Growing a business

[Cardinal]

Here's one for the throbbing brain. Let's see if you can give me some ideas.

I have been consulting now for several years. Business has grown erratically, but has grown. It is now at the point where I have about as much work as I can handle, and still have time to run the business (administrative work, marketing, etc.). It also means I am putting in at least a few hours almost every day, and totaling perhaps 60 per week. Mrs. Cardinal has a related background and can help, but really, I need to think about adding an employee. Ideally, this would be somebody with experience that can help to win projects, and would have the ability to do complex work. In other words, an intern or a recent grad might be cheap but they are not what I need.

In terms of a budget, I figure it would take about $100,000 per year to set up an employee and pay their salary, benefits, taxes, etc. We need to come back to my statement above. Growth has been erratic. One month I might bill $30,000 and then nothing the following month. Overall, I need to hit $300,000 per year to make it worthwhile. I am not yet there. And if there is a downturn I can take a severe hit or have to lay the employee off, neither of which is appealing.

I have considered other strategies. I could go with a contract employee, which would cost less and give me the flexibility to let them go if the work load subsides. But then, can I get the quality person I need? Partnering with another company can help to spread out the work, but has not always been a good experience, as in a recent project where the other company's work quality fell far below what I expected, and I had to re-do it before I could pass it along to the client. Besides, partnered firms do not always compete as well for projects, and that approach does not help me as much with my goal of growing the business.

So what other ideas are out there?

[cyke]

Interesting. An intern or something similar would have been my first thought. Given the erratic nature would it be possible to spread out responsibilities amongst two or three part time workers? One for marketing, another for illustrations etc. That way you get specialization without the full time employee expense and can have pay tied to a particular project. It's a nice problem to have I guess.

[nrschmid]

I know several business-savvy planners/designers who run their own one-person firms. When they expand they bring one someone as a part time person, keeping the cards close to the chest, so to speak. They can be hired on contact as a 1099 on a project-by-project basis, but make sure you have a strict non-compete clause. You could feasibly bring on an semi-retired worker/former prinicipal/owner for contract work although you would have to pay more (for a higher billable rate as an executive). I wish there was a an easier way to bring someone on full time and have them grow in the position. I think enough money has to be set aside in advance before making the change to hiring someone full time with benefits.

[OfficialPlanner]

I know several business-savvy planners/designers who run their own one-person firms. When they expand they bring one someone as a part time person, keeping the cards close to the chest, so to speak. They can be hired on contact as a 1099 on a project-by-project basis, but make sure you have a strict non-compete clause. You could feasibly bring on an semi-retired worker/former prinicipal/owner for contract work although you would have to pay more (for a higher billable rate as an executive). I wish there was a an easier way to bring someone on full time and have them grow in the position. I think enough money has to be set aside in advance before making the change to hiring someone full time with benefits.

Nick has it. An independent contractor (1099) on a project-by-project basis.

[nrschmid]

I think the non-compete clause has to be spelled out, especially with certified planners bringing project knowledge from one client/firm to another while working as an independent consultant.

[Kingmak]

Don't rule out bringing on a couple interns with specific skillsets to help free yourself up. Heck, I'll do your graphics pro-bono for my own professional growth if nothing else As a municipal planner with 10-months in, I doubt I'm what you're looking for right now...

[Cardinal]

Damn, got another project this afternoon. Three more proposals submitted in the past week or so, and three more sitting on my desk needing to be prepared.

The problem I have had with using people on an as-needed basis is that they are not employees that I can market as part of my company. Showing depth - more than two people - can go a long way to help land work. That is really true if the employees have a good deal of experience.

My needs are pretty customized at the moment. Most of my work is economic research, economic development, and market analysis, with a bit of business district planning thrown in. I need people who are exceptionally good at research and perhaps complement my skills by having some real estate and finance skills. That is difficult to find even when hiring full time. Finding it in somebody willing to work as needed is pretty difficult.

[chocolatechip]

Do what other planning companies do: Hire young, attractive interns, give them titles like "Senior Associate," and bill their work out at 8 times what you pay them. When they get a little experience want more money/expect an advancing career, let them go and hire a fresh batch from whatever diploma mill is nearest you.

But seriously, I don't really see any viable option other than to outsource everything you possibly can. You don't want to hire someone and then be on the hook for their livelihood as well, given the fluctuations in your income. To do that, you need some partners and other investors to spread out the risk.

[nrschmid]

The problem I have had with using people on an as-needed basis is that they are not employees that I can market as part of my company. Showing depth - more than two people - can go a long way to help land work. That is really true if the employees have a good deal of experience.

Why can't you include their project resumes in your SOQs/proposals? No one is checking to see that they work full time for you, only that they work for your company. Besides, you are preparing a bid in the hopes of landing more work.

[Veloise]

...The problem I have had with using people on an as-needed basis is that they are not employees that I can market as part of my company. Showing depth - more than two people - can go a long way to help land work. That is really true if the employees have a good deal of experience.
...

For my primary consulting business (not planning-related), I offer a couple of options from a menu. If a client wants the upgrade, either I hire or contract with the sub, or I lead the client to their CV and let them choose and hire separately. (My projects are scheduled performances, so if a sub is unavailable at a certain time on the preferred date, we use someone else.) My own website references my "bench" of back-up players, and potential clients can easily look them up.

Seems like you could farm your projects out to contract folks as long as the work is up to snuff and they can meet your deadlines. Look up the thread discussing the Cyburbia project consulting team...likely several years old by now.

[OfficialPlanner]

The problem I have had with using people on an as-needed basis is that they are not employees that I can market as part of my company. Showing depth - more than two people - can go a long way to help land work. That is really true if the employees have a good deal of experience.

Why can't you include their project resumes in your SOQs/proposals? No one is checking to see that they work full time for you, only that they work for your company. Besides, you are preparing a bid in the hopes of landing more work.

Maybe it's an ethical thing, but I have seen RFP/RFQ response packages that have included contract employees.

[mike gurnee]

Too bad I don't have the skill set you need. I could easily work up to 20 hrs a week, on occasion more; or not at all. Surely there are others in my situation. And don't pass over the currently employed who could moonlight.

[ColoGI]

Damn, got another project this afternoon. Three more proposals submitted in the past week or so, and three more sitting on my desk needing to be prepared.

The problem I have had with using people on an as-needed basis is that they are not employees that I can market as part of my company. Showing depth - more than two people - can go a long way to help land work. That is really true if the employees have a good deal of experience.

My needs are pretty customized at the moment. Most of my work is economic research, economic development, and market analysis, with a bit of business district planning thrown in. I need people who are exceptionally good at research and perhaps complement my skills by having some real estate and finance skills. That is difficult to find even when hiring full time. Finding it in somebody willing to work as needed is pretty difficult.

I'm in exactly the same boat. This is part of the growth process and capital needs aren't just at the beginning. My conclusion at this point is I either I need to do the cr@ptacular (and IMHO sad that our economy is heading this way) part-time contractor or I need my late father to have been much richer. ;o) All about the capital. If you don't have it (and who does) our country at this time demand you hire someone who used to have a job as a contractor with no bennies. I don't like it either.

[Jazzman]

I know several business-savvy planners/designers who run their own one-person firms. When they expand they bring one someone as a part time person, keeping the cards close to the chest, so to speak. They can be hired on contact as a 1099 on a project-by-project basis, but make sure you have a strict non-compete clause. You could feasibly bring on an semi-retired worker/former prinicipal/owner for contract work although you would have to pay more (for a higher billable rate as an executive). I wish there was a an easier way to bring someone on full time and have them grow in the position. I think enough money has to be set aside in advance before making the change to hiring someone full time with benefits.

Yeah this is what I do now. I'm a 1099 employee working on a contract basis for a consulting firm that's growing right now, but then again I'm a recent grad so someone in my position will take what they can get, of course.

Best of luck, Cardinal, and good to hear that your business is growing and somebody is doing well in this field.