Optical Consulting

1
Optical Consulting

• Joe Shiefman
• 02/06/04
• Shiefman ConsultingTel 520-760-8858Email
  info_at_shiefman.com
• www.shiefman.com
• Presented to Optical System Engr II class
• At the Optical Sciences Center

2
Standard consulting procedure

• There are no standard rules for consulting
• Different styles work for different consultants
• We are all just guessing
• So pick your own style, examine your results
  frequently, and adapt
• I will mostly address the situation of the
  individual consultant
• I will present my perspective

3
Outline

• Introduce Joe
• Job description of consultant
• Large consulting firm versus individual
• Plusses and minuses
• Who should do this who shouldnt
• How to promote and market yourself
• Initial contact
• Proposal writing
• NDAs, consulting agreements, other nuisances
• Tips

4
Job description

• 1st contact to discuss customer needs, your
  services, advice
• Ranges from phone call to formal sales
  meeting/presentation
• Be prepared - obtain upfront info and be ready to
  suggest solutions
• Let customer start
• If large job give customer ROM (giggle test)
• Write proposal and send to customer (often
  iterative)
• Receive PO and start work (may do some work prior
  to PO or even prior to proposal)
• Complete work and issue report
• Respond to customer questions about results
• Individual consultant performs many other tasks
• Sales and marketing
• Administrative
• Hardware maintenance
• Everything else you can think of and more

5
Large consulting firm versus individual

• Easier to start consulting for a large firm
• Build experience, credentials, and contacts
• Can be mentored in optics and consulting business
• Successful large firms need good rainmaker
• Often larger firms combine software sale and
  consulting
• Individual is working without a net
• cant bounce ideas off another engineer before
  presenting to customer
• No backup if sick
• More subject to statistics of small numbers
• Cant smooth out work load across consulting
  group
• Individual has complete control and problems

6
Pluses and minuses (relative to other jobs)

• Control over everything
• Shorter commute
• More challenge
• Probably more variety

• Riskier (i.e. more stress)
• Must get your own projects
• Cover own benefits
• Cover business expenses
• Downtime - pay, stress
• Probably longer hours
• Probably more travel
• Cant discuss results
• No backup

7
Who should become a consultant

• Need experience, credentials, and connections
• Should like business
• Skills must match market (a changing market)
• Helps to have a large extended commitment
• from a good customer to start
• Need a financial reserve to start
• Need to like people, socializing, and
  presentations
• Must be willing to spend time promoting and
  selling yourself
• Must like multi-tasking
• Must handle risk, rejection, down cycles, etc.
• Need family support

8
Promoting and marketing

• First establish a business model - specialties,
  customer type, goals, etc.
• Articles and presentations provide publicity and
  credibility
• Choice of journals and conferences depends on
  type of consulting
• Networking with others in optics
• Website
• Ads tradeshows better for larger firms
• Establish relationships with larger consulting
  firms
• Establish relationships with hardware
  consultants8

9
Initial contact

• The initial contact is important
• Ranges from informal to formal presentation
• Be prepared
• Obtain as much up front info as possible about
  customer and project
• Study information in detail and research optical
  issues
• Research customer, field, system type, people,
  etc.
• Prequalify costly or time consuming sales
  meetings
• Prepare questions to ask - needs?, budget?,
  deadline?, are other consultants proposing? Why
  they are using approach or component?
• Always ask in a nonjudgmental way, ask important
  questions first
• Prepare potential suggestions or solution types
• If multiple people on your side, set roles and
  assignments in advance

10
Initial contact (2)

• Let customer go 1st - have him describe his
  company, people, needs, goals, etc. (LISTEN !!)
• Dont raise issues that you are uncertain of -
  these can always be address later.
• Sales steps (mostly from Kaye book)
• Project a confident image (not arrogant)
• gain rapport - research learn clients language,
  his business, operation, dress style, try to
  connect on a personal level, you want to get to
  know each other you want them to like you
  vice versa, use dialogue to establish points of
  common concerns and interests. But be genuine and
  dont overdo avoid topics such as politics,
  sex, and religion

11
Initial contact (3)

• establish the customers need - keep your eye on
  him and your thoughts on his problems
• show how you can satisfy the need,
• elicit objections and concerns,
• lead (dont push) to agreement on action

12
Proposal writing

• Title
• Introduction and/or background
• Background
• SOW - spell out each task in detail
• Customer supplied inputs
• Deliverables
• Travel - when, who covers cost, etc.
• Cost and payment terms - time and materials or
  fixed price - (see pricing strategy)
• Schedule

13
NDAs, consulting agreements, etc.

• Messy - not clear how to fairly protect both
  sides
• Less is better - avoid altogether if possible
• Ethical versus legal constraints
• Be careful what you sign
• Stay close to typical form
• Avoid vague or very general restrictions
• Propose your own version
• Avoid types like employee agreements
• Sign non-competes only if you get adequate reward

14
Pricing strategy

• Dont underprice
• need to cover expenses, overhead time, and
  downtime
• establishing your expertise is more important
• Too small a rate can raise suspicion
• Dont overprice
• Be in line with equivalent consultants
• Price for slow business cycles
• Be flexible
• 1st job with this customer
• desirability of work
• Are you busy?
• Be creative - can vary form of compensation

15
Tips

• Find a niche - establish skill set gain
  credibility
• Dont extend too far from areas of expertise -
  recommend another consultant when appropriate
• Start looking for new work while still busy
• Listen to customer - let him describe his
  business and his needs
• You define methodology
• Your success is your customers success
• Try to find fill-in jobs - writing papers is good
  fill-in
• Run ROM by customer before writing big proposals
• Keep price low enough to be competitive in slow
  times
• Read - Inside the Technical Consulting Business,
  Harvey Kaye