Thursday, March 29, 2012

Get It In Writing

I admit it: I'm a process kind of guy. Recognizing that memories are imperfect and that details can easily become lost, I like to write down important information so everyone involved in some activity knows what’s happening and agrees to the plan. For this reason, I write down the particulars of significant agreements I make with clients and colleagues to avoid confusion, mistakes, and hard feelings. In this post I’ll describe some of those agreements. You can download templates for the various sorts of simple agreement documents I’ve created from the supplemental materials page associated with this blog.

If you’re a consultant or trainer with your own agreement templates, I’d be delighted to add them to the download list to provide readers with some additional examples. Please send me an email if you have something you’d like to share.

Speaking Agreement

I’ve spent much of the last fifteen years traveling to corporations and government agencies around the world to deliver training courses. I always use a simple speaking agreement for these events. This agreement contains information such as:
  • The particulars of the event (topic, location, maximum number of attendees, dates and times, and contact person).
  • My requirements for the facility, such as a projector for my laptop, flipcharts and markers, microphone, and instructions for setting up the room.
  • Information about the student handouts and textbooks we will use in the course.
  • Financial details, including my money-back guarantee.
  • Contingencies for unexpected occurrences that could disrupt the planned event, including cancellation and rescheduling fees.
This information all fits on one page, and it works just fine for most engagements. However, some of my clients have a legal department that wants to get in on the action. They create a vastly longer and more complex contract that we have to negotiate. It took a full month to work through issues on the last such client agreement I had to deal with. I like my simple template much better.

This agreement has worked well for me for years, and I never undertake an engagement without one. I won’t make travel arrangements or order books or other materials until I’ve received a signed speaking agreement back from the client, because otherwise I’m not confident that they’ve fully committed to the event and the date. I’ve had several prospective clients who never returned the agreement for an event they requested or who held off until the last minute, hoping to avoid paying a cancellation fee if they didn’t sign until just before the event. I don’t appreciate such gamesmanship.

I have a consultant friend who loathes paperwork. He never uses a written agreement with his clients if he can get away without one. Luckily, he hasn’t encountered any problems with this approach—yet. But I’ve had some experiences for which having a written agreement was quite valuable; other consultants have shared similar stories with me. Once I traveled to the New Jersey countryside to teach a three-day class at a large company. The next morning I went to the building where the class was to be held. No one was there to meet me. I finally was able to reach my contact person on the phone. She thought the class was going to begin the next day and run for three days. Ah, this explained why the receptionist didn’t know what I was talking about.

I pulled out the speaking agreement. Sure enough, I was there on the correct date. By not reading the agreement carefully, my contact had miscommunicated to all the students in the class. We now had only two days to cover everything we were originally going to cover in three. If I had shown up a day late for a class I was supposed to teach, I’m sure there would have been financial consequences, not to mention the inconvenience to all of the students. In this case, we were able to work it out, but it was a mistake that didn’t have to happen.

Consulting Agreements

I use two different templates for consulting (as opposed to training) engagements, one for work performed at the client site and the other for work I do at home. I call this second sort of activity off-site consulting; others might call it virtual consulting. You can find the templates I use for both situations at the page of supplemental materials for this blog. Note that in the on-site consulting agreement and in my speaking agreement, I quote a single price that includes all of my travel and lodging expenses, books, student handouts, and anything else I will be paying for. This way I don't need to mess around with submitting receipts for individual expenses to the client and maybe having them quibble with what I spent on airfare, a hotel, or meals. This policy has simplified my life a bit.

The supplemental page contains an alternative consulting agreement template (#2), which was contributed by a colleague. This one is a little more formal and richer in legal details than mine, which might be a good idea. If you need to create such templates for your own consulting business, I suggest you study these and any other examples you can locate from experienced colleagues, then pull together the best ideas from all of them to suit your situation.

When I have an established long-term relationship with a client, I might stop using the consulting and speaking agreements for specific engagements. I have one such client at a major company with whom I’ve worked for more than ten years. We work together very well, we’re good friends, we collaborate effectively, and I don't have to worry about him not paying me or encountering some other misunderstanding. In a case like this, I dispense with the written agreements as an unnecessary overhead step. See, I’m a pragmatic—not dogmatic—process weenie.

Courseware Licensing Agreement

In keeping with my general business philosophy of trying to earn a living while I’m asleep (see the post titled ”A Kind of Business Plan”), many years ago I began licensing my courseware to other companies. Some of these are themselves training companies or independent consultants, who can present my classes to their own clients and pay me a royalty when they do. Other licensees are companies or government agencies that wish to use my materials for internal presentations using their own staff as instructors. I have crafted licensing agreements for these two different situations. Again, you may access my templates for the licensing agreements at the supplemental web page. These agreements specify the materials I'm delivering, the licensing fees and payment terms, and the ways the licensee may and may not use the materials.

I should point out that the terms in my various templates are not cast in concrete. Periodically, a prospective client or licensee raises particular concerns or has a situation that’s a little out of the ordinary. They might ask me to adjust some of the terms, and sometimes making that adjustment is the difference between closing a deal and not. So I certainly have some negotiating flexibility in portions of these agreements, within limits. For example, I will never remove the cancellation or rescheduling fee clause from my speaking agreement, although I might agree to adjust my initial terms if the client pushes back in a reasonable way.


Although I have used these agreements for many years without any problems, they may or may not be suitable for you. I recommend you have an attorney look over whatever speaking and consulting agreements you come up with to make sure they cover all the important bases and provide you with adequate protection, while still being fair to the client. Even though I always start an engagement by sending the client my agreement, many corporations insist upon using their own paperwork, which is always vastly longer, more complex, and more obscurely written than my own. Contracts naturally are always written to the benefit of the entity who wrote it, so you need to read these kinds of agreements carefully and negotiate out any terms that are unacceptable to you. I described some of the terms I find objectionable in an earlier post titled ”Everything’s Negotiable..” Most of the time, though, a well-crafted and simple agreement will suffice to establish the parameters of your client engagements so both parties know what to expect. I do feel better having it in writing.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Thursday, March 22, 2012

Difficult Client? Try these Quick Tips. (contributed by Margaret Meloni)

Margaret Meloni provides coaching, speaking and training that helps professionals become free from the work-related conflict that prevents them from experiencing peace. To learn more about Margaret Meloni please visit, email, or call (866) 639-0487.

Your hands are sweating; your stomach is in knots. Once again, you have a client who has become truly obnoxious. Somehow, he is driving you crazy. If you say left, he says right. The hiring honeymoon is over, and now you see that your client is—believe it or not—a difficult person.

Part of your challenge is that your attachment to your client is both financial- and relationship-based. Oh, and it is tied to money. Wait, did I already say that? Well, which one of you is NOT in business to make money?

What about being respected for your knowledge and your expertise? And—dare I say it—what about your ego? How can this person, this client, hire you to do something and then turn around and disregard your advice? Or, even worse, ask for your input and then do the exact opposite? I mean really, what is up with that?

You know that your reputation either attracts or repels prospective clients. You also know that your ability to get along well with your clients is a strong component of your professional reputation. I would suggest that most of the burden of resolving a difficult situation resides with you. As a consultant, you are hired to be the best of the best, and frequently you serve as a role model to your client and their team. There are expectations that come with being hired for your skills and experience; you are expected to represent professional behavior at its very best.

It is not likely that your difficult client will change for you, but you can change the way the two of you interact. You can take more control of the situation and work towards a positive outcome. In order to do that, I must ask you to do two things: let go of your attachment to finances and, if applicable, set your ego aside. When you let money and ego drive the situation, it shows. I recently overheard a consultant speaking about one of his clients in this manner. “I do not have time for their problems; I have money to make,” the consultant said. I'll bet that his client thinks of HIM as the difficult person. Unless this consultant has some very rare expertise, this may not be a long-term assignment and this client will probably not look to him for future engagements. However, this does not mean that if you have rare expertise, it's okay to be difficult. No one enjoys dealing with difficult people.

If you can let your concern for building an effective working relationship take charge, you are well on your way to a positive outcome. Once you are ready to speak to your difficult client about the friction points, consider the following approach:
  • Prepare for the conversation in advance. Identify what you hope to gain from the interaction and begin with this end in mind.
  • Be flexible. Do not be so focused on your end goal that you can't take a detour in the conversation. This detour may help you understand the perspective of your difficult client.
  • Select a time that is convenient to both of you. Pick a time when both of you can listen and exchange ideas.
  • Listen; really listen to what your difficult client has to say. If your difficult client says something like, “I cannot do that” or “That won’t work,” ask why. Whatever issue he has might not be about you. Try to get the real problem out in the open.
  • Consider letting your difficult client speak first. If he seems comfortable taking the lead in the conversation, then let him take the lead.
  • Maintain emotional objectivity. Remember, whatever drives him to be difficult is about him, not about you. Again, try to turn off your ego and stop thinking about your checkbook.
  • Stay calm. An individual who is upset may become defensive and verbally attack you. Take a deep breath and pause before responding.
If the discussion becomes too heated, you might suggest to your difficult client that you both take some time to cool off. Then agree upon a time when you will reconvene.

No matter how challenging, you need to deal with the situation. Create an agreement between you and your client to stick with the situation until you have both been able to understand one another. You want to create a relationship where you and your difficult client can respect each other as individuals and professionals.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Thursday, March 15, 2012

Some Presentation Tricks I Have Learned

I've delivered about six hundred presentations in the past twenty-five years, ranging from brief webinars to four-day classes. I've applied a number of techniques during these talks, some of which I figured out by myself and some of which I picked up from observing other presenters. In this post I will share some of those techniques and tricks with you.

Open Big: The first thing you need to do is get the audience's attention, to get them on your side so they're receptive to your message. Try to think of an opening for your talk that will get the audience smiling and nodding in agreement immediately; then they're yours for the rest of the show. Several of my talks begin with a short survey. I list ten typical problem areas that frequently occur in the domain of my presentation, be it on software requirements, process improvement, or something else. I ask the audience members to note which of these problems they've experienced on their projects. Then, by show of hands, I ask which have experienced none of the problems I described, then one, and so on up through all ten. Because these are such common problems, I know that many people in the audience can relate to them. In other words, they start nodding along with me from the beginning of the talk: we have a bond of common experience, a bit of rapport. I think this helps make the audience members receptive to hearing suggestions that help them address those all-too-common project challenges, which constitutes the rest of the presentation.

Colorful Flipcharts: In some presentations, I write items on a flipchart, such as ideas and comments contributed by the audience during a group discussion. I picked up a useful technique from someone I saw doing this at a conference once. She used two flipchart markers, alternating the colors as she wrote each item on the chart. This makes the contents of the flipchart easier to read, as the items don't all blur together visually. I now use this simple but effective technique regularly.

Quiet Questioners: Here's another trick I saw a speaker use once. A member of the audience asked him a question. The room was fairly large, and the questioner was sitting fairly close to the front. Therefore, the questioner was speaking too quietly for people in the back of the room to hear. As the speaker listened to the question, he slowly walked away from the questioner. The speaker’s body language clearly indicated that he was listening attentively and thinking carefully about the question. Probably unconsciously, the questioner began speaking more loudly as the speaker grew more distant. This made it easier for other members of the audience to hear the question. I'm not sure if the speaker took that little walk deliberately, but it seemed like a good idea to me. Now, whenever I'm in a similar situation, I do the same thing. Most people really do start speaking louder as they see you moving away. Subtle, but effective.

Let's Get Moving: Listening to a presentation is a passive activity. It's easy for your attention to wander, to drift into a daydream, or even to nod off into slumber. One way for the speaker to combat this is to get the audience members to interact from time to time, either with the speaker or among themselves. Sometimes I will ask them to spend a few moments talking among themselves about a particular topic and then sharing their thoughts with the rest of the group. I also do surveys periodically. I might describe a particular technique or practice in a class and then ask how many members of the audience have used that same method. This gets them moving their bodies a bit with a show of hands.

I have some ulterior motives here, as well. These informal and totally unscientific surveys help me calibrate the audience’s past experience and knowledge. Also, if I'm describing some unfamiliar technique and a skeptical audience member sees that other people around her have also tried that method, maybe my suggestion doesn't seem so strange. It's not just Karl's wacky scheme anymore. She might even be able to ask one of those people who raised his hand about the practice at the next break.

Door Prizes: When I'm delivering a presentation at a conference or a professional society meeting, I sometimes give away door prizes. These could be a copy of one of my books, a CD containing one of my eLearning courses, or some other product. Giving away such prizes is a way to advertise my products and services. Here’s one trick I’ve come up with: If the lucky winner is several rows back in the audience, I pass the item to someone in the front row and asked them to hand it back. This way numerous people have a chance to touch and look at the item, which might stimulate their interest in it.

If you're an experienced trainer or speaker, you’ve no doubt accumulated your own set of tricks that help make your presentations more effective and enjoyable. I invite you to pass those along by commenting on this blog post.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Thursday, March 8, 2012

Money Matters for the New Consultant (contributed by Gary K. Evans)

Gary K. Evans ( spent 17 years as an independent consultant and trainer in object-oriented development and Agile processes. He is now working for a major financial institution in Enterprise Agile Process Enablement.

First, Hire an Accountant

If you're a professional, I assume that you're very good at your chosen field. Because your area of expertise probably doesn't include accounting and tax regulations, you should hire a fellow professional—an accountant—to take care of this. Make sure to shop around and find one with at least some self-employed clientele. Like technologists and any other professional, accountants differ in their skills and specialties. My accountant makes more per hour than I do, and he's worth every penny. Each year, he has saved me money that would have otherwise slipped through my fingers.

Some consultants prefer to do their own taxes, so they buy Intuit QuickBooks or an equivalent tool to help them track their income and expenses. I certainly would not criticize this. I use QuickBooks myself. Whether or not you enlist the services of a professional accountant, you must keep meticulous track of your financial life. QuickBooks does this, and will generate invoices for your clients, flag receivables that are past their payment date, and so forth. If you try to do this with Excel, you are more adventurous than I. Spring for the $200 or so to buy a proper tool like QuickBooks. It's a deductible business expense, and you will be very glad you did. So will your accountant, if you have to give him or her a categorized General Ledger file so you can get the proper deductions and depreciations.

Rates: Don't Be a Cheap Date

Setting rates is neither a science nor a crapshoot. You can peruse some of the many books on this topic to learn exactly how to do this, whether you do fixed fee, daily rate, or hourly rates. Here, I'll comment only on the pitfalls I've encountered.

You don't work every day. W-2 employees get up in the morning, go to work and come home in the evening. Every day. An independent contractor gets up every morning, but what happens after that is somewhat random. In a good economy, expect to be unemployed about a quarter of each year. You do want to have some kind of life, don't you? Another way to think of this is that you work three weeks and have no engagement the fourth week of each month. Factor this down time into your price setting. And, in a bad economy, prepare for up to six months without work. In my worst year, I worked only four months out of twelve. It was tough, but my past discipline in setting aside savings got us through.

Should you match the going rate? Finding the going rate for, say, C++ development in Washington D.C. or anywhere else is easy. The Internet is the most accessible source of such information, and recruiting companies often publish salary surveys organized by skill and geographical region. Starting out, be aware of what clients are paying both salaried employees and contractors. Independent contractors must cover business expenses that employees don't have, so they’re expected to request hourly-equivalent rates from 40 percent to 100 percent higher than do W-2 employees—but you do have to be good enough to justify these higher rates.

I've found considering your value to be a tremendous factor in determining your consulting rates. Value is often equated with price, and I'm not the first person to note that when I increased my rates, I got more and better work because my perceived value increased. If you have extensive experience and real expertise, you can command higher rates.

Lowering your rate to get work. This is a disaster, both now and for the future. Small clients all want to get top-quality work for $25-$35 per hour. If you're willing to go that low just to work, I urge you to get a W-2 job that pays the same rate.

Paying your own expenses from your daily or hourly pay. I did this once—for four weeks. Never again. Now I bill for my services and invoice separately for my expenses, perhaps up to an agreed-upon maximum amount. I don't even negotiate on any other arrangement. Unless you're bidding on a fixed-fee project, reputable companies who work with independents expect to pay services and expenses separately. However, this is just my policy, and Karl has approached this issue rather differently than I. He has often quoted fixed rates for short on-site training engagements that included a portion to cover reasonable hotel, travel and meals. His clients like this because it simplifies processing the invoices, since no receipts are required. And it gives Karl the flexibility to sleep in a tent or stay in a luxury hotel, depending on his choice.

Non-billable time. I was stunned when I discovered how much time I spent doing invoices and expense reports, cold calling and warm calling, organizing files and contact lists, learning new technology, and developing new material—and I couldn't bill anyone for the time! Estimates vary, but an independent 1099 should plan to spend twenty to thirty percent of his working week in non-billable time.

The 2X/3X rule. Independent consulting is costly because you have to cover all your own expenses. That means you must consider yourself as an employer, and price yourself with the mind-set of an employer selling your services to a client at a rate that ensures a respectable profit margin. To this end, I offer up the 2X/3X rule, another piece of wisdom I received from a successful consultant. First, identify the amount you'd be paid as a salaried employee at a corporation doing what you do as a consultant. Doubling this number will provide you a break-even target as a consultant. But if you triple your salary figure, you'll be able to reinvest in your business and grow it. When I first started out and determined the doubled figure, I almost choked. But after just a couple of years, I learned how right he was.

There are roughly 2,000 working hours in a year, so a before-tax employee salary of $100,000 equates to $50 per hour. A consultant doing the same work as an employee earning $100K should be asking for $100 to $200 per hour. Why? The consultant will probably work for a few weeks or months, and short-term engagements carry a higher hourly rate. The independent consultant has no employment security and must pay his or her own overhead: life and disability insurance, retirement funding, business liability insurance, computer equipment, maintenance and repairs, office supplies, telephones, fax, …. That is why the 2X guideline only brings you to the breakeven point.

Don't Burn Cash on an Office

I was amused by a colleague who decided he should go into independent consulting and immediately spent $5,000 on a laptop, fax machine, new PC, answering machine, preprinted business forms with his color logo and a bucket of really marginal items. And he didn't yet have a single client, or even the prospect of one.

Build an office as you need one. I bought an answering machine first so I'd be able to return calls. When my first client called to say he had selected me and was faxing me a contract, I asked him to delay sending it until after lunch. Then I ran out and bought my first fax machine and hooked it up. I received the contract, signed it and faxed back the signature page. That machine lasted seven years, but it had to pay its own way first.

Sole Proprietorship vs. Incorporation

This is an important issue. Incorporating gives you some legal and financial protection, but it costs (extra accounting and filing fees, among other expenses). Some people incorporate right away (presumably an S-Corp designation, not a C-Corp like Fortune 100 companies). Others wait to incorporate until they have an established business and want to shelter their income. Part of the issue is image (corporations have a cachet of stability), and part is cultural (some companies won't hire a sole proprietor, and work only with corporations).

Another option is to setup a Limited Liability Company or LLC. This is a business structure that is simpler and less expensive than an S-Corp, still allows money to flow directly to the LLC organizers, and presents a more business-like image than being a sole proprietor..

I was a sole proprietor under the DBA (Doing Business As) designation for more than six years before I incorporated as an S-Corp. I now have a second business for software product development and it is an LLC. The structure you choose is a business and legal decision, and you should listen to your accountant and legal advisers here for guidance on the structure that is best for you and your goals.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Thursday, March 1, 2012

You Say You Want to Write a Book? (Part 2/2)

My first draft of Creating a Software Engineering Culture left much to be desired. I began with a laughably skimpy outline, less than three pages for what turned into a nearly 400-page book. The result was a badly structured manuscript that had thirteen chapters of widely varying length, endless bullet lists, a lack of continuity, and numerous other problems. Thanks to much valuable feedback from the publisher (I’m forever indebted to Wendy Eakin and her colleagues at Dorset House Publishing), I was able to greatly improve the manuscript, albeit with considerable effort that added little value to the content but a lot to the presentation. Following are some things I learned.

It's usually a good idea to organize a book into parts having groups of chapters on a common theme. I restructured the initial thirteen chapters of Creating a Software Engineering Culture into twenty chapters of more uniform length, grouped into six parts. This restructuring required a month of tedious drag-and-drop editing and cleanup. I learned my lesson, though. For my next book, the first edition of Software Requirements, I began with a much more carefully thought-out seventeen-page outline. As a result, I had to do only very minimal restructuring along the way. This is analogous to designing before coding. I'm a big believer in working hard on your book's architecture.

It's important to have some threads of continuity—recurrent themes—running through the book. Tie sections of the book back to those themes, both to make sure that the content you include is relevant and on-message, and to constantly reinforce those themes to the reader. Sometimes you might be tempted to include material that you're excited about, but if it doesn't align with one of your book's themes, maybe it doesn't belong there. I read the manuscript for one colleague’s first book and told her, "There are two and a half books in here. Figure out which one you’re writing this time, then take everything else out." She wrote a great book, and then another one. Focus, focus, focus.

Sometimes when I've read manuscripts by other authors, it seems that they've thrown in every thought and idea and experience that they’re excited about, regardless of whether it fits with the chapter or even with the book. To help avoid this tempting trap, here's one technique I use. I put just a few bullet points at the top of each chapter before I begin writing the chapter. These bullets remind me of the key messages I wish to impart in that chapter. As I write, I refer back to that short list periodically to make sure I'm not throwing in extraneous stuff just because I think it's cool or interesting. Of course, I might adjust the focus of the chapter if I find that my initial intent wasn't quite right. Then, when I'm done drafting the chapter, I remove those temporary bullets because they've served their purpose of helping keep me on course.

You need to devise some "hooks," devices to grab the reader's attention and give your book some distinctive and memorable presentation patterns. You might study other books that you find appealing and see what distinctive characteristics they have that stick in your mind or help make the content more accessible to the reader, Some hooks I've used are:
  • Beginning each chapter with a pithy quotation or a concise focal statement like the "pearl of wisdom" that opens each chapter of Pearls from Sand.
  • Using icons in the margin to identify elements like "culture builders" and "culture killers," cross-references to other chapters, best practices, and true stories.
  • Including a summary of key points at the end of each chapter.
  • Including an annotated bibliography (instead of just a list of cited references) at the end of each chapter.
  • Appending a list of next steps, practice activities, and/or worksheets to each chapter to help the reader begin applying the material presented.
  • Embedding anecdotes in boxes or sidebars to relate true-life experiences that reinforce the points made in the text.
Thinking about these design elements and getting a clear focus on the scope, objectives, and themes for my books help me write much more efficiently, resulting in far less rework than my first book required. Or you could just start typing and see where you end up, whatever works for you. There's no single correct approach to writing a book, but this is the approach I find effective.

Writing a book is not easy. It takes a lot of time, dedication, and persistence. When I was writing my first book (while working full-time at Kodak), periodically I would call out to my wife. “Chris,” I’d say, “would you come shoot me, please?” One day she replied, “I’m about ready to.” Not being totally stupid, I stopped asking. But, like everything else, writing books gets easier with practice. When I completed the manuscript for my second book three years later, I told Chris, “That didn’t go too badly.” “No,” she replied, “you didn’t ask me to shoot you even once.” I guess that’s progress.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)