by humans) to look for someone to blame, and even being on the wrong end of misdirected litigation can be very expensive and very worrying. We are also unlikely to have a sufficiently large professional indemnity policy to save ourselves or our company and reputation from ruin.

My message is that not only should we not undertake business activities outside our professional competency, even if we believe that we can rise to the challenge intellectually, we cannot afford to take the risk if there is a lot of money at stake. With a small business it is better to refer on to a larger provider with a more considerable financial clout and be happy with a commission. Our clients will respect us more for our professional approach and we do not need to let our pride line us up for a fall.

© Jon Stow 2009

Why we SHOULD reinvent the wheel – business agreements and contracts

One of the most irritating cliches I hear is “I don’t want to reinvent the wheel”.

It is a favourite refrain amongst many well-meaning business owners and business advisers who will typically ask for a template for a sale agreement, partnership agreement, shareholders’ agreement or some such thing. One of the worst which gets me upset is a request for a template share option agreement.

Why am I concerned? Well, all of these documents are legal agreements. They are contracts. People fall out and resort to lawyers. An amateur document may not mean what it is supposed to mean or may not fulfil its desired purpose. Indeed it may not be fit for purpose at all and will give lawyers a field day, and an expensive one at that.

Something that is also not considered is that these documents which are legal agreements do not travel well internationally. The law is not the same everywhere. There are different laws of succession, different family laws,and of course different commercial laws and different tax laws The last is why share option agreements which are tax-efficient and beneficial in one jurisdiction may be disastrous in tax terms in another.

I guess this is returning to one of my favourite recurring themes which is that there is no substitute for paid advice from qualified professionals. Some people might think this would be expensive for their clients or themselves, but professional advice up front has great value in being cheaper by far than expensive litigation. Do not be tempted to re-hash someone else’s document for your own purpose. Invest in a bespoke agreement from a specialist backed by someone else’s professional indemnity insurance rather than yours. Sleep easily at night.

© Jon Stow 2009