When you first start you computer consultancy, you need clients. The faster you can get them, the more secure your business will be and the better you will feel. Having a growing client bank means repeat business. And repeat business is the easiest type of business to get.

It costs you next to nothing, the client already knows you, you generally know what to expect and you cement your relationship with the client even further.

Let us agree that when starting out, your primary goal must be to get clients – as many as you can and as fast as possible. There are boundaries to this goal. You don’t want to work for free and you don’t want to travel too far if you can help it! It has got to be cost effective.

Expanding market share sounds very grand but it means the same as going for growth. You will be increasing your share of the market. We are talking about controlling only a very small percentage of the available market in your area, but it is still a useful way of looking at what you are doing.

There will come a point where your market share will be such that you cannot service any more clients – you are too busy. This is the goal to set when first starting out. From then on, you can look at hiring staff to expand your business. That is another topic in itself, but the possibility is there if you have sufficient ambition and drive. It is no picnic but the rewards can be substantial.
Benefits of going for market share
The first benefit of going for market share is security. Having no clients is a risky place to be as what happens if your marketing program doesn’t do as well as you hoped? You end up with no income, which means your cash flow will be hit. Then you hit a vicious circle of no cash to pay for adverts and no adverts mean no enquiries, sales or money.

With 50 clients in your “client bank”, you will generate repeat enquiries that trickle in, each week. Sometimes the trickle will turn into a flood as they all ask for work at the same time. Great! This is exactly what you want. But it won’t happen unless you build your client list fast.
Dangers to avoid when growing fast
Most of us have heard about companies going under because they grew too fast. Yet for a lot of people, it almost seems like a contradiction. How can the business fold when they are getting so much business? All that money in surely means they are going to go from strength to strength?

Yes, perhaps. But all companies have a limited credit line. They can only borrow a limited amount of money. Bankers are a very cautious lot and they will not keep on lending more and more money. They look at the risk factors in detail. And they will put a limit on your borrowing at some stage, if it appears that you are growing too fast.

Take the following example:

A company gets a lot of enquiries, so they are quite rightly optimistic about their new marketing campaign. They borrow some money to roll out some advertising. They also take on new staff to cope with the anticipated demand. Then several clients delay payment. The company is not getting as much cash in as they anticipated. Before they know it, their new fixed costs (extra labour) and the increased advertising expenditure has starved them of funds. They go to the bank for money and they get turned down. Now, staff cannot be paid and suppliers are put on hold. In a worse case scenario, the business comes to a grinding halt. Cash flow keeps the business running but a cash crunch can end it.

In your case, starting off with no staff, you just have to be careful not to spend too much too early on fixed costs, such as cars, office, office equipment, expensive laptops and so on. While you may think you need these items, in most cases you can get by without. Don’t try to run before you can walk.

Always try to stay ahead of the game. If you give your clients one month to pay, assume they will take two. If you are doing a large project with one client, get them to pay in instalments so you aren’t hit with a cash crunch. Try to plan the cash flow.

Pricing strategies to adopt

To grow fast, there is only way to price – low! Not only does it convert more enquiries into sales, it also leads to more repeat business. This is what happened to me in the first month I started my own one-man computer consultancy. I charged a rate that was too low for the market but it did teach me some valuable lessons. I learnt that low prices lead to excellent enquiry to conversion ratios and a great deal of repeat business. At such low rates, you get invited back time after time as you represent excellent value for money.

If your rates are low enough, you expand your client bank very quickly. This is what you want. Once you have enough to work with, you can look at slowing increasing your rates so that you get paid more fairly for your work. Your charging rate will start to approach the market rate and you will begin to push up your existing clients rates. It is not always easy for your early clients to accept these price increases, as they have got used to using you at such a low price. But if you have a done a good job for them and they research alternative suppliers, they will find your rates are indeed not high, even though they have risen. And those who you lose because of higher rates are clients who will ultimately not be profitable for you to retain.