112. How to build downside protection into your consulting business model
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Most of my clients these days are turning into long-term clients, ranging from 1 to 4+ years working together so far. Which is great!
But with that, I get a slight background concern that they could all "ripen" (like a fruit) at the same time and fall off the tree leaving my business cut in half.
I also know that a business needs turnover in order to remain fresh, just like anything else in life.
One of the things I've done to create such long-term clients while still making room to work with new ones is to create a continuity program that costs less but is also much less time-intensive.
It ends up being about 30-40% of the original workload for about 60% of the original price. Which means the client saves considerably on my monthly retainer fee and I get to actually increase my effective hourly rate, freeing up more bandwidth to take on new clients while retaining a solid base of high effort:value work.
It acts a bit like insurance for both of us - they get the value of my mind applied to their business (to a lesser degree than before), which protects their downside and keeps new innovations and ideas flowing in.
For me, it lets me build a stable roster of revenue that keeps me feeling financially secure over time. A win-win.
There are limitations to this, of course. And it's not the only way to do things.
But for me, half my job is to protect the downside for me and my clients while also incrementally building in more leverage to increase the upside for everyone.
Give this a listen and let me know what you think!
—k
Most of my clients these days are turning into long-term clients, ranging from 1 to 4+ years working together so far. Which is great!
But with that, I get a slight background concern that they could all "ripen" (like a fruit) at the same time and fall off the tree leaving my business cut in half.
I also know that a business needs turnover in order to remain fresh, just like anything else in life.
One of the things I've done to create such long-term clients while still making room to work with new ones is to create a continuity program that costs less but is also much less time-intensive.
It ends up being about 30-40% of the original workload for about 60% of the original price. Which means the client saves considerably on my monthly retainer fee and I get to actually increase my effective hourly rate, freeing up more bandwidth to take on new clients while retaining a solid base of high effort:value work.
It acts a bit like insurance for both of us - they get the value of my mind applied to their business (to a lesser degree than before), which protects their downside and keeps new innovations and ideas flowing in.
For me, it lets me build a stable roster of revenue that keeps me feeling financially secure over time. A win-win.
There are limitations to this, of course. And it's not the only way to do things.
But for me, half my job is to protect the downside for me and my clients while also incrementally building in more leverage to increase the upside for everyone.
Give this a listen and let me know what you think!
—k
