This is a guest post written by small-business consultant Rob Place.
Client-focused (clifo) solopreneurs have to come to terms with one fundamental question when they start their business: how will I deliver my service to the client? Will I coach, consult, train, or freelance? This post looks at the revenue model for each, how to market each, and tips on which one to specialize in.
Overview of Each
Clifo solopreneurs leverage their skills to make money—be it through Web site design, copyrighting, blogging, business-plan writing, photography, accounting, etc.—and at some point when hanging their shingle, they have to decide how they’ll deliver their expertise to their clients. Value can be delivered to clients through empowering (coaching), problem-solving (consulting), educating (training), or producing (freelancing).
Coaching enables clients to reach their own conclusions and create their own solution to their problem. This starts with the coach asking clients to state their goal. Once a goal is decided upon, a coach works with them over a specified time period—designing a process to work through, giving assignments, and holding them accountable to reach their goal.
Consulting is less about empowering clients to realize a solution and more about creating a solution. While coaches create processes to navigate a client to reach their own solution, consultants analyze the problem, advise a client on a how to solve the problem, and then implement the solution.
Training teaches clients how to do something. Each training session requires clients to be present, yet it requires little client interaction. (That’s why you see so much training online where the trainers don’t even interface with the trainees.) Trainers don’t hold themselves accountable to client results, as it’s more of a monologue than a dialog. The Trainer essentially says: “Here’s the training. Good luck with the knowledge.”
Freelancing is producing a deliverable in a specified time period to the client. The freelancer will work on it with limited interaction with the client and when finished, hand the deliverable to the client. While similar to consultants, freelancers don’t diagnose and analyze an existing problem. The client simply wants something to be produced from nothing.
In terms of solving a client’s problem, the easiest way to think of this is:
How Do They Work?
You can think of each delivery method in terms of the amount of client interaction and the extent of problem solving on behalf of the client. As you can see in the matrix below, trainers and coaches don’t solve client problems, while freelancers and consultants do. Clients don’t value the personal interaction with the freelancers and trainers, while consultants and coaches are paid for it.
With high client interaction yet a low expectation for problem-solving, coaches need to balance a nurturing and stern role in order for clients to get results. Like a psychologist, they need to be able to listen and then direct. They need to see the client’s problem in context. If the client can’t solve a problem (i.e. start a business), the coach will have to look beyond the immediate problem and look at related issues (i.e. look at more than just the business plan—maybe the client’s home environment or history of finishing projects). Coaches have to be disciplined on the scope of their role in order for them to succeed. They are there to only help the client set a tenable goal and then facilitate the process of the client reaching the goal by breaking down the work into manageable steps. It is the enabler role, and ultimately, success lies with the client.
The consultant tends to be more analytical than the coach as s/he analyzes a problem plaguing the client (i.e. slow sales, disorganized recordkeeping, poor Web site conversions) and suggests the best course of action to resolve the problem. While there is high client interaction, consultants don’t handhold and advise more than listen. Consultants are better equipped with analytical versus counseling skills. Consultants start a job by figuring out the client problem through a situational analysis. They will then write a proposal to the client, which, if agreed upon, indicates what implementation will be done. The consultant will then implement a solution to the problem, be it designing a better marketing campaign, developing a better record-keeping system, or a Web site that converts visitors better. The client is involved in the process due to the signoffs required for each step and the payment that takes the work to the next phase.
The trainer either teaches onsite or online in the form of a conference center event, an e-book, a video, or an online conference. Training can be for a DIY (do-it-yourselfer) or a business. The trainer’s only aim is to deliver a prescription through instructions and anecdotes. The implementation is to be done by the client. Trainers spend much of their time developing curriculum, new systems to be used, and presentations to be given. The role of the client is simply to buy.
The freelancer is the quintessential solution guru. The freelancer doesn’t analyze or train or coach, s/he just produces something of value. Like the trainer, the freelancer spends much time away from clients. The freelancer’s worth is only as good as the product delivered.
Let’s Play Web Developer (and Look At Each Delivery Method)
Let’s look at how a Web developer, Wanda, would use her skills in each role.
As a coach, Wanda could make money helping DIY entrepreneurs build basic Web sites. She could start by helping them create a realistic goal of what their Web site would look like. Wanda probably has a standard Web site she plans to build. She gives the client easy homework assignments, breaking the process down into one-step tasks. If the student struggles, the coach will help them get over the hump by asking questions to figure out the best approach the client can take to complete the assignments. Once the client reaches the goal (the Web site is built), Wanda will be done with the client unless she has an advanced program to sell.
As a consultant, Wanda could work with a fellow Web developer to build out a certain part of the business. Maybe the Web developer is experiencing some glitches in his code. Wanda can analyze the problem, offer a solution, and implement it for the client.
As a trainer, Wanda could give a five-session course on how to build a Web site. Note that this is very similar to the coach role, but as a trainer, there is little client feedback, and she might not even be present. She might even record the training sessions so people can purchase the training videos and watch on demand. Please note that coaching and training are dovetail companions, as solopreneurs often offer training with their coaching, because coaching without training might not give a client enough knowledge to achieve his/her goal.
As a freelancer, Wanda could work with a startup business to build them a website. The client has little interest in knowing how to build one, but just wants it built. Wanda will be given a budget, images and content, and the basic design concept. Wanda will progress through a series of work development phases from conceptualization to design to coding—all leading to a finished product that is given to the client at the end of the job.
These are all very different businesses. But they all stem from one skill.
Economic Differences (Where’s the Dough?)
You’ll see that for three of the models (consulting, coaching, and freelancing), income begins to flatten out as the business is developed. This is from the natural bottleneck formed by the solopreneur’s limited time to serve clients. Freelancing and coaching income flattens out quickly because it’s is only earned when servicing a client—they can only serve so many clients in a day. Consulting income flattens out a bit, but consultants are able to deal with it better simply because their model allows them to obfuscate where they spend their time (I’ll talk about this below). Training income never flattens out because once a training session is documented, it can serve as residual income (money that is made while you sleep).
The curvatures represent the learning curve. Note that the learning curve is easiest for the freelancer, who can start using his skills now; the hardest learning curve is for the trainer. To be effective when marketing, the trainer should have actual results of what they are advocating. Otherwise, it looks like work with no benefit.
Let’s take each role separately:
Freelancing is competitive because the role is such a natural way to utilize one’s skills. If I went to university to learn how to take pictures and I love to take pictures, I am most likely going to enter into a role where I can, yes, take pictures! Whether you design Web pages or write copy or write code, the path of greatest enjoyment and least resistance is to produce via freelancing rather than use the skill in one of the other capacities, which would require one extra step. That extra step would be knowing what complex problem to specialize in solving (via coaching), setting up a Training system, or building a coaching methodology. (And yes, there is money out there in photography coaching, consulting, and training. )
Coaches are the most constrained by time, because they are being be paid for face time. For them to be successful, they have to steer clients into picking obtainable goals because referrals, testimonials, and goodwill will ultimately come through clients achieving their goals. Coaches can struggle to find clients because of the American culture of (Do-It-Yourselfers)—that is, the feeling that we exhibit weakness by asking someone to coach us through a problem. Coaches’ income flattens out when their schedule is booked; the most successful ones charge high package/hourly fees to mitigate the shortcoming.
Consultants can make a lot of money. If they have standardized a solution to solve a certain problem, they can handle many clients at once, raising their take-home pay. The high upside of consulting is from more lucrative clients and less competition than the uber-saturated freelance market. Additionally, the consultant can obfuscate the time and effort involved in the problem-solving and implementation process, whereby the client can’t value the results on a per-time basis. In other words, the consultant will say she is going to analyze a problem and then implement a solution. The results are so good that the client might assume the consultant has spent 50 hours on it, when in reality, the consultant has only spent a few hours on it simply because she has done similar projects in the past and very little work needed to be done.
Trainers traditionally were tied to time more than any of the other roles because they had to be in a physical room in front of a body of listeners. Well, technology eradicated that requirement. Now trainers write, audio record, and videotape training sessions and distribute them online. While big-name trainers are still filling conference halls at laughably high entrance fees, most trainers make money developing and mass-producing systems to teach DIY people a system so that they may solve their own problem.
Training has become an essential second role for many clifo solopreneurs. One training session can be documented once and sold repeatedly at little to no cost. Why not take past successes and make them anecdotal evidence of how your system works? While training can stand by itself, it is often utilized as an add-on to the other three or simply serving as residual income.
Many clifo solopreneurs use more than one of these, which is probably a good idea, especially if they can take past work and bundle it into passive-income training packages. These packages can be sold in the form of books/e-books, audio learning, and information products. However, it is problematic when you see under “My Services” on the business’s homepage that coaching, consulting, and freelancing are all available. If we prescribe to the notion of differentiation and being a big fish in a small pond, each of these requires a certain level of expertise through standardization. You have to be careful to just list coaching without an in-depth coaching program developed. The same goes with consulting and specifying what problem you specialize in analyzing.
How to Market
The key to marketing is to keep it simple: look at the deliverables and work backwards.
The coach will rely heavily on client testimonials. These testimonials must illustrate two things: 1) how the coach helped the client obtain the desired goal, and 2) the actual process of working with the coach. These are both key competitive differentiators for the coach. A coach needs to show that goals are being met AND the process is what the target audience is looking for (i.e. comforting, challenging, funny, etc.)
The trainer needs to market his pedagogy. In Internet marketing you’ll also see benefits, but BE CAREFUL stating what your training program can deliver as you have no control over how someone will use your knowledge. While it certainly makes it easier to sell benefits (“our course will make you rich” or “your Web site will convert 80% of visitors”) than features (“we’ll teach you how to do X, Y, and Z”), you run the risk of being labeled a fraud if you’re over-promising. This is why you see so many training programs bundled with coaching, so the solopreneur can actually influence the outcome and THEN use a real testimonial to market.
The consultant will market his specialization of solving a certain kind of problem. You want to be sure to indicate what the general problem was and how you solved the problem. While many clients won’t want you revealing their financial information, you can certainly do it in a conceptual way that doesn’t reveal any corporate secrets. If your consulting is to increase performance, you can aggregate all your clients to show how you work has turned pumpkins into Cinderellas.
The freelancer will market the project outcomes (i.e. through a portfolio or list of outcomes you delivered). Your target audience cares less about the people skills and more about how you can produce something they really want.
Which One Should You Specialize In?
There isn’t a clear-cut best option. It ultimately comes down to you, your competition, and your need for income now:
1. Competitive landscape. How are your competitors delivering their service? Is there an alternate way that hasn’t been tried? For instance, if all your competition is battling for freelance scraps, why not give consulting or coaching a try?
2. Your interests, personality, and passion. What do you like the most: To create? To solve? To enable? To teach? Giving your interests the most weight is usually the recommended path.
3. Your financial urgency. Freelancing is the easiest to start, because the other roles require the extra step that goes beyond just utilizing the skill at hand. If you need income now, trying to start a coaching business would be a misguided move. And a profitable training program would be even more difficult to pull off.