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How to be a Good Consultant When Clients are Friends
The Toughest Consulting Gigs You'll Ever Get
One of the best things about being in a consulting business for yourself is the opportunity to create new friendships within your network. But when those "friends" decide to become clients, these relationships enter a whole new, challenging dimension.
Drawing the line between what is friendly conversation and what is "consulting" can be tricky. Brain picking or "I just have a quick question" requests can back a consultant into a corner. Answer the request, forfeit the fee and save the friendship? Or stand firm, charge and possibly jeopardize the friendship and the sales?
Why I Might Not Want Coffee With You
It's no secret that I love hanging with friends at popular coffee shops. But that's also where I can get myself into trouble when I meet with business friends.
The atmosphere is friendly and the conversation easily meanders from family and fun to business. Then a "What I should do about...?" question enters the exchange. This is a little like a brain picking bonus round. This is consultation without compensation.
Best defense is to be prepared for the "coffee consult" request. Kindly suggest that the topic would be better addressed in an official engagement.
Sign Off or Sign Out!
If a friend is amenable to officially doing business with you, you may be tempted to dispense with some of your normal procedures and paperwork. DON'T! Always get a sign off from your friend on whatever paperwork you do with non-friend clients. If things ever go awry while working together, you'll be glad you did.
Keeping Friends Accountable
Another tough aspect when clients are friends is holding them accountable for payments, performance and deadlines.
As friends, you may be aware of some financial challenges your client friend is facing. So it may be tempting to be flexible on payment due dates or forego prepayment requirements. Beware of these situations:
- Services easily lose their value once rendered. Clients who are financially challenged can sometimes slip into "Well, I don't think it was worth that" mode when an invoice arrives. A prepayment policy can help prevent some of these situations.
- Pay to play. If you're aware of a client friend's financial difficulties, be honest about your expectations for payment for what you are offering. Again, a prepayment policy might help your friend become both financially and emotionally invested into working with you.
- Discounting dangers. If you feel inclined to offer a friend discount (hint: a discount is never required!), make sure that all invoicing clearly shows the regular price and that it was discounted, as well as why it was discounted. The danger in discounting is that your friend could mentally peg the value and price of your services to be at the discounted rate from here to forevermore, not to mention that she may tell her friends what she actually paid. Then your client friend's friends may be expecting that rate, too. When discounting your services, you yourself may also slip into thinking that you won't provide your standard level of service to make up for the lower payment. Don't automatically discount for friends without considering the consequences.
- Setting boundaries. If your client has had anytime cell phone, email and texting availability with you, you may need to set some boundaries and procedures on access during your engagement. Be clear about what will and will not be allowed. If you do wish to continue to have regular "friendly" chatter while consulting, then be very careful to call out when the connection veers into consulting territory. If not, you may find that you'll be giving away hours of unpaid consulting time.
Setting expectations for performance and deadlines and, more importantly, sticking to them, can be challenging with friends. Sometimes addressing payment for services helps put client friends into work mode since they don't want to waste their investment. But you may still experience some friend backsliding in terms of meeting deadlines and accomplishing tasks. Be honest about performance and progress throughout the engagement.
Another difficult, but related scenario, comes up when a friend asks to "barter" for your consulting services. Sometimes this can be a win-win for both parties (I've had some very successful arrangements). On other occasions, it can be disastrous, especially if the bartered services from the friend are something you don't really need or want... or, worse, something you'd rather purchase from someone else other than your friend.
While it may be difficult to tell your friend when a barter is not an ideal fit for you, it's usually better than becoming resentful about providing services for less than you feel you're worth.
As noted for all consulting arrangements when clients are friends, don't forget to go through your usual procedures and paperwork for bartered services. As well, bartered services can carry tax ramifications. Consult with your CPA or accounting professional on bartering tax rules that will apply to you.
Don't "Friend" Out On Your Responsibilities Either!
In addition to friends expecting unpaid perks and privileges, consultants can also easily slip into thinking that "it's just a friend" mode and not provide the same high level of service that they offer to regular customers.
Just as clients can be more invested into an official business relationship when they pay, when you get properly compensated for services you offer, you'll also be more inclined to do your best.
Disclaimer: Both the publisher and author have used their best efforts in preparation of this information. No representations or warranties for its contents, either expressed or implied, are offered or allowed and both parties disclaim any implied warranties of merchantability or fitness for your particular purpose. The advice and strategies presented herein may not be suitable for you, your situation or business. Consult with a professional advisor where and when appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other damages, including but not limited to special, incidental, consequential or punitive, arising from or relating to your reliance on this information.
© 2016 Heidi Thorne