9 ms·

How “We’re booked” was ruining our business

111 points by RickDT 13y ago

timgl 13y ago
I used to work for a wordpress shop. All these other shops we're basically just a one-man show, but the one I worked for was flourishing, with 12 employees. When I asked why, the director explained that they used to only do business development when they didn't had clients, and stopped doing it when they did. The moment they hired a full-time sales manager, whom was doing business development constantly, the business thrived and grew faster than all the other shops. This is another viewpoint to the same morale in the article...
- cosmie 13y ago
  Another benefit of hiring a (good) sales manager is that they have mastered walking this tightrope and know how to prioritize client requests and set expectations, both for clients (timelines) and you (expected capacity).
programminggeek 13y ago
It seems like the bigger problem they will have in their business is that they are going to be continuously busy "doing work" instead of "building the business". Such is the way of consulting. If you can't take on more work by hiring more people, then you can't scale. If you can't scale beyond the team you have, you haven't created a business, you've created a job. There's nothing wrong with creating a job for yourself, but know that it's not the same as a business even if you call yourself a business.
- deleted 13y ago
  [deleted]
  - astrodust 13y ago
    Both those companies spend an extraordinary amount of time in the field developing leads and business relationships. I would be stunned if even a single hour of consulting work is billed without hundreds of up-front hours necessary to land the deal.
- chasing 13y ago
  I have a one-person company. It's a business. And a job.
- patio11 13y ago
  If you can't scale beyond the team you have, you haven't created a business, you've created a job. This meme has little entanglement with reality. A one-man consultancy's chief concerns are almost entirely alien to a W-2 employee's chief concerns: as a W-2 employee your chief economic objectives are work-performance, as a consultancy your chief economic objectives are almost certainly external to the actual delivery of your professional skills. A one-man consultancy can unilaterally offer themselves a pay-raise of 25%+ every 6 months if market conditions support it; this happens in vanishingly few salaried jobs. A one-man consultancy can build intellectual and other forms of capital which are absurdly portable; this is possible as a salaried employee but their access to capital formation is markedly inferior. (For example, it is exceptionally difficult as a salaried employee to licitly walk away with your employer's take on your core job function and then implement it for competitors. That's pretty much the default in consultancies, and deviating from it costs the client extra money.) A consultancy has significant work-related expenses in a way that a salaried employee does not. A consultancy has a vastly more complicated tax, compliance, insurance/risk-mitigation, etc etc, situation than a similarly situated employee. Perhaps most relevant to someone who thinks headcount is the only meaningful way to scale things: a consultancy, even a one-man consultancy, even a one-man consultancy which outside observers believe is impossible of maturity required to scale, has a permanent call option on growing headcount.
howeyc 13y ago
You need to charge enough of a overhead that you can afford to have a person or two that can handle all the impromptu calls, feeler emails, coffee meetings, etc.
pud 13y ago
In my experience freelancing, if you say "yes" to all new clients instead of "no" -- even if you're too busy and feel guilty for taking work you think you can't do -- you find a way. When it happened to me, I went from solo freelancer to hiring 6 full-time engineers, which essentially means I created an agency. It was great. The only challenge then, was convincing clients who'd hired me specially, that "someone else from my team may work on it, but the quality will be just as high." The worst-case scenario: If you take on too much work, you may end up delivering late. Usually not the end of the world. But if that's not an option, you'll still manage to find a way.
- RickDT 13y ago
  This is the mindset we're trying to adopt now. Say yes, because too much work is a much better problem than not enough work.
  - random42 13y ago
    This might be the wrong lesson to take. You CANNOT deliver quality work if you are over booked. To me, it looks like you need to raise your rates, not accept more work at the current rates, it wont be sustainable.
    - StavrosK 13y ago
      Well, it depends. I'm fully booked myself, but I hired a good programmer to take on another project. He's not as experienced but is a very fast learner (also he's diligent), so with a few minutes of extra work per day, I managed not to shut the door to am opportunity, and the deliverable is turning out very well indeed.
nthj 13y ago
"We're booked until the end of the year" sounds suspiciously like "We're not charging enough money."
- wvenable 13y ago
  Charging more money doesn't create more time, especially if you're already solidly booked. Now it's great to quote a really high rate when you're totally booked because there is almost no risk but then it can be challenge when the client then accepts it.
  - Moto7451 13y ago
    I believe his point is you shouldn't find yourself in that situation in the first place.
    - wvenable 13y ago
      Wouldn't that require the ability to predict the future.
tptacek 13y ago
This is the fundamental challenge of all professional services businesses. It has a name: "Feast or Famine". Raise your rates. Another thing that is true of many professional services businesses: clients hate it when you say "No", and unless they have a process in place to balance work across multiple vendors, will prefer vendors that reliably say "Yes" to all their project requests. Good luck, welcome to the big leagues.
- RickDT 13y ago
  This was the biggest "oh crap, what did we do to ourselves?" moment. Effectively saying "no" took us off those people's radars permanently.
  - graeme 13y ago
    Have you tried recontacting them? A lot of people are open to a sincere mea culpa announcing a policy change. I suspect you'll win back more than 0% of those clients, on good terms.
    - svmegatron 13y ago
      This is great advice, AND it dovetails nicely with the advice I've been seeing here a lot lately: send more email to prospective customers :-)
patio11 13y ago
One option which is more constructive than "We're booked, let me exit from this conversation" is "We find ourselves in very high demand at the moment. Can I interest you in an offering which isn't the partners personally delivering this entire engagement?" That could be the partners doing e.g. a design/wireframe and then the client shopping that out (or the partners doing so), a training engagement, a product offering ("I have no availability in December to write an email campaign for you for $20k, but you can have me tell your team all about the campaign they could write for you, it will only cost you $2k, and you can keep the video"), or (at the waaaaaay low end of engagement) just sign them up for an email list to have you stay as their top-of-mind team on your problem space. There's a few other options, too. There is no zeronary Consultancy#are_we_booked? method. It's ternary: Consultancy#are_we_booked?(price, schedule, scope). For a price you can virtually always take on a new client starting tomorrow. (I mean, you can't physically be on two continents at once, but if you're scheduled in New York one week and a client in Germany wants the same week, if they're willing to pay 5X what New York is, then you call New York and say "Hey guys, have I got a proposition for you: how about we delay this engagement N weeks and in return I'll discount 20% off the invoice.") You probably retain scheduling flexibility with clients unless they pay extra to get scheduling predictability (p.s. ask Thomas about this in more detail, it's a great hack), so if you're scheduled above 80% and a lucrative gig comes in, you might be able bump everything back N weeks without blowing any windows even without having to renegotiate things, especially if you are capable of hiring and ramping someone in that time. That is, of course, the ultimate consultancy scaling mechanism. P.S. In parallel with any, all, or none of the above advice, if you find yourself above 80% utilization, raise rates.
- RickDT 13y ago
  Awesome suggestions all around. We're definitely going to be trying out all of the above to see what fits.
- nobodysfool 13y ago
  If you are at the point where you are so busy working on your backlog that you can't build up your backlog, it might be worth it to pay a 'technical sales' person to build your backlog for you, and set expectations with the clients.
ziko 13y ago
You were basically being cocky saying: "We're doing fine without you and we don't want to work for you." That's not how business works.
JangoSteve 13y ago
For what it's worth, we've been in the same position lately of being pretty booked up, but we took the approach they're suggesting from the beginning. No matter how busy we are, I never say "no" to an opportunity to talk or sit down to coffee with new people, whether they be a potential client or just someone seeking advice. I'll even go through the discovery phase and estimate/quote out their project, and only after the quote do I bring up our timeline. Most of the time, they are fine with the timeline (though I've always found a way to make it sooner than "next year", usually a few months out at most). If they need it doen sooner, then I'll find a way to get it done with our partners by sub-contracting. The rest have been fine with that. If they weren't, then I'd simply help them find someone else who can do it. It's worked pretty well so far. But I can attest, it is very hard to go talk with someone for an hour when you know there's actual work you should be doing. I feel the same way though when I'm doing taxes or keeping our books. They have to be done. You just do it anyway.
- nthj 13y ago
  > I'll even go through the discovery phase and estimate/quote out their project I've started charging for this process. Partly because otherwise I'd spend all my time consulting for free, partly because it's a huge value add to their business, and partly one-to-many "oh great, thanks for estimating this. I took it to your competitor and now they're willing to underbid you by $5K because all the hard work is done for them." scenarios.
  - JangoSteve 13y ago
    That's a very good point. We haven't had the problem of them taking our quotes to our competitors very often. We've had several people who took our quotes to our competitors, they undercut the quote, but then they ended up choosing us anyway even at the higher price, almost always because we "inspire more confidence than anyone else" in our ability to execute. That being said, it usually only takes us another couple hours to quote a project once we've gotten to that stage, and we have started billing for it when it seems like it will take longer, or if they want more detail or revisions.
designflip 13y ago
I can't be the only one bitching about websites using large font like this? Did I just turn into 'the old guy'?
phirschybar 13y ago
We've been overbooked for years and while it can be very stressful at times it is of course better than having no work. The reality is that we sometimes come in late on delivery but in the end our clients like us, stick with us and refer us because they like our work and the end-product is good. Two points I would add to the discussion are: 1) that in addition, or in lieu of raising rates consider lengthening the project time-line. You can often push a project out further in time which both softens the expectations and gives you more time to deliver quality and deal with more iterations. 2) to take the time to feel out the client. If you are really in demand and becoming overbooked the LAST thing you want is a terrible client who can potential swamp your resources. Work only with people who will respect you and your team and never settle on this even if it means you can make more money. It can be worth the extra 2 or 3 meetings before a work agreement to see if you will have a productive relationship before committing to the project. Being over-busy is a great opportunity to be picky about the projects you decide to take on.
yason 13y ago
It's not about saying "yes" or "no" per se but the terms of a "yes": "We have time for your project after the summer. If you want it sooner, I can look if that could be arranged but I'm afraid it's going to cost you quite a bit."
jamesjguthrie 13y ago
I did exactly this last year and ended up with no new for January-March. It was a terrible idea and I'm now operating with the 'Open for Business' mindset too.
CodeCube 13y ago
This is 100% the reason that I haven't jumped on the independent contractor wagon. I know that's probably not considered very ambitious ... but I just know that I'm not the kind of person that can focus on bizdev while at the same time busy with shipping software.
jvictor118 13y ago
"We're booked" saved my business. I was taking on too much business and finally decided to make a waitlist. I would tell people what # they'd be on the list and about how long it would take until delivery. That way I was still adding about 50% of the prospects to the list, since they didn't mind waiting. Had I not done this, I would've risked all my clients -- and my reputation.
Macsenour 13y ago
When I signed a new game developer I always asked them, how do you "mind the gap?" The gap between projects is much harder for game devs than making a game. If I look back at all the devs, the ones that are gone had no gap financing. Don't ever stop Biz Dev even if your publisher LOVES you.

111 points by RickDT 13y ago

timgl 13y ago

I used to work for a wordpress shop. All these other shops we're basically just a one-man show, but the one I worked for was flourishing, with 12 employees. When I asked why, the director explained that they used to only do business development when they didn't had clients, and stopped doing it when they did. The moment they hired a full-time sales manager, whom was doing business development constantly, the business thrived and grew faster than all the other shops. This is another viewpoint to the same morale in the article...

cosmie 13y ago
Another benefit of hiring a (good) sales manager is that they have mastered walking this tightrope and know how to prioritize client requests and set expectations, both for clients (timelines) and you (expected capacity).

programminggeek 13y ago

It seems like the bigger problem they will have in their business is that they are going to be continuously busy "doing work" instead of "building the business". Such is the way of consulting. If you can't take on more work by hiring more people, then you can't scale. If you can't scale beyond the team you have, you haven't created a business, you've created a job. There's nothing wrong with creating a job for yourself, but know that it's not the same as a business even if you call yourself a business.

deleted 13y ago
[deleted]
- astrodust 13y ago
  Both those companies spend an extraordinary amount of time in the field developing leads and business relationships. I would be stunned if even a single hour of consulting work is billed without hundreds of up-front hours necessary to land the deal.
chasing 13y ago
I have a one-person company. It's a business. And a job.
patio11 13y ago
If you can't scale beyond the team you have, you haven't created a business, you've created a job. This meme has little entanglement with reality. A one-man consultancy's chief concerns are almost entirely alien to a W-2 employee's chief concerns: as a W-2 employee your chief economic objectives are work-performance, as a consultancy your chief economic objectives are almost certainly external to the actual delivery of your professional skills. A one-man consultancy can unilaterally offer themselves a pay-raise of 25%+ every 6 months if market conditions support it; this happens in vanishingly few salaried jobs. A one-man consultancy can build intellectual and other forms of capital which are absurdly portable; this is possible as a salaried employee but their access to capital formation is markedly inferior. (For example, it is exceptionally difficult as a salaried employee to licitly walk away with your employer's take on your core job function and then implement it for competitors. That's pretty much the default in consultancies, and deviating from it costs the client extra money.) A consultancy has significant work-related expenses in a way that a salaried employee does not. A consultancy has a vastly more complicated tax, compliance, insurance/risk-mitigation, etc etc, situation than a similarly situated employee. Perhaps most relevant to someone who thinks headcount is the only meaningful way to scale things: a consultancy, even a one-man consultancy, even a one-man consultancy which outside observers believe is impossible of maturity required to scale, has a permanent call option on growing headcount.

howeyc 13y ago

You need to charge enough of a overhead that you can afford to have a person or two that can handle all the impromptu calls, feeler emails, coffee meetings, etc.

pud 13y ago

In my experience freelancing, if you say "yes" to all new clients instead of "no" -- even if you're too busy and feel guilty for taking work you think you can't do -- you find a way. When it happened to me, I went from solo freelancer to hiring 6 full-time engineers, which essentially means I created an agency. It was great. The only challenge then, was convincing clients who'd hired me specially, that "someone else from my team may work on it, but the quality will be just as high." The worst-case scenario: If you take on too much work, you may end up delivering late. Usually not the end of the world. But if that's not an option, you'll still manage to find a way.

RickDT 13y ago
This is the mindset we're trying to adopt now. Say yes, because too much work is a much better problem than not enough work.
- random42 13y ago
  This might be the wrong lesson to take. You CANNOT deliver quality work if you are over booked. To me, it looks like you need to raise your rates, not accept more work at the current rates, it wont be sustainable.
  - StavrosK 13y ago
    Well, it depends. I'm fully booked myself, but I hired a good programmer to take on another project. He's not as experienced but is a very fast learner (also he's diligent), so with a few minutes of extra work per day, I managed not to shut the door to am opportunity, and the deliverable is turning out very well indeed.

nthj 13y ago

"We're booked until the end of the year" sounds suspiciously like "We're not charging enough money."

wvenable 13y ago
Charging more money doesn't create more time, especially if you're already solidly booked. Now it's great to quote a really high rate when you're totally booked because there is almost no risk but then it can be challenge when the client then accepts it.
- Moto7451 13y ago
  I believe his point is you shouldn't find yourself in that situation in the first place.
  - wvenable 13y ago
    Wouldn't that require the ability to predict the future.

tptacek 13y ago

This is the fundamental challenge of all professional services businesses. It has a name: "Feast or Famine". Raise your rates. Another thing that is true of many professional services businesses: clients hate it when you say "No", and unless they have a process in place to balance work across multiple vendors, will prefer vendors that reliably say "Yes" to all their project requests. Good luck, welcome to the big leagues.

RickDT 13y ago
This was the biggest "oh crap, what did we do to ourselves?" moment. Effectively saying "no" took us off those people's radars permanently.
- graeme 13y ago
  Have you tried recontacting them? A lot of people are open to a sincere mea culpa announcing a policy change. I suspect you'll win back more than 0% of those clients, on good terms.
  - svmegatron 13y ago
    This is great advice, AND it dovetails nicely with the advice I've been seeing here a lot lately: send more email to prospective customers :-)

patio11 13y ago

One option which is more constructive than "We're booked, let me exit from this conversation" is "We find ourselves in very high demand at the moment. Can I interest you in an offering which isn't the partners personally delivering this entire engagement?" That could be the partners doing e.g. a design/wireframe and then the client shopping that out (or the partners doing so), a training engagement, a product offering ("I have no availability in December to write an email campaign for you for $20k, but you can have me tell your team all about the campaign they could write for you, it will only cost you $2k, and you can keep the video"), or (at the waaaaaay low end of engagement) just sign them up for an email list to have you stay as their top-of-mind team on your problem space. There's a few other options, too. There is no zeronary Consultancy#are_we_booked? method. It's ternary: Consultancy#are_we_booked?(price, schedule, scope). For a price you can virtually always take on a new client starting tomorrow. (I mean, you can't physically be on two continents at once, but if you're scheduled in New York one week and a client in Germany wants the same week, if they're willing to pay 5X what New York is, then you call New York and say "Hey guys, have I got a proposition for you: how about we delay this engagement N weeks and in return I'll discount 20% off the invoice.") You probably retain scheduling flexibility with clients unless they pay extra to get scheduling predictability (p.s. ask Thomas about this in more detail, it's a great hack), so if you're scheduled above 80% and a lucrative gig comes in, you might be able bump everything back N weeks without blowing any windows even without having to renegotiate things, especially if you are capable of hiring and ramping someone in that time. That is, of course, the ultimate consultancy scaling mechanism. P.S. In parallel with any, all, or none of the above advice, if you find yourself above 80% utilization, raise rates.

RickDT 13y ago
Awesome suggestions all around. We're definitely going to be trying out all of the above to see what fits.
nobodysfool 13y ago
If you are at the point where you are so busy working on your backlog that you can't build up your backlog, it might be worth it to pay a 'technical sales' person to build your backlog for you, and set expectations with the clients.

ziko 13y ago

You were basically being cocky saying: "We're doing fine without you and we don't want to work for you." That's not how business works.

JangoSteve 13y ago

For what it's worth, we've been in the same position lately of being pretty booked up, but we took the approach they're suggesting from the beginning. No matter how busy we are, I never say "no" to an opportunity to talk or sit down to coffee with new people, whether they be a potential client or just someone seeking advice. I'll even go through the discovery phase and estimate/quote out their project, and only after the quote do I bring up our timeline. Most of the time, they are fine with the timeline (though I've always found a way to make it sooner than "next year", usually a few months out at most). If they need it doen sooner, then I'll find a way to get it done with our partners by sub-contracting. The rest have been fine with that. If they weren't, then I'd simply help them find someone else who can do it. It's worked pretty well so far. But I can attest, it is very hard to go talk with someone for an hour when you know there's actual work you should be doing. I feel the same way though when I'm doing taxes or keeping our books. They have to be done. You just do it anyway.

nthj 13y ago
> I'll even go through the discovery phase and estimate/quote out their project I've started charging for this process. Partly because otherwise I'd spend all my time consulting for free, partly because it's a huge value add to their business, and partly one-to-many "oh great, thanks for estimating this. I took it to your competitor and now they're willing to underbid you by $5K because all the hard work is done for them." scenarios.
- JangoSteve 13y ago
  That's a very good point. We haven't had the problem of them taking our quotes to our competitors very often. We've had several people who took our quotes to our competitors, they undercut the quote, but then they ended up choosing us anyway even at the higher price, almost always because we "inspire more confidence than anyone else" in our ability to execute. That being said, it usually only takes us another couple hours to quote a project once we've gotten to that stage, and we have started billing for it when it seems like it will take longer, or if they want more detail or revisions.

designflip 13y ago

I can't be the only one bitching about websites using large font like this? Did I just turn into 'the old guy'?

phirschybar 13y ago

We've been overbooked for years and while it can be very stressful at times it is of course better than having no work. The reality is that we sometimes come in late on delivery but in the end our clients like us, stick with us and refer us because they like our work and the end-product is good. Two points I would add to the discussion are: 1) that in addition, or in lieu of raising rates consider lengthening the project time-line. You can often push a project out further in time which both softens the expectations and gives you more time to deliver quality and deal with more iterations. 2) to take the time to feel out the client. If you are really in demand and becoming overbooked the LAST thing you want is a terrible client who can potential swamp your resources. Work only with people who will respect you and your team and never settle on this even if it means you can make more money. It can be worth the extra 2 or 3 meetings before a work agreement to see if you will have a productive relationship before committing to the project. Being over-busy is a great opportunity to be picky about the projects you decide to take on.

yason 13y ago

It's not about saying "yes" or "no" per se but the terms of a "yes": "We have time for your project after the summer. If you want it sooner, I can look if that could be arranged but I'm afraid it's going to cost you quite a bit."

jamesjguthrie 13y ago

I did exactly this last year and ended up with no new for January-March. It was a terrible idea and I'm now operating with the 'Open for Business' mindset too.

CodeCube 13y ago

This is 100% the reason that I haven't jumped on the independent contractor wagon. I know that's probably not considered very ambitious ... but I just know that I'm not the kind of person that can focus on bizdev while at the same time busy with shipping software.

jvictor118 13y ago

"We're booked" saved my business. I was taking on too much business and finally decided to make a waitlist. I would tell people what # they'd be on the list and about how long it would take until delivery. That way I was still adding about 50% of the prospects to the list, since they didn't mind waiting. Had I not done this, I would've risked all my clients -- and my reputation.

Macsenour 13y ago

When I signed a new game developer I always asked them, how do you "mind the gap?" The gap between projects is much harder for game devs than making a game. If I look back at all the devs, the ones that are gone had no gap financing. Don't ever stop Biz Dev even if your publisher LOVES you.