I got an email recently asking for some advice. The question is one that I think all of us face from time to time, especially with a new business or during lean times, so I thought it would be a good idea to share the question and my response with you. Details have been changed for privacy reasons, but the problem is universal.
I am feeling so discouraged right now. I spent a lot of time over the past month trying to sign a new client. There was a proposal followed by questions, meetings, emails, conference calls and more questions. Just when I thought I had the job, I found out it went to someone else.
I was counting on this work and really put everything I had into it. I really need the money I would have made. What do I do now? I don’t have any other prospects. I feel frustrated and sad and I just want to quit.
Wow. Been there, done that. We have all had times when things didn’t go our way. Sometimes big things, like this. Rejection at any time can feel like you were punched in the stomach, and it is especially hard to take when you really need the work (and the money–mostly the money!).
Back in the early days of my business I encountered a situation very much like this. I had what seemed like a sure thing. I interviewed with the client and they liked what I proposed. I went back and met with others at the company and everyone was enthusiastic. We were discussing terms and a timeline. Then, nothing. I called a few times and finally got in touch with my contact who told me that they had hired someone else. I was devastated. Not only did I think I had the contract, business was slow right then and I really needed it.
What got me through was the promise of another opportunity. Even though I was sure the first contract was going to happen (and it would have kept me quite busy) I had other possibilities in the works. Sure enough, one of them came through within the next week, with others falling in line after that.
The lesson I learned from this was to always have more than one client in the pipeline. It can be tempting to stop marketing once you think you have enough work lined up to keep you busy for a while. But some of those clients may not come through and, even if they do, the work will run out sometime. Always have more waiting in the pipeline.
That is good advice for the future, but what about now? Let’s figure out how to take care of your immediate problem then plan for the future.
The immediate problem may be that without this client you won’t have the money to pay your bills. If that is the case, you need to deal with that NOW. Find a way to earn money. You might:
- Call past clients and see if they could use your help now.
- Put together a package of products and/or services and offer it at a special price.
- Sell your stuff on eBay or CraigsList. Or hold a garage sale.
- Offer your services through CraigsList, WarriorForum or other places where you can advertise inexpensively.
- Contact colleagues to ask if you can support them by assisting on their projects.
- Get a part-time job.
You can not effectively focus on your business if you are worried about the electricity being shut off, so do what you have to do to earn the money you need to live.
The other side of the current situation is your emotional state. You feel depressed and scared and unsure of yourself—not the strongest position to be in when you want to attract business. People do not respond positively to desperation, so do not talk about how much you need to earn money or that you don’t know what you are going to do if someone doesn’t hire you. You have just found yourself with an unexpected opening in your schedule and you are looking to fill it.
Give yourself a pep talk, put a smile on your face and get out there and look for clients. Keep smiling and you will start to believe you are happy and confident. Believe you are happy and confident and you will be.
The stuff in the previous section is the short-term strategy. The mid- to long-term strategy is not to find yourself in this situation again. Here is what you need to do so that you never find yourself at the mercy of a single client again.
Don’t put all of your eggs in one basket. Do not rely on one client to provide a large percentage of your income (What happens if you lose that client?) and do not focus on getting one client at a time. Always have many possibilities in the works. What is the worst that can happen if you are juggling several proposals and possible clients? The worst might be that you get offered more work than you can handle. At that point you can turn some of it down, hire people to help you serve your clients, or outsource some of your work. You already know the worst that can happen when you are working only one possible client.
Keep marketing even when you have plenty of business. There is always some amount of churn in any business. Clients come and go, circumstances change and your income can be affected. Make sure that when one part of your income disappears there is another opportunity waiting to take its place.
Diversify your income sources. That means not only that you should not depend on just one client to provide a large share of your income, you should look for sources of income that are not directly related to your primary business. For example, if most of your customers are in one industry actively seek customers from other sectors.
Create a base income that comes in whether you are working or not. Passive income. You want to know that you will have $300 or $700 or $1500 coming in every week no matter what. There are lots of ways to do that, more than I can address here. The short answer is to create some kind of intellectual property: write a book, create a training program, set up a website and run advertising, whatever. Start creating sources of passive income that will be there for you.
If business is slow, you need to take action right now to turn things around. Even if things are going well, you should be taking steps to keep them going well.