15 ways to get paid with less hassle as a freelancer (or consultant)

These are the techniques I’ve found most effective to get paid fast when doing technology freelancing.

1. Ask for a portion of the fee upfront.

This one seems obvious to me now, but I went several years before I moved beyond the “work a bunch of hours then send an invoice and wait” model. You can do this whether you are fixed fee or hourly, basing the latter on an estimate.

2. Ask for the entire fee upfront.

You’d be surprised how acceptable this becomes once you simply start making it your convention. And, really, it’s not all that strange when you consider that you can’t drive away with a car (or even walk out of Walmart) before paying for your purchase, as well as the fact that in most cases you are taking on greater risk than the client is by working on a project for a client for a few weeks or months with only the “hope” that you’ll get paid at the end. You are a freelancer, not your client’s banker/lender.

3. Set expectations upfront.

If the buyer can make the full investment decision upfront, rather than hope or guess, it’s easier to get paid faster. A lot of delayed payments are really because the buyer is disappointed with either the fee, the value, or the result. If your fees are fixed and thus entirely set upfront, this is easy. If you charge hourly/daily/weekly, estimate conservatively and… see the next item.

4. Offer compelling value.

I prefer to not only discuss the project upfront, but to then come back to the client with a written summary (which ends up being the proposal). The summary is in my own words but drawn entirely from our discussions. It contains, at a minimum, with a nod to the value-based fee model taught by Alan Weiss:

  • The situation appraisal
  • The business objectives (outputs/improved conditions) tied to the work
  • The believed value of the work (business-wise and sometimes personally and professionally for the buyer)
  • The implicit or explicit metrics or indicators of success for the work against the objectives

In this way, the buyer and I don’t proceed until there is a true “meeting of the minds” over the value of the work. It’s easy to get into a discussion about the inputs (tasks), but the real value is in the results. The better understanding I have of the ideal result that the client has in mind, the closer I can tie my work to compelling value. And the happier the client will be to pay, period.

5. Constantly communicate.

You know when you should be providing updates. Generally it is whenever you’ve promised to, just before or after major milestones, when there are hiccups that may impact scheduling or results, or any other time you know you should but are avoiding doing so only because you are concerned about the reaction. 🙂

6. Meet commitments.

If you make a promise, meet it. Simple, but not always easy. If something isn’t going as planned, just communicate that and adjust. Unless you make a pattern of it – or don’t learn from your mistakes – it’ll be probably okay.

7. Use plain language. (Avoid legalese.)

Don’t create proposals that require legal departments / attorneys to get involved. And if you can’t avoid it entirely, keep them sane. Business is risk.[1]

8. Make it easy to pay you.

Accept checks, eChecks (ACH), and all major credit and debit cards as well as, if possible, via multiple processors. I accept payment via PayPal, Google Checkout, and Stripe. There is overlap between these, but every buyer/client has their own favorite service. I don’t care which they use, just as long as they pay as promptly or – preferably – as rapidly as possible.

If you are concerned about paying 2% to 3% on credit card transactions, you are overlooking that you are in a high margin business. Paying 3% on credit card transactions will make you cringe sometimes, but don’t overlook the big picture. You are providing a service with an 80%-90% profit margin. And, having money in your hand – rather than “in the mail” – is the difference between an actual sale and just talk. It’s also the difference between putting food on the table and starving waiting for money to arrive in the indefinite future.

9. Follow-up when a payment is late. Do so immediately and in a professional, consistent, and assertive manner.

I suggest clear language that doesn’t whine (it’s not their problem you can’t pay your mortgage, but it is their problem they are failing to fulfill their commitment). I prefer automated follow-up so that it always happens, otherwise I will put it off. Most on-line invoicing solutions can be set-up to do this automatically for you after a configured number of days.

10. Always make payment arrangements and discuss payment problems with your buyer (the decision maker / business sponsor), not the client’s bookkeeper or accounts payable department.

The buyer can escalate, assert their authority, and negotiate when there are problems. They are also the one who is impacted if a missed payment results in a project delay. The A/P department on the other hand isn’t any of these things.

11. Generate professional invoices that are easy-to-read.

They should clearly describe the work, account for every hour (if you are billing for time), and reference the project, proposal, and buyer clearly. Make them very simple, without any extra language or legalese.

12. Send invoices in a timely manner and do so consistently.

Immediately upon gaining agreement on a proposal. Consistently at milestones or the agreed upon dates. If possible, generate and schedule delivery ahead of time. If a series of invoices is likely, you can even provide them all upfront with rolling due dates, if that seems like it’ll be helpful.

13. State a late fee on every invoice generated that applies if it is not the balance is paid in a timely manner.

Pretty self-explanatory. A flat fee or charging interest are fine, but if the latter make sure you understand usurp your state/country specific restrictions on charging interest.

14. State all invoices as being “Due upon receipt.”

If you learn an organization is taking advantage of this phrasing to not pay within 7-10 business days, change their next invoice to be “Net 15” (due in 15 days). If they can’t pay on time, tell them to use a credit card.

15. Offer a small discount for pre-payment in full upfront.

I always ask for a portion of the fee upfront for every project, while offering a small discount for pre-payment in full upfront (in the 5% to 10% range). For projects I consider to be relatively small (e.g. <$5,000) I don’t offer a discount, but outright require full payment upfront.

Photo credit: http://www.flickr.com/photos/damianspain/9345483102/


  1. I am not a lawyer.

Are you making these backup power generator mistakes?

Personal lessons from managing a critical facility.

A very common problem for facilities with critical loads is that the power generator doesn’t start when it is needed. Fortunately[1] this can be remedied in the vast majority of cases.

When I say critical loads I am talking about computer data centers, hospitals, schools, stadiums, police stations, 911 centers, office buildings, or whatever you’ve deemed important enough to attach a backup power generator to.

The Situation

You, or your organization, has a critical load and has also gone to the trouble of spending the money on investing in a generator backup power source for it.

The Objective

This is simple enough: keep the power on.

The Problem

A local newspaper reported on a sewage spill in the county I live in:

About 20,000 gallons of sewage spilled from the California Men’s Colony prison at 4:10 p.m. Sunday when power was lost and an emergency generator did not start. The sewage flowed into Chorro Creek, which flows into Morro Bay.

The fault was apparently that the generator did not start after a utility power failure:

“The power failed and then our backup generator failed, so it was kind of like a double power failure,” said Mike Minty, chief engineer at the prison’s waste water treatment plant. “It’s all fixed now.”

If you operate a data center or critical facility that has a power generator, there are some very easy pro-active actions that can be taken to mitigate the most common problem I observe: the generator fails when the power goes out. For most, that’s not the hoped for outcome of the capital they’ve invested in making their facility more resilient to utility power outages.

While there’s always a possibility that shit this can happen even if various preventative actions are taken, the chances are far lower if a handful of items are paid attention to. I am not privy to the maintenance procedures at the California Men’s Colony waste water treatment plant, so I’m just using their outage as the thought provoker and not judging them.

The Cause

When a generator “simply does not start”, rarely is that the entire story. Rather than being the root cause of the outage, it’s the manifestation of the maintenance and monitoring practices.

In my experience it’s usually a symptom of a lack of a pro-active culture surrounding the backup power system. Sadly, some organizations that invest large sums of capital into their backup power systems (and, presumably, whatever the critical load is they are protecting), don’t factor in proper operational costs and fail to implement appropriate procedures to see to it that appropriate preventative work is performed. This diminishes the return on investment on the capital invested in the entire system.

The failures then flow through to two areas:

  1. Maintenance
  2. Monitoring

The usual failure scenarios are one or more of:

  1. Generator fails to start (common)
  2. Generator starts, but fails under load (common)
  3. Generator starts, but no power reaches the critical load (less common)

The end result is the same: the critical load loses power.

The Solution

In the case of a generator, here’s the practice I’ve learned to follow:

Weekly no-load automatic tests (usually this can be programmed into your automatic-transfer switch)

  • What this verifies:
    • basic generation functionality
    • control functionality from the ATS to the generator (a simple cabling problem between the ATS and genset, even if both are completely operational and test out fine, can ruin your entire day)
  • Labor involved should be to verify:
    • genset actually starts on its own (checklist item)
    • inspection of the gauges for anything unusual (temperature, voltage output, battery voltage, fuel levels, etc.)
    • physical inspection of generator, looking for unusual sounds or animals that have crawled inside of it (I’ve had cats inside..)
  • Costs:
    • Junior technician or facility maintenance person, approximately 15-30 minutes one day per week
  • Risks resulting from implementing this procedure:
    • Nil. Won’t have a real load on it. Nothing will be disconnected during the test.
    • A risk is that this procedure isn’t completed every week. I suggest requiring a small checklist report to be filed each week with a colleague or supervisor (and making sure they know to expect it so that if it doesn’t come they go in search of a reason why) to make sure something isn’t missed just because somebody “got busy”, was out sick, went on vacation, etc. To verify it was really done and not just filled out paperwork, listen for the generator tests (duh!) and have the run hour meter reading from the generator be one of the fields filled out (which should be going up every week).

Monthly (or Bi-weekly) Manually Triggered Actual Load Tests

  • Verifies:
    • Takes the place of the weekly no-load every fourth week
    • Mechanical functionality of the ATS
    • Electrical functionality of the ATS
    • Real functionality of the generator (many problems do not manifest themselves when the generator is running without a load or with only a very low load)
    • That the facility is not exceeding the capacity of the generator (doh!)
    • That there aren’t some weird charactistics of the load or the backup power system that are interacting in a way that will lead to power loss
  • Risks
    • If you do not have UPSes for computer systems and other pieces that can’t lose power for even a few seconds, which are in turn fed by the generator, plan accordingly how to do this type of test. For a data center with UPSes, a monitored test can be performed. The worst that occurs if there is a failure should be a very brief loss of air conditioning while you switch back to main power so you can isolate what went wrong. Computers should run from the UPS batteries briefly.

Yearly (or Quarterly) Dummy Load tests

  • What this verifies:
    • Often the generator will not be under 100% utilization, even during the monthly actual Load tests. Some generator problems will not manifest themselves except under heavy load.
  • How to do this:
    • Have a testing and maintenance contract with a company that specializes in this. They can also assist you with other matter maintenance activities. Look in the yellow pages or speak with other folks who have backup generators — ignoring the folks that say they don’t do anything special to make sure their generator works when they need it of course. 🙂

Things This Solution Should Catch

Some of the causes of the inability to start, that would have been picked up under the above system, that I’ve observed are:

  • Generator battery fails
    • Causes: Age, No installed smart charger, Cabling disconnect during maintenance or due to loose connector that is shaken off during generation operation
  • Basic care and feeding of the generator overlooked (it’s like a car: think oil, spark plugs, etc.)
  • Empty fuel tank
    • 🙂
  • Bad fuel
    • There are different types of diesel, depending on season and location
  • Animal trapped inside
    • Not good for you or the animal
  • Power cabling from the generator to the load broken or poorly connected
  • The power consumption of the load exceeds the capacity of the generator
  • The generator is flakey under load
    • This is why you must test the generator under load when it is not actually needed, both with the a dummy load and a real load (see dummy load testing above, for example)
  • Transfer switch control wiring to the generator fails
    • Loose connections, low quality cabling, too much water in conduits, construction smashes underground conduit (unknowingly even sometimes)
  • Programming modified on the auto-transfer switch
    • No longer activates generator properly
    • No longer cuts over to generator under conditions desired
    • Turned off. 🙂
    • May have been an accident or the little battery in the ATS running lower (should be checked quarter with a volt-meter and replaced at least every year)

It’s good to be aware of these so that the staff implementing the system can understand the specifics of the problems they’re looking for.  They do require a checklist system — something for a junior tech or maintenance person to perform/verify on a regular schedule. These items are easy and even “cheap” both in absolute and ROI terms.   I’m reminded of a couple quotes I recently wrote in my journal (credit to Robert Rosenthal for these two sayings):

  • “If the cheap solution fails, it may be the most expensive option of all.”
  • “No one ever went to the board of directors and said, ‘The project failed but I’m proud of the fact that we paid next to nothing to implement it.”

  1. or unfortunately, depending on how you look at it 

The least you need to know to experience the joy of better brewed coffee

I’m into good coffee. I’ve owned my own espresso makers and roasted my own coffee at home, and I rely on a French press for my daily consumption. 

Don’t let that fool you though: Most days I’m too lazy or too busy to wear my aficionado hat. That’s why I’m going tell you the least you need to know to experience the joy of better brewed coffee.

There are a million things aficionados will tell you that you “must” do to get a good cup of plain old brewed coffee. It’s unlikely you’ll follow much of that advice (unless you’re obsessed or just deeply interested and willing to dedicate the time and energy to it).

You wouldn’t mind a great cup of coffee (even just slightly better), but you don’t want to put time, energy, or money into it. I get it. Most days I don’t either.

That’s why I’m going to tell you the only thing you need to know to raise the bar a bit on your home (or office) brewed coffee with least amount of effort, distraction, and energy. It’s the pragmatic approach I actually use 99% of the time (despite my occasional deep dives into the dark arts of high-end coffee).

It’ll take one minute to read through, about one minute extra the next time you are at the grocery store, and another minute if you follow my number two suggestion (which can be ordered on-line), and nearly no consumption of your time and energy on an ongoing basis after that.


Here’s the least you can do to get the most improvement…

  1. Buy whole beans.
  2. Buy a bean grinder (<$50 – might I suggest the KRUPS Grinder 203-42 for ~$22 at Amazon.com).
  3. Store the beans sealed as tightly as possible (exposure to oxygen/air speeds up their deterioration).
  4. Consume the beans within 7 days.
  5. Buy the whole beans from a regional roaster (or even Starbucks).
  6. Don’t let the brewed coffee sit on the coffee warmer. (Consider a small french press if you don’t mind boiling your own water)

That’s it. Heck, do any one of these and things will get better (well, the grinder is a requirement if you get whole beans so I guess two). Do just a couple and, well, you can see how they build on each other.

 Bonus tips

  • If you use Half & Half, avoid the ultra-pasteurized variety (it has a more cooked flavor along with other off flavors added as preservatives)
  • Use the same amount of coffee grounds in your maker regardless of whether you’re making a full pot or not.
  • Experiment with different bean sources, types, and roasts to find roasters, origins, and roast levels that best match your flavor preferences. It doesn’t have to be $20/lbs coffee. I’ve found decent coffee at local super markets and chain superstores (but local roasters will have a wide variety of too and almost always fresher and, generally, higher quality).

Most importantly…

Don’t worry about what anyone else thinks — ignore any one’s advice (including mine) and simply enjoy your coffee no matter what. 🙂

Additional resources

If you are inclined to learn a bit more you might also enjoy these two resources:

How to Trigger New Business – When Starting Out or Already Established

Today we’re going to talk about a simple email that triggers referrals and inquiries from your existing professional and personal network. It is amazing both in its simplicity and effectiveness.

It’s a great way to get started out – and it can even be reused periodically to generate new referrals and inquiries. That’s how I still use it.

This technique has directly generated tens of thousands of dollars of freelancing income for me. Indirectly it’s likely accountable for a bit more, but I can’t determine that for certain.

I did not think to send out anything like this systematically until, embarrassingly, about three years ago. This was well after I’d started freelancing (and well after I’d made some other vague ad hoc attempts to email my network about my availability and services).

I call it the “launch” letter. It is strategically designed, both in form and wording, to facilitate referrals and inquiries both immediately and over time.

It can take the form of an email sent to those who already know, like, and trust you as well as a standard business letter sent to the same individuals and possibly a slightly larger portion of your network.

It can be used in three situations by both new and established freelancers alike:

  1. When you’re getting a new freelancing practice going
  2. After you’ve been freelancing for a while (when you realize you haven’t formally “launched” your business to your network)
  3. Every couple of years to “relaunch” (a way of updating your network on what you’re focusing on right now and reminding them about what you do, since they’ve probably forgotten, and to do so in a friendly way.)

I did not invent this idea. I first read about an approach taken by Thomas Myer in From Geek to Peak: Your First 365 Days as a Technical Consultant. I took the concept and tweaked it to my personality and practice, then ran with it.

Here’s how Thomas describes it:

The goal of the email is very simple: tell them about your “new news” and describe what you do in a very easy-to-understand way.

And the key to success:

The key to making this email succeed (90% of which will be received by the recipient and then filed away or trashed without comment) is to stay non-salesy in your approach and ultra-specific with the details.

Further (this is the real kicker):

These people are probably not going to hire you personally but each of these persons has connections to someone who might hire you …treat this email as though it might end up being forwarded to someone else, because it very well may be.

The nifty thing about this email is that it can be used to both launch as well as (periodically) relaunch your freelancing business …and it works even if you aren’t (yet) following up with your network / mailing list in any other way.

Now when I first set out freelancing I did sent out emails to various folks I already knew. Those emails, however, were vague and informal. I had not put the thought into figuring out how to relate to the recipient nor make the email “forward-friendly.”

When I discovered this more systematic approach, I ran with it on faith. The results, thankfully, were impressive. Now I aim to “relaunch” myself every 12 to 18 months.

So I’ll share with you that first “launch” email I sent out. This one, specifically, generated half a dozen inquiries and a referral of an IT manager at a large institution. Two inquiries became clients soon thereafter.

Date: Thu, 10 Mar 2011 14:11:28 -0800
Subject: Update on Josh’s consulting practice
From: Josh Richards jtr@Jxxx.com

Friends, Family, and Colleagues:

Well, it seems that 4+ years into my solo consulting practice, one thing remains the same… To quote Alan Weiss: “I’m constantly amazed at how stupid I was two weeks ago.”

Seriously. I was talking to an old friend recently. He had referred a prospective client to me and I was showing my gratitude. I expected a low-key discussion.

Instead, he “called me out” on a mistake I’d been making — as only a good friend or trusted partner can do.

Obviously, I had to pay attention.

It seems that, even though he refers folks my way periodically, he is not clear on what I do and who I’m working with these days. He hinted that he’d missed (and even avoided) referring potential business my way due to his uncertainty about my acceptance of it.

Doh! I’d screwed up and I really wanted to fix it. Immediately, but not just for him. So I slapped myself on the forehead (figuratively speaking) and got to work. Hence, among other things, this email.

I am embarrassed to say this, but there is a decent chance that you don’t know what I do, or at least not all that I do (even if you think you do, and even if you’ve referred someone to me, or I’ve helped you with a project). Yes, even if you are related to me (Hi mom!) or married to me (Hi honey!).

I apologize for this oversight. On that note, I would like to remedy the situation.

Q: What do you do?

A: […]

Q: What does that mean? What do you actually do?

A: […]

I’ve been fortunate to work with many of the region’s strongest, most successful, and highest growth organizations. I typically work with the CIO (sometimes CTO), the VP of IT, the IT director, the IT Manager, the CEO or President (sometimes the business owner). What I do is not (typically) industry specific and I’ve worked with clients in many different industries, ranging from solo entrepreneurs to Fortune 500 corporations.

If you know anyone like that in your personal network of friends and associates who needs help with their IT department or technology infrastructure could you make an introduction? I would appreciate any and all connections as I continue to grow my solo practice. In fact, to make it easy for you, feel free to forward or “cut-and-paste” this email to those individuals that come to mind. At a future date, if I come up in conversation, you can do the same or simply direct folks to my main web site at http://www.Jxxx.com.

Here is all of my contact information, so please update your address books:

(office)

Telephone: +1 805-xxx-xxx Fax: +1 805-xxx-xxxx

(email)

Primary: XXX@Jxxx.com Backup: XXX@gmail.com

(web)

Site: http://www.Jxxx.com Blog: http://www.Jxxx.com

Thanks again for all your encouragement and support over the years!

-jr

Something humorous happened the first time I sent the exact above email to my network: That IT manager that was referred to me, as a result of this same email, was referred by two separate individuals within minutes. That is, he received forwards from both of them. 🙂 He, at first, thought they’d ganged up on him, but they actually had no knowledge of each others’ actions. Yes, he became a client. 🙂

If you are just starting out as a freelancer, you can make the above email far simpler, basically following the same approach: A quick “Hello, I’ve been thinking about freelancing for a while now and feel I’m at a point in my life where I would like to start pursuing it on the side” and a list of skills or business problems saying something like “I’m available for the following, on a freelancing basis. If you run across someone who would benefit from my skills, please pass along my contact information (below) and/or this email. Thanks!”

I prefer email over letters, because they are easier for the recipient to forward as well find (using their email programs search feature) to refer back to. Letters work for folks you don’t know as well (you don’t want to spam folks with email).

If you’re just get started, do these four things over the coming week or so:

  1. Compose a launch or relaunch letter/email similar to this.
  2. Compile a list of 25-50 people that already know, like, and trust you.
  3. Send your launch or relaunch letter to your first 25 people, either by email or my mail (or both if you want to cover all your bases).
  4. Post your launch letter, or an abbreviated version of it, to your blog and social media accounts
  5. (bonus) Compile a list of another people and repeat until you’ve exhausted your personal and professional networks.

A few cash flow tips for IT consultants

When trying to improve your cash flow, it’s easy to focus on the things that are outside of your control when it comes to clients paying you. But what about those things that are under your control and in their current state are hurting your cash flow?

If you focus on all the things that are outside your control, well, you’ll quickly convince yourself it is a hopeless endeavor and overlook opportunities to improve things. That usually leaves good consultants accepting their weak cash flow positioning. (It’s also a terribly frustrating way to run a business and to live.)

That’s why we end up in cruddy positions time and time again, wishing it were true or possible to do something about our cash flow (or complaining to a friend over a beer the day before the mortgage is due).

Start with the things you do control

When trying to make improvements it can be helpful to return to the fundamentals to confirm that you are working from a solid foundation. (And before doing anything too drastic.)

Today I’m going to walk through a few of these “foundational” techniques for improving cash flow in a small IT consulting / freelancing / service business. These are some of the most basic elements that impact cash flow. And, thankfully, they are most definitely under our control.

You have more control than you probably think

I had no idea of this until I sat down and inventoried everything last week, but at last count I have made 31 specific adjustments in my consulting business over the last 5 years to optimize my cash flow. (Wow!) And I’m pretty certain I’m still overlooking a few…

These are techniques I use at various points within my business, mostly at various prospect and client touch points. Ranging from how I send my invoices, how I discuss fees, what my payment terms are, how I disclose my terms, how and when I do invoicing, how I handle late payments, the specific language I use, who I talk to about money, when I ask for it, how I position myself and my business, when I follow my own rules and when I decide to break them intentionally, when I charge on an hourly versus fixed fee basis, how I scope and frame the work I do for clients, what milestones payments are tied to, when I start work, how I help prospective clients self-select themselves to filter out the incompatible ones, etc.

Don’t worry, just improve

Even now it is a very imperfect process. After all, there are only so many things under your control as a consultant. And, in my case, sometimes I fail to follow my own advice or I screw up in some other way. 🙂

I’m still learning and experimenting, which is also why I’m still able to improve. This is my challenge to you as well. Learn and experiment. Take a few steps forward …and a step or two back. It is the only way to improve.

Your clients are not your adversaries

Your clients are not your adversaries. Just because they do not give you exactly what you think you want (or, worse, deserve), without you even having to do anything to make it happen, does not make them your adversary. Good consulting relationships are built on mutual win-win arrangements. One party does not have to lose for the other to win.

It is your responsibility to get what you need, while finding ways to make it happen within the confines of a genuine partnership. To do that you need a couple of things. First, to decide what you need. Second, often in parallel, to wrap your head around what is possible. Third, you need to do something about it.

In fact, it is your professional responsibility to establish a viable business so that you can serve your clients better. This does not mean giving away your life and your business, little by little, to those who want to abuse your relationship and goodwill.

Are there clients that don’t think win-win? Sure. And I’ll give you some options to address those eventually too (just before you get rid of them for good), but — as I said at the start — focusing on the exceptions and the things you can’t control isn’t going to get you anywhere you want to be. Those things are a distraction. They are just noise.

Alright, lecture over, let’s get down to this week’s techniques. 🙂

A solid foundation

At first I was a bit embarrassed to tell you about a few of these “foundational” techniques. That is because some of them seemed obvious. Nor are they clever or exciting. Yet that is precisely why they are overlooked or, worse, taken for granted.

I also realized, thinking back, that I’ve had to learn the subtle nuances of these seemingly obvious techniques on my own. Make sure you are doing the absolutely best you possibly can in these first three areas — because quite a bit of the other techniques build on these.

The professional invoicing technique

I look back now and can’t believe how I used to invoice my clients, when I first started out (this was years ago now). I had text files strewn around in client specific directories and post-it notes in client folders (if I was lucky). Once a month I would manually add the time up and try to get everything all formatted just right in a Microsoft Word file that I copied for each client invoice as a template. I manually modified it for each one! Oh, and I had to get the alignment just right for the addresses to line up neatly in those stupid envelope windows…

Thankfully, things are much better now. We have excellent off-the-shelf options available to us, that are very low cost and even free. And just about everybody will accept electronic invoices these days.

So this first technique should be pretty easy (minimal time investment) and low-cost to accomplish. That said, don’t mistake using some of the excellent off-the-shelf solutions, with using (configuring) them in the best possible way to head-off issues that your clients may use — intentionally or not, consciously or sub-consciously — to keep you from getting your cash when you want it and with the least hassle.

  1. Your invoices should be professional, clear, simple, accurate, and consistent in appearance and formatting. Easy enough, right?
  2. Yes, but the value is all in the details, which you control (and thus, if you’re anything like me, can still screw up from time to time)…
  3. Every invoice should have just enough information to know, at a glance, what they are for, when they are due, and who the buyer is.
  4. An invoice should only be for work and results previously agreed upon with the buyer (the person who directs you to get paid — the person who literally agreed to hire you for the work). I typically include a reference to the proposal date, proposal title, and buyer. If it was emergency work the approval is generally implicit, but I still document each line item.
  5. If billing by the hour, rather than on a fixed fee basis, there should be a reasonable explanation for all itemized hours / hour blocks so that a buyer (or his staff) taking a “trust, but verify” attitude can rapidly make a sanity check assessment to confirm that there’s justification for the hours backed by documentation.

You can manually format things in Word/OpenOffice or use some other homegrown solution, but I highly recommend against it. Instead, use something like FreshBooks, which will not only meet the aforementioned requirements, but also reduce your time investment (or, procrastination) and, critically, enable lots of the other techniques we’ll be getting into in the coming weeks.

The professional time tracking technique (if you bill by the hour for any of your work)

If you charge by the hour it is reasonable for the client to expect some explanation of your hours worked. This means not just having a line item that says “42.25 hours x $100 = $4,225” and expecting payment. (Don’t laugh, I’ve done this before.)

How does this mean you are more likely to get paid or that you’ll get paid faster? Think about it from the client’s perspective: they’ll feel confident you are being honest, that you embrace transparency in your billing practices, and they’ll be less likely to ask questions or, worse, dispute an invoice. It creates trust in the relationship and they’ll like you more.

Operating this way is the right thing to do, and it’ll help you get paid faster to boot, get it?

While you could come up with the explanation text for your hours afterward, I find it not only easier to remember and keep accurate but also more difficult to dispute if you do it as part of your work flow. It’s also more honest.

For example, when you sit down to do something or immediately after you finish up a period of work (but not necessarily your entire task or project):

4/12 – 12:50 – 1:50 Looked at server configuration; noted a few concerns, more later

4/12 – 4:30 – 5:30 Looked more deeply at the areas of concern I found earlier; adjusted NIC configuration

When you add up these (and, likely, several more) at the end of your billing period and send along your invoice, make sure to include each of these on your invoice too before totaling, so that the client can have confidence and be comforted that you didn’t just pull some numbers out of nowhere and see that you clearly have good and concise record keeping. The client will relax. e.g.

4/12 – 1hr Looked at server configuration; noted a few concerns, more later
1hr Looked more deeply at the areas of concern I found earlier; adjusted NIC configuration

When you are using something like FreshBooks this is even easier as it is designed around time tracking in this way and then automatically incorporates your comments into the invoice. That’s how I do it.

If a dispute does come up, rather than getting defensive or simply giving in even if you disagree, you’ll be able to calmly discuss the issue with the data in front of you. This is super powerful when you start to realize, later on, that most billing disputes aren’t really about the dollar amount, but covers for other problems that really need to get discussed and worked out. You can’t do that if you are mired in uncertainty with regards to what hours were for what.

The consistent and on-time invoicing technique

When I first started out, I had a love — and a hate — relationship with invoicing (which, at the time, was supposed to happen every 1st of the month). Sure, I wanted to get paid, but the whole process was tedious and boring. (It didn’t help that my first introduction to invoicing was manual which also made it a lot of work.) It should be no surprise that this all lead to one thing: procrastinating.

Some months I billed on the 1st …others on the 11th.

Later, when I streamlined the process and things got WAY easier, I still found myself sometimes procrastinating when invoice time came around. Eventually I discovered that the more consistent and on-time I was with invoicing, the more consistent and on-time my clients paid. This was both because I invoiced sooner (obviously), but — this is my hypothesis — also because clients took me more seriously. I was viewed as having “my act together” and it showed.

Wow, did I have everybody fooled or what?

What I understand to be going on is that people respect — and are more likely to pay — those who they work with that have “their act together”. It also seems to reduce billing disputes, incidentally, and I’m fairly certain that it is easier psychological to cut a check for work that has happened recently (days or weeks) rather than 60 or more days ago when it no longer seems as important, a million other priorities have come up since then, and the consultant is probably even a distant memory (at least until the next time your services are needed).

Here are a few ways to make it easier to do invoices on-time and consistently every single time:

  • Use tools such as FreshBooks to track your time (if applicable) and to generate professional invoices. This makes the process simpler, automates certain aspects of it, and cuts the time commitment per invoice down to <1 minute each. Another free option is Wave, which I use for keeping the books in my businesses, and also does invoicing and payment acceptance. (I’ve only personally used it for keeping my books as I haven’t had the time/motivation to attempt to fully replace my completely working and well understood FreshBooks invoicing and time tracking set-up).
  • Choose a consistent (specific) day in your calendar (an appointment with yourself) during each billing period when you will do invoices
  • Do less work that requires time tracking. This simplifies your invoicing, but you obviously need to have some other things in order first before you get rid of hourly fees entirely.
  • Invoice more often (e.g. every 14 days rather than every 30 days) so that you have less to review and to do at once, and client concerns are caught sooner (and before balances are bigger). Plus the excitement of getting paid sooner and more often adds a little extra motivation to the process.
  • Get some (or all) of your money upfront. There is nothing like invoicing for the initial payment required, for an already agreed upon project, and knowing you’ll have payment in your business checking account before even doing any work!
  • If you bill the same amount each month to a particular client, such as under a retainer or for any sort of regular services, utilize recurring invoicing functionality in your chosen billing solution (FreshBooks has this, for example). Once you trust the system enough you can have it auto-send these invoices after generating them, but you may start out just having it auto-generate them and requiring a single-click from you to approve and send.

Those are three of the most essential foundational approaches to improving your cash flow. Remember, these are supposed to be the more obvious ones. A lot of the pieces under our control, even the most advanced ones, require these foundational pieces to be in place and operating smoothly. Don’t overlook the cash hidden inside the above areas. I’ll share some more techniques next week.

Cheers,
-jr

P.S. If you got value out of the above, I’d love for you to share it with your network and encourage them, if they want more like it, to join the e-mail list. Each week, for the next couple of weeks, I’ll be sharing more content like the above so it’s a great time for someone to join us.

P.P.S. As always, I’m here if you have any thoughts on today’s email, or even just a “this rocks” or “this really stinks” response. I’m not picky.

Employee-like cash flow for freelancers

Why do freelancers have cash flow concerns that employees do not?

It’s superficial and shortsighted to say it’s because employees get a paycheck every other week. Employees simply work for corporations, which are certainly not immune to cash flow problems. Things happen — missed payroll, delaying reimbursements, and layoffs — just to name a few that impact employee wallets / purses directly.

Even so, businesses with large quantities of employees do tend to be better at insulating their employees from cash flow problems in the business than freelancers are about insulating themselves from cash flow issues in their practices. Organizations of any substantial size are able to “roll with the punches” a bit more.

Why?

It seems big business has an advantage, but it’s only because they’ve engineered things that way. Alas, they do not have magical cash flow sources that I can reveal to you. What they do have is something close though: high-impact, proven strategies for improving the cash flow in any business situation.

Specifically, for increasing the likelihood that, at any given point in time, they’ll be able to cover the bills, pay employees, and keep in progress projects moving forward.

What a typical corporation has is options and flexibility. Even solo/small technical service businesses can have these things, but it has to be engineered just like it does for the big companies.

Let’s break down what a typical corporation has in its “cash flow toolbox.” Then let’s figure out exactly how we can replicate these in our own situation. Even a solo IT consultant can learn from this. I know because I am one and I have.

How cash flow is engineered in a typical corporation

Much of the flexibility in a bigger business comes from things that any organization of any reasonable size is expected to have. As smaller businesses — especially in my experience with solo IT freelancers, consultants, and service businesses — we often don’t think about these things. Or, more accurately, we don’t know how to make them happen. After all, we don’t have a professional and experienced Chief Financial Officer (CFO) who is dedicated to living and breathing cash flow and balance sheet data. At least I’ve never considered myself one …and I am the de facto CFO for my own business.

Some of the cash flow “levers” in a typical corporation

Here are some engineered cash flow levers available to a typical corporation. We need to identify them so that we can figure out equivalents for our own business activities.

It’s not necessary, by any means, that we have equivalents in our own business for every single one of these levers. It’s only necessary that we have some, and possibly add to them over time as our own business activities mature and our risks and needs change.

  • Customer/client diversity (e.g. individual customer/client, different regions, etc.)
  • Product/service diversity (e.g. multiple offerings appealing to different customers under different conditions)
  • Capacity to borrow funds (e.g. lines of credit, bank loans, payable notes sold to investors)
  • Capacity to raise money (e.g. equity sold to investors)
  • Tangible assets to move around and/or sell (e.g. cash, physical assets, real estate, subsidiaries, etc.)
  • Intangible assets to sell or license out (such as trademarks/patents, intellectual property, distribution rights, etc.)
  • Dedicated as well as excess capacity – brains, energy, labor, manufacturing, or distribution capacity (e.g. dedicated management and staff with ideas, energy, and time to focus and tackle problems and opportunities as they come up)
  • Planning and forecasting — tools, people, data to do it
  • Budgeting — tools, people, and data to do it
  • Ability to defer expenditures (e.g. maintenance, new capital expenditures, freezing of new hiring, delaying planned and in-progress  projects, etc.)
  • Ability to delay payment — to vendors, contractors (!), and government
  • Boosting marketing investments — in areas proven to have the highest (or the shortest, depending on which is more important) return on investment (while reducing investments in lower ROI, albeit still profitable, areas)
  • Boosting sales efforts — just like marketing, focusing resources on areas proven to have the highest (or the shortest, depending on which is more important) return on investment (while reducing investments in lower, albeit still profitable, ROI areas)
  • Creating limited time price incentives (e.g. for customers to buy now, for customers who pay earlier than typical, or for customers who buy in larger quantities than they normally would)
  • Requiring payment before shipping product
  • Requiring a set-up fee before delivering a new service
  • A willingness to make investments for the long-term

These are just a few of the biggies. 

Engineering your own freelancing business for maximum cash flow flexibility

What lessons can be learned from what a typical large corporation does that can then be translated into things in your own consulting practice? Quite a few it turns out!

Here are some ideas:

  • Diversify your client base
    • In quantity (e.g. if you have two clients, get three)
    • By industry (e.g. if all of your clients are in one industry, get one from another industry)
    • In revenue percentage (e.g. if one client accounts for >50% of your annual income, get another one)
    • By region (you get the picture)
    • By size (e.g. small business, large business)
    • By type (e.g. for-profit, non-profit, government)
  • Diversify your engagements 
    • Lots of project work? Balance these out with more retainers.
    • Lots of retainers? Balance these out with some project work.
    • Lots of new clients? Increase the repeat business you get from past/existing clients.
    • Few new clients? Improve how you generate leads for new potential clients.
  • When cash flow is good (or, at the very least, you have some cash in the bank), establish a credit line associated with your business that you can draw upon when needed
  • Use your good personal credit history to establish one or two business only credit cards
    • Use these to pay bills/overhead and pay them back promptly, building up your credit profile for increased access to credit in the future
  • Look at your expenses/overhead
    • Trim unnecessary subscriptions (including for software/services) expenses, even if you think you may want them later (you can always resubscribe later on if you don’t find alternatives in the mean time)
    • Give some thought during the good times to what expenses are most discretionary in case adjustments need to be made quickly
  • Invoice your clients sooner and more often — don’t wait until the first. Switch to billing every other week or even every week. Bill immediately upon project completion as well.
  • Require a portion of project fees be paid up front
    • 50% of the estimated total fee, if hourly
    • 50% of the total fee, if using fixed or value-based fees
  • Offer a 10% discount for full payment, upfront, of the total fee
  • Package up your services, expertise, or access to you in new ways then encourage clients to buy them by making it worth their while (e.g. buying hours in bulk, buying special access to you via email or phone, etc.)
  • Defer investments not related to creating new revenue within <x> days
    • Where <x> is a criteria you set depending on how much of a crunch you are in
  • No matter what, keep investing in your main client acquisition approach or you will put yourself in an even worse cash flow situation (e.g. in my practice I have one monthly activity that entails investing in a monthly mailing of a specific type to my house mailing list every single month; at most I skip one or two months per year)
  • Re-focus resources constantly
    • Limit cash/credit use to investments in direct revenue generating activities, less on overhead and unnecessary things
    • Defer planned projects that aren’t in the top 1/2/3 (or whatever) in terms of near-term cash flow generators
  • Look for low-risk, low-investment, high-potential opportunities to boost revenue – e.g. smart marketing arrangements such as joint ventures with complimentary businesses to do an endorsement to their own customer/client bases of your services with a special offer
  • Manage your working capital / keep some cash in the bank

That’s just a start to get your brain used to the idea of thinking this way. Go back and look at the corporate list and brainstorm ways to adapt versions of the corporate approaches to your solo practice.

Let me know what you are doing to increase your cash flow, whether it’s on the above idea list or not.

Regards,
-jr

To gain respect, IT departments must mature

Many IT departments are fond of proclaiming a lack of resources. This has only been heightened, in the last couple of years, by economic turmoil. I’ve also observed that we are quite ignorant of our role in creating this situation.

I’m referring to our need to better justify our investments, to discuss benefits more eloquently (while being more in tune with our audience), to hold ourselves more accountable, and to seek out better ways to connect the output of our activities to the engine that drives our organizations.

With this mind, here are some things we might all consider doing more of this year…

  1. Digging deeper when attempting to justify new investments: In any business, there are always ways to bring the impact of an initiative closer to the real motivators for investment. What may seem immediately obvious to you may not be to a non-technical (or even technical) executive, especially one with many other folks asking for resources at the same time. It’s also helpful to remind yourself that even good ideas don’t get funded for all the right reasons. Successful businesses don’t invest in all their good ideas, but seek to invest in as many of their best ideas as possible. Constraints of manpower, focus, and capital are a legitimate fact of life. Furthermore, we don’t have the gift of omnipresence and we can only use hindsight after the fact!
  2.  Having a greater openness about our failures and limitations: There will always be investments that fail to achieve their aims. These should not be hidden away, but instead used to foster learning and build trust. Similarly, there will always be investments where success will seem hard to judge. With a frank set of business objectives at the start of a project (based upon desirable outcomes and not tasks) there will be fewer disappointments, more flexibility, and greater trust. This will increase support for future initiatives and the business will be more likely to achieve its aims.
  3. Raising our standards, particularly in the area of firefighting: Some IT groups seem to wear their expert (and superb) reaction abilities as a badge of honor. That’s okay, as long as it’s used to provide an excellent response in the case of an unexpected event. Emergencies are no longer unexpected if they have become the norm. Elevate your standards by making firefighting the exception rather than the rule (while still retaining your ability to respond rapidly and effectively in an emergency). Seek out patterns in recurring fires. Treat the symptom quickly and then move on to solving the underlying cause. Better yet, ignore the symptom and knock out a solution once and for all. Fires are either the result of unexpected events, or they are the result of setting your standards too low. You choose which you prefer.
  4. Making better use of the resources we’ve already got so we’ll be able to get more: Limited resources are a factor for everyone. It’s what you do with what you’ve got that ultimately decides whether you’ll get more. Complaining is unlikely to move you forward. You may not love the results that you get from your very limited resources, but if you can’t demonstrate that you used those resources wisely, how can you expect others to trust you to efficiently and effectively use even greater resources?
  5. Putting business objectives first: IT isn’t about technology, it’s about business. Ironically, this means that IT departments who get the most capital for investment in new toys, tools, training, and technical staff are those who pay more attention to the business aspects of their activities rather than the technology aspects. Prudent technology investments are not more “correct” because they’re more technically elegant. It is of greater importance that they produce results that are beneficial to the business.
  6. Seeking success not perfection: Like so much in business, and in life, the name of the game is success not perfection. Don’t make the mistake of seeking perfection over getting results. Technical people are often poor at hitting narrow deadlines by triaging features and requirements, and by applying the “80/20” principle. It is important to recognize when positive results have been achieved, even if the path there was not paved with perfect steps 🙂
  7. Seeking out, and pushing for, investments that generate money over those that only save it: While saving money is a worthwhile goal, the only reason there is any money (revenue) to attempt to save (by lowering costs) is because sales were generated in the first place. Creating new opportunities for increased sales – to both new and existing clients/customers – is not just the job of the sales and marketing groups. IT is involved in many different aspects of operations, both internal and external, direct and indirect. Stay alert to opportunities that boost the bottom line not only through savings, but also through growth.
  8. Outsourcing important, but non-strategic and non-differentiating, IT functions while finding new ways to add value by innovating and being strategic: Outsourcing is not an all or nothing strategy. The IT folks that fear for their jobs when the topic of outsourcing comes up, force me to wonder whether their problem is just low self-esteem or if they are, in fact, adding less value to the business than they should be. Despite the harshness of this statement, in many cases, the problem is the former more so than the latter. Even when it is the latter, it is often correctable with a shift in perspective.

It is already commonplace to outsource activities such as telecommunications services (dial tone and Internet) and software development (e.g. off-the-shelf software). An increasing number of IT departments should consider outsourcing their entire in-house phone solution (no more PBX), their off-site storage, and the deployment, upkeep, and troubleshooting of their corporate network and employees’ personal computers. The freed up time and energy (and money!) should be shifted towards strategic activities (such as seeking out more things to outsource for greater efficiency and, in particular, the seeking out of investments that contribute to business growth).

If you’re concerned about outsourcing replacing your position, shift your efforts to increasing your value to the business (instead of fighting against smart outsourcing initiatives). As a side note, I believe that one is better off cannibalizing his or her own position – if it is probable or inevitable – rather than waiting for someone else to force the change upon him/her. With this perspective, everyone in IT has an opportunity to become a trusted advisor to the business. The alternative is to be viewed as defensive, as out of touch with the business, and as having an agenda. That’s not a position you want to be in if you want your advice to be taken seriously.

Consulting versus Contracting: A Costly (Lack Of) Distinction

So what!? What’s the difference?

There are many folks who call themselves consultants. There are also many who call themselves contractors. Humorously — and I only know this because I fell into the same trap — there are many folks who call themselves one when they are really the other. Clients, especially those who aren’t used to working with consultants, often aren’t really thinking about the labels either. Legally, at least in the United States, you’re generally paid the same way (1099). But the two roles — namely the value delivered and the expectations — are very different from each other.

Not being completely clear about which role you are operating in — and thus what the expectations are — is costly, for both you and the client. Costly in terms of money, frustration, and mismatched expectations.

Alan Weiss has a wonderful post on the subject and even mentions “IT consultants” specifically:

If you call yourself a “consultant” but are usually hired merely to complete a task for the client, you are not a consultant, you are a subcontractor or part-time employee. This is especially prevalent among “IT consultants.” If you are paid to write code or program some sequence simply because the client has no one around who can do it—and a thousand people like you can do it equally well and exactly the same way—you’re not a consultant. (And you’re subject to enormous price pressures, because you’re a commodity.)

Sometimes, in your IT business, you may switch back and forth — depending on the client and the project. Let me explain what I mean so that you can avoid this costly and frustrating mistake.

On Consulting

I like to think of consulting like this: you (pretend you are the client) call up a trusted friend or respected colleague. You ask them to join you the next day at your place of business. You share with them some of the current goals, concerns, troubles, and hopes. You ask them to take a look around, to observe, and to ponder what you’ve shared and what they see. You encourage them to not hold anything back. You tell them that you know things are so-so in some areas, quite weak in others, and perhaps excellent in still others.

Unfortunately, it can be tough to sort everything out amidst day to day pressures and priorities. You also know you cannot see nor become an expert in everything. You ask your friend to stick around a bit, that you’ll compensate him for his assistance, and that you’d appreciate his perspective, expertise, and unique background applied to your business. You may also suggest, because of his background or a particularly nagging problem you are having (or both), that he take a close look at one area or situation in particular.

The consultant is your trusted advisor, perhaps one among several that you have. He or she helps you unlock — or at least get a bit closer to — the best version of your organization — and yourself.

On Contracting

Contracting is different. It is more akin to asking a friend, associate, or friendly looking stranger to “pitch in” because you are short of hands — temporarily because of peak demand, a special project, or because of an intermittent shortage of staff.

The line may seem a little blurry if your new contractor is also something of an expert in the work you’ll be having him do, but he is still primarily there to DO rather than help you figure out what to do.

Some consultants, perhaps most, can and do help with implementation, however the advice they provide is central to the relationship and engagement. In theory someone else could be substituted in to DO (implement) what they help you architect around your business objectives, but as a matter of convenience, flexibility, or risk reduction you prefer they DO the implementation as well — or at least remain involved in it alongside you and/or your staff.

It is for this reason that the most value is delivered when consulting, whether or not the consultant is involved in the implementation. On the other hand, sometimes all you need is some help with implementation, and hence a contractor, even one that is a specialist in the area you’ll be using them, is what you should be looking for.

The Value Difference

With consulting, the value is in your brain: insights, observations, ideas, and suggestions drawn from your unique background, experiences, skill set, and area(s) of expertise. You are not a commodity. Typically, focused on the right business problems, consulting is extremely valuable to the client who needs guidance such as help making a decision, fixing a serious business problem, or figuring out how to go after an attractive business opportunity. Generally, you are working with management.

With contracting, the value is in the labor: having an extra set of hands around to complete a pre-defined task. Your expertise may be involved, but only so far as is needed to implement a task that is already well defined. You aren’t involved in helping the client come to a decision as to which path to task (such as choosing among this project or several others). Any assistance in decision making you provide is ancillary. Generally, you are working for management.

Both roles are important. Both have quite different value propositions. Both are delivered differently. Both are priced differently. Both are different businesses, with different competitive concerns, marketing, sales, and proposal processes.

Some examples of differences:

  • Consultants can, generally speaking, charge more per hour of labor input into a particular project (whether or not they charge literally by the hour is irrelevant). This isn’t to say that consultants “work less” — it’s just that much of their work was done long before the client came into the picture: they are charged with applying their unique background of experiences and skills and perspectives to a the client’s situation. Contractors are literally paid for their efforts (inputs). Consultants are paid for their thoughts and guidance and, optionally, their assistance with implementation. It is a subtle difference, but a critical one.
  • Consultants are more likely to structure their proposals differently and charge differently for different types and phases of the project. For example, a common situation would be a hybrid project: Phase 1 being analysis and advisory work, Phase 2 being design and project management, and Phase 3 being implementation. The consultant would definitely do Phase 1, while they would optionally do Phase 2 and Phase 3 which are closer to traditional implementation (contractor) roles. Phase 2 is something of a hybrid: while, in theory, any project manager (internal staff or contracted) could be put into place to implement the project as designed, there is still added valued from having the consultant play this role (assuming they are also good at being in this role). Phase 3 could be internal staff, contracted labor, or some combination. With the analysis and advisory work done and a firm design and project management handled, the actual implementation can relatively easily be done by just about anyone skilled and motivated enough. The task is to — essentially — follow orders. Important, but more of a commodity than the other roles. If the consultant is to fill all of these roles, they should consider what they charge for for Phase I to have little relation to what they charge for Phase 3. One thing that must be taken into account: The value declines and commodity-like nature of the work accelerates between Phase 1 and Phase 3. If you are a so-called contractor, yet find yourself doing lots of Phase 1 and 2 work, perhaps you should re-think your positioning, proposal structure, and fees — after all, you are doing the work of a consultant withing charging for it (Gary Klaben, head of Protinus, would probably call this “shadow work”, which comes up a lot in his industry of financial advisors). On the other hand, if you find yourself mostly doing implementation work and mostly whatever you’re told by your client, than you are a contractor with a very different value proposition than a consultant: you are face a very different competitive situation as a result.
  • Any given consultant may be more of an expert in one particular area than another. The best consultants (and business leaders) realize, however, that all organizations with a mission are complex living organisms. There are goals, rules, and guidelines to keep everyone organized, but there are also humans involved, human nature to integrate, and creativity and innovation to apply constructively. Even seemingly unrelated things have an impact in other areas. A consultant, regardless of his area of focus, takes an interest in understanding the client business as a whole. While 80% of his efforts may be targeted in a specific area, having a holistic perspective of the client’s business will help him help the client in the best way possible within that 80%. Even a contractor will benefit from doing this, but a consultant benefits the most.

It’s important you know which role you are in. It’s probably important you know which one you prefer.

Questions to Ask Yourself

  • Are you a primarily a consultant or a contractor?
  • Which does your client want?
  • Are the answers different depending on the client and project?
  • Do you prefer one role over the other?
  • Are you doing “shadow work” and not getting compensated for it?

The Time Management Matrix That Changed My Life

One of the biggest shifts in my productivity was finding a way to sort out what is important, not merely what is urgent. The funny thing is that once I started to get a handle on identifying the important items, I was able to spend more time on being pro-active, preventative projects, and the like (and not feel guilty about it either). This created a feedback loop which further reduces the urgent items that come up on any given day. I can’t completely eliminate urgent items, but I can do a far better job at reducing how often they occur in my work and life.

So how do you do this?  And what exactly do I mean by Important versus Urgent?

You start by putting your tasks into four quadrants:

  1. Important & Urgent (emergencies, pressing problems, deadline-driven projects, scheduled activities)
  2. Important & Not Urgent (preparation, planning, clarifying goals and priorities, true relaxation/recreation)
  3. Urgent & Not Important (interruptions including many types of calls & emails, things that easily distract and fool us into being busy but don’t get us closer to our priorities)
  4. Not Urgent & Not Important (trivia, time wasters, escape activities, junk mail)

I find that most individuals, including highly dedicated professionals, spend a considerable amount of time in #1 and #3. Folks that really fool around spend a considerable portion of their time in #4.

The goal, presuming you want to productively work towards your priorities and shift as much of your work away from fire-fighting as possible (and towards value creation), is to spend as much time as possible in #2. Ideally, any other activities that don’t justify being in #2 should at least fall into #1 (both of these quadrants represent important work).

Here are some images (including a nifty mind map) to visualize this:

Click on the below image to download the mind map image (pay particular attention to the comment bubbles in yellow and connecting them):

And here is a PDF to a blank matrix to help you brainstorm this for yourself:

Covey 7 Habits Time Quadrants

These concepts and framework is all drawn from Steven Covey’s two books:

If you found this post interesting, in addition to checking out both of these books, you may also find Randy Pausch’s Time Management presentation insightful:

[first 7:30 minutes or so of video are folks introducing him if you feel like skipping over those]

So what do you think: Are these concepts something you can utilize in your work and life?

How to Find, Reconnect With, and Revive Your Professional Network


In early 2007, several months after moving on from my last venture, I found myself sitting on my butt a lot doing — well — not much of anything (I did get a lot of reading in).

I wasn’t getting out all that much to interact with other people and wanted to re-connect with folks. I did not have any system for tracking my various contacts. I had no centralized address book. And what information I did have seemed to be incomplete and usually out of date.

Which was a serious problem since I was supposed to be freelancing and consulting while I decided what was next. And that required doing some hustling to get gigs, which was best started within my existing professional and personal networks.

At some point, I stumbled across LinkedIn.com, which is a well established online networking community for professionals. It is NOT the place where you go to find out whether your drunken college buddies are, well, still drinking.

It turns out that LinkedIn.com is a wonderful automatically updated “rolodex” of sorts. I found it useful to remind me about people I knew (some well, many casually or very loosely), but had fallen out of contact with due to changes in jobs, organizations, projects, and engagements …as well as changed email accounts, phone numbers, and addresses.

Now, the interesting thing about this, is that based upon a couple of studies and references I’ve read, the average person “knows” about 250 people or so. That may sound like a lot to you (or not). Most people can come up with at least half of those people within 30 minutes or so if compelled to do so. The balance will pop into their mind over the next couple of days, if they keep thinking about it every so often as well as through reminders from reviewing the initial list of ~100 people they came up with (remembering one person often reminds you of another).

This is good news for those who are bad about cultivating their professional networks because, chances are, you know more people than you think already! You don’t have to use LinkedIn.com to do it, but I found it VERY helpful for me. I don’t really use its other features (I just have the free account).

By using LinkedIn.com to track down old colleagues, employees, employers, friends, and even relatives(in their day jobs) you’ll be putting in place a good foundation to stay connected with these folks no matter where they — and you — end up going in the future.

Sending a connection request on LinkedIn.com to someone you know also provides a convenient excuse to touch base with them. I do have one important suggestion though (which I’m embarrassed to admit that I didn’t realize myself until sending out 150+ connection requests): change the default connection message text. You’ll have far more luck getting people to acknowledge your connection and it’s far more polite and friendly (bring some humanity to the process — heh social media!). The default message text I’m talking about (and suggesting you customize) is the dreaded:

I’d like to add you to my professional network on LinkedIn.

Once you start using LinkedIn.com it also becomes helpful in two other really cool ways:

  1. Checking out a bit of the professional background for someone you just met …or are about to meet (or talk to on the phone). Think a prospective client, referral source, or simply a friendly face.
  2. Re-enforcing a contact you just made off-line (or even on-line) by offering to connect with them on LinkedIn.com (and sending them a connection request as part of your follow-up with them to re-enforce it). This will help both parties remember some of the professional details of the other person and increase the likelihood of actually staying in touch.

Good luck!

Have you found it helpful to re-connect with your professional network more centrally and formally? Have you discovered a useful technique, approach, strategy, or tool that others should know about? How did you find this post helpful in showing you some new ways to re-connect and cultivate your professional network? Share your thoughts by posting a comment attached to this post.


Originally published on December 7, 2010, with minor revisions.