		Copyright 1995 by Seann Maxwell.  All Rights Reserved.

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16 BIGGEST MISTAKES CONSULTANTS MAKE AND HOW TO AVOID THEM!

				by Seann Maxwell, B.Eng., M.Sc.


	Through personally generating more than $20 million in fees over more than 25  
years as a consultant and advising other consultants on how to develop and build their 
consulting businesses, I have discovered that many competent consultants lose thousands 
of dollars of fees through committing one or more of these 16 biggest mistakes.

	I would like to share some of what Ive discovered with you.

	Its wise to point out that seemingly small things can make a big difference to 
your success as a consultant.  You can increase your income by 25% and more by 
eliminating or adding something presumably simple.  None of the ways to fix the 
BIGGEST MISTAKES outlined below are difficult to do; BUT, you need to implement 
them to reap the benefits and they must be done right.

	Here is what Ive learned.
 
	Consultants reduce their opportunities for big success WHEN THEY DONT:

1)	Adequately define their unique qualities in terms of  capability statement, 
	brochures, market position and credibility in their chosen field.

	Unless this is carefully and consistently done, a consultant will not stand out from 
the crowd in a clients mind.  Without anything unique to evaluate the consultant by, the 
client is then forced to use price as the principal basis for selection.  Not only does this 
preclude the opportunity for negotiated agreements and a reduced opportunity for higher 
fees, but it cause assignments to be lost through competitive bidding.


2)	Precisely define who their prospective clients are.

	This a marketing fundamental, but many consultants Ive known dont develop 
enough detail about their prospective clients.  While they may know their industry, they 
may not have not selected their top 30 target clients.  They may not have identified the key 
decision makers (KDMs) and key decision influencers (KDIs) within those target client 
firms.  When duck hunting as a teenager, I learned to not shoot at the flock, but instead at 
a specific bird.  Its the same with consulting.  Successful consultants select their top 
target clients and then learn everything about them.


3)	Develop and market tangible service products.

	Its easier to sell a tangible product than an intangible service.  WHY?  Its simply 
because the buyer knows what a tangible product will deliver at the time of purchase; 
whereas, with an intangible service, the benefit is usually delivered well after the purchase 
decision is made.  The more tangibility a consultant can give to his/her services offered, 
the more the services are packaged to appear tangible to the client, the higher the 
probability for success and the higher the fees.  


4)	Focus on relationship marketing.

	Effective consulting depends on good communications and trust between client 
and consultant.  After all, dont we all prefer doing business with someone we know and 
have confidence in?  Of course we do!  The consulting business is no different.  Successful 
consultants do everything in their power to create and maintain successful relationships 
with the KDMs and KDIs in their target marketplace.


5)	Understand how to calculate the right billing rate.

	These seems to be basic. Yet, I cant tell you how many times Ive seen new and 
even experienced consultants fail to understand the basis for calculating the right billing 
rate.  You must know the basic cost of doing business, just as you must know the 
minimum billing rate for your services.  Few consultants survive for long if they cannot 
command at least two times their desired hourly wage.  For example, if a person wants to 
replace a $50,000 per year salary through selling consulting services, his/her minimum 
billing rate needs to be at least $50 per hour to account for payroll benefits, overhead 
expenses, non-billable time, marketing, travel, communications, vacations, professional 
development, profit, etc.     


6)	Become an authority in their field.

	Through failing to position oneself as an expert or an authority in the chosen field 
of expertise, a consultant misses many opportunities for assignments and increased fees.  
After all, a consultant is essentially a problem solving resource to a client.  The more 
credibility that can be attached to a consultant, the more consistent the assignment flow.
This demands creative thinking, the ability to gather publicity for oneself and doing 
outstanding work for clients who can give referrals to their friends and associates.


7)	Track prospects and forecast revenues.

	Even experienced consultants often fail to have an organized system for tracking 
prospects and forecasting revenues.  Over the years, Ive used a simple system based on a 
spreadsheet which accurately forecasts quarterly or annual revenues while allowing each 
prospective assignment to be tracked and followed up.  

	This system gives your consulting business an easy and effective way to:
		- identify and follow prospective assignments
		- predict sales revenues
		- know if you are tracking enough prospects to deliver the revenue goal
		- predict when assignments are likely to materialize
		- use the information produced in personnel resource planning
		- organize your marketing efforts according to clear priorities 


8)	Write winning proposals.

	Many consultants lose assignments because they do not put enough time, creative 
thought and preparation into writing winning proposals.  Some years ago, I had the 
opportunity to review hundreds of proposals which technical consultants had submitted to 
the Asian Development Bank.  I was amazed at just how bad the majority of these 
proposals were.  My observations indicate that even now many consultants could benefit 
from upgrading the quality and presentation of their proposals.

	A winning  proposal is the culmination of all your marketing efforts to date.  
Successful consultants are superb proposal writers.  They put their effort only into 
creating winning proposals, not into those that lose.  Before starting to write a proposal, 
they:
	a)	build good rapport with their prospective client
	b)	carefully define the scope of the assignment with the client
	c)	clearly understand the clients objectives and associated budget
	d)	agree about the proposed fee arrangements.

	A winning proposal is a coherent, carefully structured selling document which 
convincingly persuades your prospective client that: you know what he/she wants done, 
you can do it, and your price falls within the budget.


9)	Precisely define an assignments scope of work. 

	Starting to work on an assignment without a clear understanding of the scope of 
work between the client and consultant is one of the greatest causes for later client 
dissatisfaction.  After all, if you dont know what the client wants, how can you deliver it?  
What the client wants is not always clear.  Successful consultants spend the time needed to 
precisely define the scope and terms of the assignment with the client.  They then commit 
this to paper prior to ever starting work.  

	Sometimes, a consultant is used to define the scope of an assignment.  This is a 
different case and usually involves different terms of  payment.


10)	Pay attention to gut feelings when selecting clients.

	I have found my intuition to be the best judge of a potentially successful or bad 
relationship with a client.  Whenever in the past, I overrode my gut feeling about a client 
and went ahead with the project, I invariably ended up with problems completing the job 
or collecting my fees, and feeling bad about the client.  And, they had bad feelings towards 
me.  No one benefits from this kind of lose-lose situation.

	I no longer take assignments unless I like the client.  Not only does this makes the 
assignments more fun, but I get paid and everyone remains happy.  Having this flexibility 
to select your clients is one of the great benefits of being a consultant.


11)	Cover all work performed with an agreement.

	Sometimes, were so eager to get started on a project, that we fail to document the 
scope of work, the schedule, the terms of payment, etc. in a written and signed agreement.  
Even experienced consultants sometimes make this huge mistake.  Without an agreement, 
a consultant has very poor grounds on which to resolve any questions concerning the 
scope of work, schedule, terms of payment or collection of an outstanding account.


12)	Work on the clients money.

	Not getting paid your fee for work done for a client is arguably the worst thing 
that can happen to a consultant.  In my early days as an independent consultant, I was 
owed several hundred thousand dollars by a few clients.  My business nearly floundered.

	Not wanting to repeat that experience, I now work on a retainer for all my 
projects.  The first months fees are collected and held as retainer,  Invoices are submitted 
every two weeks or at the end of the month.  The retainer is credited to the clients 
account and accounted for at the end of the project.  Clients readily accept this practice.  
Since adopting it, Ive always collected all my fees.


13)	Restrict their available time to one client/project to 50% or less.

	Consultants who commit more than 50% of their time to one client or one project 
usually lose flexibility and a great deal of independence.  Objectivity, which is often what 
client is paying you for, can be lost.  You risk  your business should you lose that client.  
And when the project ends, you may find it takes a long time to get your next assignment.


14)	Observe the service product/market risk matrix when trying to grow.

	Ive seen lots of consultants try to expand by introducing a brand new service 
product into a brand new market.  This almost always results in an expensive failure 
because they have ignored the product service/market risk matrix which clearly shows that 
introducing a new service to a new market entails the highest risk.  Its much better to 
follow a less risky approach by introducing an existing service to a new market, and to 
become familiar with this matrix as you plan your business expansion.  


15)	Maintain active marketing efforts even when fully booked.

	This is another expensive mistake made by consultants, and one of the most 
difficult to overcome.  A client sometimes wants all of your time to complete a project on 
a tight schedule, and since money is involved, you may be inclined to go along with this.  I 
encourage you to accept the project but never, I repeat never commit more than 50% of 
your time to it.  If needed, find some other consultants to act as sub-contractors.  At the 
very least, successful consultants devote at least 15% of their time to marketing, even 
when they are at their busiest.


16)	Give special treatment to long term clients.

	It so easy to start to take long term clients for granted, thinking that they will 
always be there to give you assignments.  NOT TRUE!  Every client is special and should 
be treated that way, no matter how many assignments you have done for him/her.  Ive 
seen clients give assignments to another consultant just because they were tired of being 
taken for granted.  Simple things like not promptly returning a phone call can lay the seeds 
of  dissatisfaction, and open the door to you losing the next assignment from a client.

	Use the tips outlined above to avoid these 16 big mistakes and you will 
undoubtedly create more financial success and enjoyment in your consulting business.  

					###

	HELPING CONSULTANTS BUILD A BETTER BOTTOM LINE

	For over 25 years Ive provided my expertise to help professional consultants and 
other service providers build a better bottom line through more effective strategic planning 
and marketing.  Having been the founder of a 20 person consulting organization and also a 
freelance consultant, I know what it takes to be successful and what pitfalls to avoid.  

	Much of the above was excerpted from my new Consult and Grow Rich manual.  
For additional FREE information about the manual, please send e-mail to 74201.363@ 
compserve.com or contact me directly if you have any questions about becoming a more 
successful consultant:

Seann Maxwell, President
Maxwell Consultants International
12729 Northup Way, Suite 25
Bellevue, WA 98005
Phone: 206-462-8334		
Fax: 206-462-887