As I ramp up my new business Tubarks Consulting, I was interested in what experienced business owners could share. Susan Onaitis, president of Global Learning Link, certainly did not disappointment. She discussed different business models, ways to get your first contract, how to keep a regular stream of business coming in, setting up a fee structure, and ways to get started. Lots of great advice for this short session.
Onaitis joined a small consulting service then branched out on her own with the lessons she learned. She stressed that the type of business that you what will dictate the model you will choose. You will have to decide upon a number of variables. For example, Do you want to serve small businesses or corporate entities, you will do different things for each. You will need to make decisions about finance, marketing, and other items. Your exit plan can help shape which model you will choose; are you planning to sell the business? Most importantly, why do you want to start this business?
- #1 Sole Proprietor
- You do everything
- You get all the benefits
- She created a virtual company. Partnered with subcontractors. Paid the fees requested of subcontractors. Cost plus 25%
- #2 Partnership
- Like a marriage
- Look for a partner who has different strengths.
- Sharing the burden.
- Can bring in more work because of split labor.
- #3 LLC or Inc.
- Tax protected will protect your personal assets.
- Good model if you wish to sell it in the future.
She recommended to talk to a lawyer for best model.
Ways to get first contract
To get her business off the ground, Onaitis laid the groundwork while working in previous business. She did as much training as possible, joined professional organizations, etc. She saved up money for first years.
Develop your network ahead of time. She had networks lined up. She developed these relationships over time. She recommended joining professional organizations where target client is an active member. People will respond to you more if you are a contributor rather than just a taker.
L&D Brokers are another place to find work. They find the business and then match you up. The pay is not as much. Ensure you have brokers pay your fee first, and then they can add their fee on top.
You can also subcontract with successful L&D consultants. Again, the pay is not a lot. However, you can develop a sharing network. Important to note that you cannot solicit business from a company you subcontracted for.
Onaitis uses own contract whenever possible, and she requests 50% up front. In contract, she notes joint copyright so they can use in company with trained trainers. She also charges separate for the analysis; the training may not be necessary. She does not do training when training is not needed.
Proposals are a critical to prevent scope creep.
Staying off the business roller coaster.
The business roller coaster can lead to “feast” or “famine.”
Be disciplined to make two client contacts per day. She does her own marketing. Does not use CRM… old fashion.
- LinkedIn – Use introductions
- Use social media informing others that you have started your business.
Tips for finding the right contacts
- Find companies with varying fiscal year.
- Keep in touch with people.
- Don’t burn bridges.
- Start with VP, Sales, or VP, talent development
Must have a good skill set in the business you are in.
Setting up fees
- Price can be negotiated, fees not so much.
- Do not cut your fees… walk away from deal.
- Line in contract – if travel is required, then a separate invoice will be billed.
- She raises her fees each year.
- Find out what others are charging. Target client – size and industry. Know the going rate.
- Charge based on scope. Project fee.
- Can expand industries by leveraging best practices. E.g., social media for colleges, or manufacturing.
- Geographical location, e.g., Jamestown vs NYC
- Your credentials & expertise.
- The marketplace – What will the marketplace bear.
She does not change her fees based on location. She qualifies why here fees are set.
5 steps to get started
- Business identity – rent office, dress the part, Website, etc.
- Look at legal requirements.
- Figure out your target client
- Lead generation
- Lead generation – take sales courses.
This was a very enjoyable and informative session. Just getting started, it was great to hear this type of advice.