I take notes in these composition books with graph paper–its easy to draw pictures, take notes, whatever, while I’m talking to a client. Over the years, whenever I’d fill up one notebook, I’d just put it into a banker’s box and grab another blank notebook and keep going. After seven years in business I had 10 of them tucked away.

Today I went through them really quickly and came across some notes I took on November 13, 2004 at a National Speakers Association event here in Austin. If you don’t know Alan Weiss, well, he’s a personal hero of mine. He’s probably best known as the “Consultant to the Consultants.” His book Million Dollar Consulting is pretty much required reading if you want to make it in this business.

Needless to say, when he came to town, it didn’t matter how much it cost to go see him, I was gonna go see him. Alan talked about a number of topics that day, and here’s the rundown/summary. It won’t come close to doing him justice, but there you go.

The key to succeeding as consultants is talking about value. We must make an emotional connection because only through emotion can we incite our customers to act. Making a purely logical or cerebral play will only get them to think–we want them to write a check.

There are 3 requirements in this value scenario:

1) The value proposition itself - in other words, what is the outcome for the buyer?

2) A clear identification of the guy who writes the check.

3) A clear strategy for reaching that person who writes the check.

It’s important to note here that perceptions inform behavior. If you see yourself as a vendor, you’ll act like a vendor. If you see yourself as a partner, then you’ll have a completely different VALUE PLATFORM on which to stand. In other words, lack of self esteem is the single biggest obstacle to success.

The secret to raising fees? No secret at all…just raise them! If you’re bringing value, who cares? At some point, by the way, fees lead value. For example, if you are brought in to speak to the managers of a company about problem X, and you’re being paid $50,000 for that event, do you think they’ll sit up, take notes, and pay attention? Of course they will!

But what if you’re doing it for $500? Do you think anyone will even show up? Or will they send their assistants? You betcha.

Here’s something else that hit home for me that day: consulting is a process, not an event. The value is often in the process, not just the outcome. I’ve experienced this many times–I’m hired to do one thing, and in the process of doing that thing, I notice something else that needs attention, and doing just a little bit of work solves an even bigger issue.

What about value-based fees? If you’re not familiar with this concept, it’s being paid for the outcome or value of the service, not the time and materials or by the project. Asking for value-based fees (and getting them) is seen as the holy grail of the industry. After all, there are only so many billable hours per year, and only so many projects one can take on, so therefore it follows that you’re putting a cap on your revenues unless you break out of that box.

So, how do you get to a place where you can charge value-based fees? The key here is identifying where value happens. Value happens in the outcomes. So you have to know what those outcomes are, and establish metrics for figuring out if you’ve reached them (or missed them). Finally, you have to get the client to articulate to you what those values are.

Let me give you an example from my early consulting days (okay, it was only 2003, but it feels like a hundred years ago). I was working with a Fortune 500 firm that was trying to put together an internal sales portal where they could publish information. I asked them why they wanted to do that, and they said they didn’t want to keep sending out all this sales collateral to all 300 sales offices around the world every time there was a change in an existing product or a new product launched.

I asked them why they were doing that, and they said they didn’t have a good way of tracking who had received which collateral, so everyone got the same care package Fedexed to them every month. I asked them how much that cost them, and they said it was over a million dollars, probably 1.2 million.

So I said, “What if I can make this go away basically forever for forty grand?” Now, at the time, the biggest job we’d ever done was $5,000. Forty thousand seemed like a crazy figure to me, and in fact, I was getting a bit nervous as the marketing manager leaned back in her chair and thought about it.

She apparently made up her mind right then and there, because she stood up, extended her hand and said, “Show me how you’re going to do it.”

Immediately I knew that I should have asked for $100,000 or $200,000, but that was just due to my inexperience. The point is, I ended up spending 100 hours or so on the web portal (at the time I was charging $75/hour, so that was $7,500) and got to take a lot of this money as profit.

By the way, this approach only works if you’re dealing with the buyer–the guy or gal who signs the check. Nobody else matters. Nobody else can make things happen. Alan Weiss pointed out that “Bureaucracy is the triumph of means over ends.”

In other words, its much more important that everyone fill out the blue form first, followed by the green form, which is then faxed to a certain place, then signed by Person X, who then distributes it to departments A and B before it gets final approval from a subcommittee on Y. Meanwhile, you just want to go directly to the person who can hire you or approve your budget.

When dealing with this kind of organization, your best defense is to change the stance from “Should I do this?” to “How do I do this?”

Now you may hear some objects from those who are nervous about buying your value-based fees approach. They may say that there is no money, or that the timing isn’t right, or that they really don’t need it right now but it all comes down to the fact that they don’t trust you.

Listen: there is always money! There is always budget! They can find the budget if they think the problem is big enough. It’s your fault if you can’t figure out a way to get at it.

What isn’t often discussed about value-based fees are the pros of the approach:

• Fees are capped
• There aren’t any hidden gotchas just because they decide to pick up the phone
• They’re dealing with a principal in the business (you)

Remember…lack of trust is the “hidden objection” in almost every case…they just can’t tell you that. They can say that they don’t have budget or the timing is off…but what they really mean 90% of the time is, “I don’t know if I can trust you.”

David Seah’s Portable CEO is a thing of marvelous beauty. The idea is to have a list of concrete actions (each with their own assigned values) to keep you on track and safely away from all those other distracting things you FEEL YOU MUST DO as a freelancer/consultant.

In other words, what this little ingenious tool does is help you focus your executive energies on moving your career forward

Each task on the list is a concrete step that will make your career better, such as doing billable work, writing an article for your blog, or doing some self-promotion work.

The next step in the program is to track how many 10-, 5-, 2-, and 1-point activities you do daily, and to set an arbitrary goal for each day. You can keep track of your progress with another handy little form.

Yes, this sounds silly, but I’ve been doing something like this for several years. Do whatever feels right, as long as it helps you stay focused!

CHECK IT OUT HERE

Recently, I asked my LinkedIn colleagues a simple question:

What is the single biggest mistake you made in your first year of business?

The answers I got back were very insightful. I’ll summarize/paraphrase some of the better ones:

Giving it away for cheap (or free). Pricing yourself too cheap is a huge mistake, but one that everyone seems to make. It’s only afterward that you recognize your own value. Raising your prices is really the only way you can keep the really bad clients away, don’t ya know?

Not paying attention to operations. You may hate all the banking, invoicing, and tax stuff, but you’d better get your head around it. Doing a good job only requires a little bit of your time, and with a part-time bookkeeper (or in my case, an extremely savvy spouse) you can keep the wheels of business turning. Believe me, you don’t want to experience the pain of not getting paid because you were late with your invoices.

Growing too fast. All the business books tell you to market your brains out, get the customers in the door, hire lots of people, set up an office, expand that office, et cetera. But what happens if you’ve got no systems down? Or your product still needs maturity? You’re stuck with lots of irate customers and systems that have to built on the fly.

Not having a focus, or allowing fear to be your focus. Listen, it’s easy to go into panic mode when you don’t have the big paycheck. I know. But you have to master it. Otherwise, every single decision you make will come from a place of fear, uncertainty and doubt. And that’s not good for you or your business. Instead, it’s easier to live and work from your own values. More on that later.

Being a perfectionist. Yes, systems are important. Yes, process is important. Yes, quality work is important. But you have to get things out the door. Everyone understands that sometimes its better to get a good prototype out there and then iterate. Being a perfectionist is sometimes worse than being a complete slob.

Postponing tough decisions. I can’t tell you how many times I should have just fired that problem employee, or walked away from the terrible client, or not agreed to work with such a scummy business associate…but every time, I postponed the tough decision. And every time, I should have just gone in and cut my losses. I learned how to do it, and so can you. Your life will be better after you take action.

Cash is king. Especially if it is in your hand. You can’t pay the bills with profit. Once you learn that cashflow is the number one thing, everything else is easy. Sorta.

Enjoy.

 

  

For those of you who know me, two interesting facts stand out.

1. In high school and college, I was a pretty avid runner, holding records in the 800-meter and 1500-meter runs, and able to routinely run a sub 19 minute 5K.

2. At age 35 (a few years back) I tipped the scale at 250 pounds. Running a mile in 12 minutes was a miracle.

Painfully aware that I was headed down the same unhealthy path as my father and uncle (heart trouble) and aunt and mother (diabetes) I decided the day after Thanksgiving 2007 to start running again. I ran a mile every other day for a few weeks, then kicked it up to 2 miles, and by New Year’s was running a very slow 5K every 2-3 days.

I stayed at that level for about six months, never getting my time below 30 minutes. I participated in a 5K race/run on Flag Day (June 14, 2008) and clocked in a disappointing 32 minutes, but was really murdered by all the hills downtown. In fact, to my chagrin, I had to stop running twice in the last little stretch because I just wasn’t expecting all those damn hills.

But well before this race, I’ve had this obsession with running a 5K in 30 minutes or less. No matter how many times I ran the course in my neighborhood (hills and all, but apparently not enough hills to compare to downtown) I couldn’t come close to a 30 minute time.

So my friend and running buddy Nada (who is a budding triathlete, incidentally) suggested that I change up my routine. Instead of running 5Ks in the neighborhood, just start running in one direction for 20 minutes and then turn around. Ideally, you’ll make it all the way back, but even if you don’t, you’re building up your endurance.

After a few weeks of that, she said, start bumping up your time until you’re turning around at 30 minutes.

So off I went, running for 20 minutes and then turning around, and doing that every other day for a week or two. Then last week, I bumped it up to 25 minutes on the turnaround, and did that a few times. Once I ran at high noon, which sounds crazy for Austin in July, but it was okay, I made it through alive.

Last night I got home really late from work and was just jumping out of my skin. I needed a run so badly, but I only had a very small window to play with. So I took off on a 5K, my first since mid-June. I clocked in at 29:51.

The lesson learned? If you want to hit a goal, stretch yourself in training. Train past the goal, and you’ll eventually hit it. How does this relate to the SOHO business owner or freelancer? Well, it’s simple really. Whatever goal you set for yourself, go the extra mile beyond it.

• If your goal is to make 100 cold calls this week, make 200 calls.
• If you goal is to land five Fortune 100 clients, go for 10 or 20 instead.
• If you want to book $10,000 in fees this month, try to land $15,000.

After a while, if you stretch yourself enough, you’ll see that the original goal isn’t quite as unattainable or difficult. I certainly felt that way on my run yesterday. I remember thinking, “Why did I think this distance was so hard to run before?” And it’s simple–after you run for an hour at a time, running for just a half hour isn’t a big deal at all.

Social bookmarking has become my constant companion these days. Any task that involves online research means using that friendly little Del.icio.us widget in FireFox or Safari.

For those of you who don’t know what social bookmarking is, or have never visited Del.icio.us (the best known social bookmarking site), the idea is extremely simple and therefore extremely powerful. Instead of hording away your bookmarks in some private cubbyhole, you tag them using the Del.icio.us service and share them with the community at large. You can even add little browser widgets that let you bookmark things you run across to make this task easier.

When you come across an interesting page (such as this blog post), you can bookmark it and then tag it using keywords. For most pages, Del.icio.us will provide you with recommended tags, including a full set of the tags you’ve already used in the past. You can also add comments of your own.

Another extremely useful way to use Del.icio.us is as a search engine. If you’re interested in a certain topic, run a few keyword searches and see what others have bookmarked. It’s an easy way to explore a wide range of topics. You can easily add anyone else’s bookmarks to your own personal set.

How do you keep them organized? Easy enough–you can sort them alphabetically or by frequency, view them as a tag cloud, and even bundle tags together to form more pleasing arrangements.

Give it a try, see what you think. Check out my tags at http://www.del.icio.us/myerman

Yes, that’s right, I’ve made plenty of pennies helping companies establish blogs, online campaigns, and microsites–not to mention social networks, et cetera, et cetera.

For the solo freelancer or consultant, though, there’s some value to the old-fashioned high-touch (as opposed to new-fangled high-tech) approach. For example, meeting prospective clients face to face, shaking their hands at a social gathering, reading their body language at a conference, sharing drinks at a networking hour, or giving a talk to a group of colleagues can advance your career in ways that a more automated email campaign or LinkedIn profile can’t.

Furthermore, I’d argue that taking it slow can reap huge rewards no matter how you conduct your marketing efforts. For example, if you attend a networking event, having three 20-minute conversations with new people is better than having twenty 3-minute conversations. Having three fantastic testimonials on your web site is better than having ten mediocre ones.

In the end, I find it amusing that all of our terrific 21st century technologies just make it easier for us to conduct business like in ancient times: it all comes down to relationships and communication. In the old days, if you wanted to buy from a trader, you went with the guy your friends and family trusted. You made a name for yourself as a businessman by delivering on your promises, one job at a time.

It’s easy to forget that in this hyper-quick world of blogs, social network sites, and 200 emails a day.

 

   

My little consulting practice, Triple Dog Dare Media, just turned seven this summer. In my mind, the business celebrates a birthday every May 1st, because that is when I left corporate serfdom to strike out on my own. My wife, however, reminds me that our date of incorporation actually happened closer to June 15th, so I compromise and just say “we turned seven this summer.”

In any case, it wasn’t until the company’s sixth birthday that I realized how truly miserable I’d become. This is probably a funny way to address the topic of business ownership and freelancing in a blog such as this, but I believe in being honest above everything else.

Don’t get me wrong. At the time, I could have been judged successful in just about any outward way of measurement. I had lots of clients, lots of business, cash flow was good, projects were rolling in regularly, and life was good. I had an office, three or four employees, about half a dozen contractors, and days chock full of meetings, emails, phone calls, and everything else a business owner might want.

Except happiness.

You see, I had spent the previous five and a half years single-mindedly going after a specific task: building a business. Unfortunately, I was building the kind of business that every one else wanted me to have. The experts said I should do thus and so, and I did it. My fellow small business owners said you must have an office and employees and overhead and go after increasingly bigger projects, and I did.

Then one day, I said, “Wait a minute!” I wasn’t doing stuff I loved. I was working with a bunch of clients I didn’t respect, working on projects I had no love for, merely to meet payroll for a group of employees I’d come to deeply dislike. And I’m sure the dislike was mutual by that point.

So I declared a do-over. I fired the clients. I fired the employees. I sublet the office space. And for the next year, I concentrated on building the kind of business I wanted:

• Smaller projects
• Less overhead and HR hassles
• More meaningful contact with customers
• More focus on results instead of billable hours

Is my way the only way to go? Certainly not. But it is my way. And it is aligned with my values. Not anyone else’s. It only took me six years to realize it. Thank God I’m so smart!

My advice to you is to figure out what your values are, then go build the business you want to have. And ignore everyone else who says different.