After six years of my own consulting business, I figured I had it all worked out. Clients would like my proposals and sign contracts. I’d do the work and submit invoices that were paid according to agreed terms. I acquired a false sense of security. This year, when the economy seems better than in any of the past years, all of a sudden I’ve encountered several hitches and glitches in client agreements. Somebody canceled in mid-project and I hadn’t covered cancellation fees in the agreement. Somebody else wanted to include some new work in an open purchase order, only to find after I worked for a week that the PO had expired and couldn’t get sign-off on a new one.
Pam Slim of Escape from Cubicle Nation has had similar experiences, and she wrote some excellent tips on what to do when expected work dries up. Unsurprisingly, they mostly focus on planning ahead before something happens. (Had I done that, I’d have put a cancellation clause into that contract.) Pam’s tips are (and these are just captions — read the whole post for the details):
- Be extremely generous with your time, resources and referrals to your professional network
- Secure financing and lines of credit before you need it [Fortunately, I did this one!]
- Never get in a rut in your business
- Diversify your client base
- Keep your fixed expenses to a minimum
- Keep your eyes wide open about your market
- Save for a rainy day
- Cultivate a mindset of “disaster = opportunity”
I especially like the last one. When “disaster” strikes, you need to stay cool and figure out what you can do that will turn the incident into an opportunity. Learn something from the experience. Do things differently. Start something new (that you already started preparing for if you were following Pam’s Tips #1 through #4). This attitude will give you a sense of control over the situation and help you move forward out of it.