Tips for Consulting in a Recession

Consulting in a Recession

empty city

These tips will not only help you survive during the pandemic and its economic downturn, they will help you thrive and accelerate as communities and the economy recover.

Plan for the Long Term

Any good consultant or independent professional needs to plan for the most probable future and be agile enough to adapt to worst case. Epidemiological and economic reports in The Economist, the Imperial College of London, and the US Centers for Disease Control and Prevention forecast social distancing and probable economic recession until at least 2022.

Epidemiologists forecast it will likely take at least 18 months to develop vaccines and therapies. More months are needed for vaccination and therapy distribution. The latest research also implies COVID-19 will recur in waves especially in areas like the US that lacked a cohesive, disciplined plan. In addition, the world faces broken supply chains, nations moving to isolationism, trade wars with China, and a frightened society that will take time to heal.

“Shutting down was hard but opening up is going to be harder.”
Rich Lesser, CEO of Boston Consulting Group
New York Times, April 27, 2020

Execute the action items below and your consulting will be ahead of your peers during the recession and more prepared for the recovery. 

Strengthen Personal Bonds

It is easy as a consultant to spend long hours creating and working on projects. The danger in this is that we lose connection with people we should be closest to.

Connecting in Isolation

As I write this, in northern California, our family has been under three months of self-imposed isolation and the state has been under two months of Shelter-in-Place. We are limited to walking in our neighborhood and shopping for food. While devastating socially, it has been highly effective in controlling the spread of COVID-19 in our county.

What I find interesting is how more engaged our family and the neighborhood have become. My wife and I walk twice a day and now know, at a social distance, more neighbors than every before. We have chats on Zoom with our extended family ranging from one year old to 95 years old. In fact, we just had about 12 people in Zoom for a one-year old’s birthday party.

Boredom = Creativity

My 18-year old son, an “online” college freshman, has become (partially) bored with online games and has been into my office three time today with Rube Goldberg machines and sculptures he crafted from iron fencing wire. He just told me his next project will combine a wire sculpture with parts he creates on his 3D printer. Boredom is sparking creativity.

If you have younger kids it is amazing how an entire afternoon can be spent with old magazines for pictures, paper for drawing, cardboard for structure, scissors, and glue. I remember when my kids were young, we spent hours on the floor with boxes of Legos and a miniature train set. Rather than prompting (nagging) your kids into creativity, just put the raw materials on a table, start creating something yourself, and let them join in.

Communicate with Colleagues

Stay in touch with your professional community. Of course, that includes your work team, but it also means your business colleagues and the folks you talk with at lunch. Just a quick connect at the end of the day can keep connections open. Do not make it long unless you are sure the other person has the time and interest. All it takes is a “Hi” or “Did you see what happened to XYZ Corp.?”

Add a Personal Element to Zoom and WebEx Meetings

Some people and teams are having trouble building a personal connection over Zoom or WebEx calls. Meetings get impersonal when all you see are heads and shoulders and you can’t read body language.

One way to open up in a virtual meeting is by touching base with how everyone is feeling. That does not have to be a “Woo Woo” thing. There is a way that works for many team meetings. (Granted this might not work for an executive meeting on finance.)

Start your meetings by doing a Round-Robin and having each person describe what type of weather system they are right now. For example, yesterday I entered a meeting as “Sunny and bright through my window, but when I pay more attention, I see tree leaves blowing chaotically. While everything feels sunny, something unknown is looming over the hill next to my house.”

Join an Online Consulting Community

Join an online community of consultants and independent professionals. These are great for trading ideas and holding each other accountable for action items. Building an online consulting group will not only increase your professional skills it will help you build a tight network you can call on.

You need to stay in touch with a professional community to learn new concepts, brainstorm scenarios, test ideas, and socialize. Find and join an online consulting community. 

Control Expenses and Manage Finances

It is critical during these unpredictable times that you reduce expenses and control finances, outgoing and incoming.

Discretionary Spending

Eliminate discretionary spending. During isolation some discretionary expenses, such as Kindle books, Audible, or cable networks may move from discretionary to mandatory mental health precautions.

Do not wait until the end of the month to check your accounting. Check it weekly. 

Build Reserve Funds

If possible, save during the downturn. Cut all discretionary spending and put any extra into a reserve fund. A reserve fund not only gives you a shock absorber it can be rocket fuel when the economy turns up.

Watch for Bonus Deals from Banks or Credit Cards

Banks like Chase and Citibank in the US have recently had bonus deals for new credit card, checking, or savings accounts. For example, in Q2 2020 opening a Citibank checking account with $5,000 dollars earns a bonus of $200. They have bonuses up to $1,500.

Reduce Subscription Services

During good times it is easy to subscribe to too many online services - services we only occasionally need. Look through your subscriptions at work and home. Between office and home our family saved almost $400/month by eliminating or changing the frequency and level of subscriptions.

  • Check for low-cost or free alternatives. For example, I have found Pixlr.com/e easier to use than Adobe Photoshop and it has all the features I need. There is a free version and an extremely low-cost subscription version. Combine Pixlr.com and Canva for about $15 USD/month for amazing graphic editing and access to libraries with millions of high-quality free photos.
  • If you do not use a subscription app for two or three months it will probably be less expensive to use a monthly subscription. Do the math. 
  • If you use a SaaS app every month, then get an annual subscription and save money. 

Collect Invoices

Collect on outstanding invoices as soon as possible. You do not want to bankroll your client. I have known multiple consultants who were stiffed out of tens of thousands of dollars by clients who delayed or never paid their bills.

Rent Out Unused Space

If you have office space, you may be able to rent out your unused space. In the early 2000s, I founded a SaaS knowledgebase for tech specialists. We gained extra time during the Dot Com crash by renting out extra office space to solo attorneys.

Downsize Housing or Office Space

My start in independent consulting came just months before the Black Monday stock market crash in October 1987. I sold my house, bought a duplex, rented the other side, and lived there for two years until the consulting picked up. However, I had no family at the time so I was very flexible.

Reduce Mortgage Costs

Now is a great time to refinance your home. Rates are at historic lows. We are in the midst of refinancing with Quicken Loans (Rocket Mortgage). If you have over $250,000 in a Schwab account, then Schwab and Rocket Mortgage can give you a minimum interest loan and even cut decrease the rate by another 0.25%. (May 2020)

Donate

It might seem strange to have “Donate” as an action item for financial conservation. However, your community depends upon you. During the recession, service people and people without computer-enabled jobs have been especially hard hit.

During Shelter-in-Place in California our family has continued to pay our service providers by paying for haircuts we could not get, lawns that were not mowed, and take-out meals and gift cards from favorite restaurants (we did relish these).

Donate to your community food bank. They are harder hit than at any time in since the Great Depression.

To donate to larger organizations, consider,
Charity Navigator
This is the largest and most used evaluator of charities in the United States and its environs.
https://www.charitynavigator.org/

Nicholas Kristof’s C-19 Impact Initiative
Here is Kristof’s list of five organizations on the frontline of fighting Covid-19.
https://kristofc19impactinitiative.org/

Doctors without Borders
An independent, global movement providing medical aid where it’s needed most.
https://donate.doctorswithoutborders.org/

Reexamine and Refocus Your Niche

One of the most important, if not the most important, things you can do to improve your consulting business is finding and focusing on the right niche. You cannot catch fish if there are no fish in the stream.

Two-Pronged Niche Selection

During a recession it is a good time to take a three-pronged approach to your niche.

  • Engage actively with the highest quality clients in your current niche. (See the following section on engaging clients.)
  • Prune your client list by eliminating low-quality clients that sap your time, cause aggravation, and have low ROI. Replace them with high-quality prospects and clients in the new niche.
  • Look for a higher quality niche where you can go deep and wide (explained below).

In our course, Starting and Building a Thriving Consulting Business, we go into extensive help and show how to find your best, growing niches.

Some Grow, Some Go

In downturns some industries and businesses grow, and some go broke. Check financial reports for industries that are growing and that can use your unique skills. For example, the pandemic is expected to have limited impact or increase demand in industries like,

  • Healthcare 
  • Banking
  • Accounting
  • Government
  • Ecommerce
  • Internet SaaS
  • Tech Hardware
  • Online Entertainment

The pandemic is having a terrible impact on businesses that depend on public groups, like restaurants, athletic games, and travel industries like hotels, airlines, and cruises.

In our course, Starting and Building a Thriving Consulting Business, we go into detail on which industries and companies are growing and declining and how to find the clients and people you want to work with.

Go Deep

Prepare for economic recovery by increasing your deep skills in vertical industries with good or stable growth prospects. Use “free” time to Up Skill and rebrand yourself so you have deeper knowledge in your niche.

A later section, Re-Skill, links you to many free or low-cost educational resources.

“Go Deep” in niche skills should be a partner strategy to “Go Wide” geographically.

Go Wide
Social isolation has pushed consulting to go online. While consultants seem to initially be confused by moving their skills online, doing online consulting can work extremely well and has read business advantages.

Almost every consulting skill you use onsite you can do online. With the online tools we teach in our courses you can do interviewing, team brainstorming, mind mapping, project management, skills instruction, strategic planning, and more. I personally have not found the limit. (I understand some venture capitalists are demanding face-to-face meetings at critical points. For that type of money and risk it makes sense.)

Go Wide geographically works as a perfect strategic partner with Go Deep in niche skills.

Once you develop your online consulting skills the entire world is open to your consulting. It is as easy to market to a prospect in Austin, Texas as it is to a prospect in Perth, Australia.

If you have developed deep skills in a niche, you can use LinkedIn to find specific people in any country and then use digital marketing to market to market to that specific individual. What might have been a small number of niche prospects in your local area now becomes huge.

The Starting and Building a Thriving Consulting Business teaches you all the skills you need to Go Wide and Go Deep.

Prune Your Client List

Once you begin getting clients in your Go Deep, Go Wide strategy, you need to start cleaning your client list. Remove low quality clients that are time and energy vampires.

You know the bad clients. They do not know how to run their business, they consistently ignore advice, they change their minds after you have agreed on a Statement of Work, they pay late, and they delay projects. They suck up the time you need to market and engage with your newer higher quality clients.

Help Clients Manage Pain

Work with your clients to ease their pain. Do not try to scrape every penny out of your current contracts. Nurture them.

Be Honest About Client Priorities

Helping your clients evaluate priorities can open new work for you in the future and cement a better relationship. Talk to them,

  • What are the new priorities?
  • Do all tasks in the current project need to be accomplished? 
  • Is there somewhere I can be of more service? 
  • Do they need to postpone or defer?
    (You would be told anyway but by being proactive you come out as a hero they will call as soon as the situation improves.) 

Reposition Yourself

If your client’s organization is in turmoil you may be able to help them with one of your other skills. For example,

  • Can you reposition yourself as an outside, objective facilitator to lead brainstorming, project management, or strategy meetings? 
  • Can you be the objective consultant who evaluates strategic risks, identifies critical employees, or defines budget cuts?
  • Can you develop a business continuity plan to manage risks and move forward?

In times of stress and pain like now it is easy for executives and management to be overwhelmed by the “fog of war.” You can help by being an objective advisor.

Develop Continuity Plans for Closing Projects

If projects are being stopped or deferred, remind your client how much waste there would be in getting back up to speed when the economy returns. You need to capture the data, resources, information, and knowledge to get up to speed quickly. If you have ever had to rebuild a project that was put on hold for months you will remember the pain of trying to remember how all the pieces go back together. 

Never Waste Time

If your client says to “Stand By” as they reevaluate projects and strategy, do not waste time. Give yourself a day off for “a mental health reset” and then jump into working on your own Engage, Engage, Engage and Market, Market, Market.

Engage, Engage, Engage

Most of your clients and prospects are facing incredibly difficult times. They need to know help is available and someone is listening. This is a human-to-human need, not a technical skills need.

Connect

Call your prospects and clients. Do not try to sell them. Just talk with them and listen. You want to keep your name in front of them,

  • Ask how they are doing and their worst pains
  • Share contacts that might be able to help
  • Share industry info that might help them

Do not sell, but let them know you have repackaged and repriced services to make yourself available in tough times.

“I know the environment is terrible right now, so I’m trying to help my clients by repackaging and repricing my services. I just wanted to let you know that I’m adapting to help you.”

Engage with Free Online Sessions

Do not do free consulting, it commoditizes your work and that of others. But you can present free webinars, online briefings on industry trends, and skills refreshers to clients and prospects. All of these are services that will benefit your prospects and clients, can be replicated across many showings, and will keep you top of mind. When the time comes to hire a consultant or independent professional for larger projects, they will remember you.

Host Virtual Management or Founder Roundtables

Founders, executives, and managers often do not have peers they can talk openly with. This gives you the opportunity of creating once-a-month online meetups in a non-competitive environment. Start them by delivering a 20-minute presentation on a topic of interest, then open for deeper discussions.

Market, Market, Market

Once you have a strong niche identified you want to really work on marketing. Any time you do not have billable hours or are engaging prospects and clients you should be marketing.

Marketing is not selling. Marketing is identifying client needs, increasing awareness, positioning and strengthening your brand, and creating demand.

Now is not the time to sell vitamins. Most of your clients and prospects do not need vitamins, they need bandages and tourniquets for severe puncture wounds. Focus your marketing on your prospect’s problems and how much better they will be with your solution.

Finish Your Dream Project

You have probably read multiple times about what Shakespeare and Newton did during their isolation in the plague years but let me remind you.

Shakespeare wrote four of his best plays in London during the plagues. Many of his younger playwright competitors died from the plague which opened the theaters to his new style. (Interestingly, even though he was surrounded by the plague he only mentions it once in all his plays.)

Sir Isaac Newton isolated himself twice at his mother’s farm while Cambridge was closed during the Black Plague. While avoiding farm work he developed his Theory of Gravity and started work on what later became Calculus.

So what was it you wanted to work on?

Write an eBook

Feeling humbled by Newton and Shakespeare? What about taking on that eBook you have thought about writing?

Books, articles, and speaking are the three pillars to being recognized as an expert. 

I can vouch for writing books, articles, and speaking as a path to branding yourself as an expert. I have written 27 books published by Macmillan and J Wiley. I can tell you from many experiences, drop a book on a prospect's desk and you close the contract.

Also, check how Dorie Clark worked her way up to being selected as one of the Top 50 Business Thinkers in the World by writing magazine articles, writing published books, speaking, and becoming a Forbes and Harvard Business Review contributor.

If you have not written before, let me tell you that writing can be much easier than the ordeal you remember from school. Here is a condensed version of the steps we teach for writing,

  1. Outline your thoughts. Just let it go.
    MS Word's outline features and short cut keys for moving blocks of text is powerful.
  2. Go through your blogs and cut and paste sections into the outline.
  3. Fill the gaps with fresh research and writing. I recommend just pasting in links and notes.
  4. Read through and write using stream of consciousness. Do not stop and edit, just keep going. Forget the spelling and grammar, just write.
  5. Reorganize blocks of text using Word's oulining and shortcut keys. Review your work and smooth it out.
  6. Cut, cut, cut.
  7. Hire a freelance editor to edit it. (Never do your own final edits.)
  8. Make your eBook (PDF) available on your website.
  9. Publish a Kindle version on Amazon. Use it as a special offer online.
  10. Publish a Print-on-Demand (hard/soft cover) book.
  11. Give the Print-on-Demand book to prospects. (It will be remembered.) Sell it online "for the price of shipping" (usually $7) as a gateway offer to test the commitment of people on your mailing list.

Write Collections of Topics

If a book feels too daunting, you can develop your expertise and prove your expertise by writing articles. Short-form writing that will prove your expertise includes,

  • LinkedIn Posts
  • LinkedIn Articles
  • Blogs on your site
  • Medium.com articles
  • Magazine articles
  • Forbes contributing author

In the Starting and Building a Thriving Consulting Business course we teach you how to leverage LinkedIn Posts and Articles with your website blogs to create a blockbuster client magnet.

Move Your Consulting Online

Working from home is proving to be highly effective for many computer-enabled businesses. Working from home is more efficient and cost-effective than spending hours commuting or flying thousands of miles to see clients.

You must become an expert in online consulting and meetings.

Click here to learn more about delivering your consulting services using online tools.

Repackage and Reprice

During a recession or volatile economy clients do not want to take on large projects with large consulting fees. What consultants must do is repackage and reprice their consulting services into discrete “chunked” packages.

Repackage Your Consulting

The value you deliver does not have to be onsite or in person. The pandemic is forcing the world of consulting to accelerate in a direction it was already going. There are many ways to deliver your solutions without being onsite. In fact, repackaging your consulting services enables you to create multiple streams of income.

Packaged services as discrete units or solution packages allows you to deliver solutions at any time, any place, and to different client profiles. Your pricing can also be adjusted to fit smaller price-units.

In the training world I have heard of this referred to as a "menu of services." The client can choose exactly which services they want from a menu of discrete elements. This is counter to the strategy used by large consulting firms of getting into a client and expanding the scope. Packaged consulting services work because you can serve more people, through different channels, and turn it into multiple streams of income.

If you have consulted in the same niche for a few years you know that 80% of some jobs are duplicate work. You can chunk or productize those repeatable portions.

  • Productize Services
    After delivering many consulting services it becomes obvious that there is a step-by-step process that can be productized. Can you put that into a template or workbook format that you can follow for each client?
  • Create Discrete Chunks
    Every client and student I have known liked to get “stuff.” Can you create standardized workbooks, worksheets, interview forms, and PowerPoints to guide you and the client?
  • Online Courses
    Are there elements of the consulting that can be delivered with online courses, quizzes, or certifications? That can make delivery automated, faster, and easier.

Reprice Your Consulting 

In this age of client frugality, you may want to completely rethink consulting’s history of “large lump sum” pricing. The way to get around these large lump sums that will not get past accounting is to reprice your services into chunks that match your repackaged services.

Some way you can reprice are,

  • Minimal Pricing
    Always have a bare-bones package and price that gives the rock-bottom service. You do not want clients to choose this package, but it sets a psychological floor for the minimum.
  • Bundle Pricing
    Bundle related services into a package and offer them for less than the total of the individual services.
  • Concierge or Platinum Pricing
    It’s always a good pricing strategy to have a low-priced package with minimum features, a mid-priced package with more features and good margin for you, and a high-priced package that includes customization, mentoring, one-on-one follow up, and so on that is high priced. Use Platinum pricing to help sell your mid-priced package. 
  • Up-Sell Pricing
    Offer an up-sell service that takes the standard package to a higher level by adding a unique service. For example, a service of a standardized new manager’s onboarding course might use an upsell by adding a one-hour mentoring session for each manager.

Online consulting and training can deliver the same value faster while saving on travel costs, hotel costs, and time out of office.

Value-based pricing is difficult to sell even in a good economy. During a down-turn it could be impossible for all but the top 1% of consultants.

Work as a High-Level Freelancer

Consultants and high-level freelancers are different in two ways. Freelancers work by the hour or on small projects and they do skill-based work, for example, coding, analytics, etc. Consultants usually work on results-based larger projects and are paid for their advice and decisions.

In robust economies clients have the budget and long-term plans to hire consultants. In recessions they become more conservative, they may not have the budget, and they do not want to risk long-range plans. If you are a consultant without a stable of clients or you do not have a strong brand, you may need to freelance until you can build your brand and the economy improves. Remember, continue working on your branding and marketing so you do not become stuck doing hourly freelancing.

One danger of freelancing is becoming commoditized by sites such as Fiverr or Upwork. To stay away from commoditizing yourself and working for lowest dollar, keep engaging and marketing to build your brand and image. You want to make yourself as valuable and unique as possible.

Expand Your Experience using Pro-Bono and Low-Bono

Pro-bono and low-bono (highly reduced fees) can work during recession as a way for you to learn new skills, gain testimonials, and build your recognition in a new niche.

After 13 years as one of Microsoft’s first independent consultants I was burnt out from overwork. I decided to pivot to corporate strategy and strategic performance management, but I had no experience there. The first two consulting assignments I did in this new niche were pro-bono for a children’s agency and then low-bono for one of California’s largest regional performing art centers. That gave me testimonials, experience, and proved to me that I loved the new niche.

Re-Skill and Up-Skill

One of the best ways you can spend any “free” time you have during a slow-down is to up-skill and re-skill.

Past recessions have shown that the consultants and professionals that use slow time to add to their professional skills with college or professional courses and with industry certifications accelerate past their peers as the economy rebounds.

Every consultant and business professional should have deep knowledge in their specific trade and a working knowledge across all aspects of their industry. In addition to your vertical skills you need to build your marketing and sales skills.  

Where are your gaps? Where can you use more professional power?

Massive Open Online Courses (MOOCs) –University Level Courses

MOOCs are freemium online courses available to everyone. Originally MOOC courses were free, however, some courses now charge a fee.

These are in-depth college-level courses. Courses are posted by top universities and taught by professors from colleges around the world, such as, Massachusetts Institute of Technology, University of California, Berkeley, Harvard University, and more.

https://www.mooc.org/

MOOC Massive Open Online Courses

edX - Industry Certifications

edX delivers professional certification courses on many industry topics. Online certification courses are also a great place to meet your peers and expand your network. Stay in touch on LinkedIn and email with the people you meet in these courses because they can give you a heads up when opportunities appear.

https://www.edx.org/

edX Certification Courses
edX Course Lists

LinkedIn and LinkedIn Navigator Free Courses

You know LinkedIn as a path to finding and connecting with other professionals. But LinkedIn has another face, LinkedIn Learning. LinkedIn Learning has thousands of courses for professionals and business people.

Most courses are low-priced. If you have a free LinkedIn membership you have access to the LinkedIn Learning courses on working remotely.

https://www.linkedin.com/learning/paths/remote-working-setting-yourself-and-your-teams-up-for-success

LinkedIn Learning

If you subscribe to LinkedIn Navigator, then you have free access to all the courses in LinkedIn Learning.

While LinkedIn Navigator may look expensive it is without a doubt the most precise way to find exactly the professional or businessperson you want to connect with. In our course we teach how to use Navigator to find, connect, and engage with your most qualified prospects.

Ted Talks
If there was a single site that made the internet worthwhile, I think I might vote for TED Talks. It has talks ranging from happiness to business startups to global climate change.

https://www.ted.com/talks

YouTube
Of course, you know YouTube for its videos of cute cats and stunts with the dialogue “Hold my beer and watch this.” YouTube is also an incredible source for content on topics such as LEAN Startup, business model canvas, speaking, and more.

When you find a great topic or speaker on YouTube, click the Subscribe button under the video. The subscription page will often have more content from the authors collected in a Playlist by related topic. So, skip the cats and the cute ferret tricks and amaze your mind.

Use Your Time Wisely

The pandemic, isolation, and economic recovery create immense amounts of stress for all of us. One of the critical ways to use this imposed time for self-reflection is to build your future self. Use the time wisely.

Forces beyond your control can take away everything you possess except one thing, your freedom to choose how you will respond to the situation.
― Victor Frankl