20 tips to run a business without committing suicide

Starting earlier this year, I have been a “professional” IT consultant (libero professionista in Italian.)

In practice I mostly deal with web development and computer repairs. It’s what I’ve been doing for over a decade now, since I was still in school, only now I get to pay my own taxes (yay) and therefore I get angrier when people try to rip me off. So, here’s a collection of tips about running a business I put together based on my experience. Note that I refer to the client as a “he,” but that’s just for simplicity.

  1. Befriend a lawyer. You will need one sooner or later. Most likely sooner.
  2. Assume the client doesn’t have any clue on the details of your job. Listen to his ideas, make a mental note of how you’ll approach the problem in practice, and be ready to explain to him why his “perfect” solution just doesn’t work and needs to be achieved differently.
  3. Use lots of metaphors to explain to the client why you’re doing what you’re doing, and why you’re not doing what he thinks you should be doing. Cars and houses are what people understand the most.
  4. Always require an advance payment to start a job and always require the settlement to deliver it. This protects the client from an unfinished work, and protects you from an unpaid work: if the client doesn’t settle, he loses the advance and doesn’t get the job delivered.
  5. Approved and signed quotes are fine for small jobs, but for anything more complex, a full written contract is best. Be shielded from requests that were never discussed in the first place.
  6. Don’t be afraid of writing long contracts. Rather, make sure you cover everything in clear terms. And use a big font. Contracts in small fonts are scary to most people.
  7. Assume all clients are going to try and rip you off: give little trust to strangers, trust friends even less, and just avoid relatives altogether.
  8. If a client asks for a discount, especially if it’s the first time they come to you, deny it and remind them that discounts are a (rare) privilege, not a right.
  9. Do not give discounts on the first job upon the promise that a client will come back to you, because they most likely won’t. Rather, have him pay full price on the first job and promise a discount on the next one.
  10. If some problem arises during the execution of the job, let the client know immediately, even if it’s something trivial. They will appreciate the openness and it’s a good long-term marketing strategy. By the same token, give the client as many details about the work as he needs, but no more. Too much information yields the opposite effect and confuses him.
  11. Do not plan your financial life around prospective clients. Until a quote or a contract is signed, there is no client.
  12. Realize that most clients do not check e-mail regularly or that they are unable to use it properly. You will be in touch with your clients over the telephone.
  13. Take note of the timeline of a job, ie. how long the client takes to do his part (send you materials, issue the payments, etc.) This will let you profile the client so that you can subsequently offer discounts or raise the price accordingly.
  14. Set a base price for the job, and always give a higher quote. Even if the client accepts it as it is, it leaves you room to reduce it and make a good impression on him. Again, this is good long-term marketing strategy. Moreover, learning the fine art of haggling allows you to anticipate your client’s moves and counter them.
  15. If your area has geographical stereotypes about work ethics, be prepared to see them reversed.
  16. Round prices so that they are more client-friendly when including tax, but always think before-tax for your own planning.
  17. Use legalese only when things get rough and you are getting ready to call your lawyer into the game.
  18. If possible, send printed invoices by mail after signing them. This is often pointless, but gives you the chance to add a bunch of business cards that your client can give around if they’re satisfied.
  19. Use a secondary phone number for work and give it around whenever you have the chance.  The more people have it, the more potential clients have it. And you can always turn it off if you need a break.
  20. Accept the fact that dealing with clients is like going to war. It’s bloody, messy, time-consuming, frustrating, psychologically impairing and even when you win, you wonder whether it wouldn’t have been a better idea to buy some land and grow carrots and potatoes instead. And in most cases, it would have been a great idea indeed.