With layoffs and downsizing becoming more and more frequent in todays job market an increasing number of people are parlaying their experience and know-how into a small consulting practice. Consulting can be a wonderful and fulfilling field but to be successful you have to be much more than a well-paid business advisor.

In part 1 we covered how to set up, market, and qualify leads for your consulting business. In part 2 we will cover how to write proposals, contracts, and build better relations with your clients.

Once youve met with a prospect, identified problems, and convinced the prospect that you have something to offer, you will try to sell him or her specific solutions. Your solutions should be presented in a proposal that, if the client accepts it, forms the basis of the contract. Knowing how to write a good proposal is one of the most important things a consultant must know to succeed. Poorly written or poorly organized proposals will destroy any chance for a contract.

While every proposal is different, all proposals should contain certain key things:

* Background and definition of the problem. Review what caused the client to call on you, and what specific problems your work will solve.

* Scope of the assignment you propose. Explain what you are going to do to solve the problem. Its more important here to also pinpoint what you will not be doing. Dont leave the boundaries of what you intend to do fuzzy or the client will never be satisfied with your work.

* How will you be doing it. Give details on how youll conduct the assignment. You should include specific information but still keep it general so that the client understands it cant be done without you. Also include how and how often you will be reporting to the client on the progress of the project.

* Deliverables. List what you will be producing during the course of the assignment (plans, seminars, programs, designs, etc.) Also specify who will retain ownership of what you produce (for example, whether the client can conduct seminars based on the program you conceived during the project).

* Fees and costs. Make an estimate of how much the client can expect to pay, broken down into fees and reimbursable expenses. For example, Fees are estimated not to exceed $25,000, and reimbursable expenses are estimated at $4,000.

* Resources needed. These include on-site desk and computer equipment, access to materials, and specific personnel resources and the roles the people are to play.

* Schedule. Pinpoint when the project starts and when you expect the assignment to be completed if started on time.

Use graphics and illustrations in your proposal because they help to convey a lot more information. Dont stop your marketing efforts after youve submitted the proposal. Follow up with calls, letters, and e-mails to be sure the proposal has been received, and ask prospects if they need more information. Dont hesitate to check periodically on the progress of the proposal evaluation.

One of the most important questions a consultant can ask is, How much should I charge? Fees compensate your time, effort, and know how. But they must also cover your overhead, expenses, benefits, and time spent on marketing between assignments.

The fee structure you choose depends on the project. If you can estimate accurately how much time you are going to spend, then you can ask for a fixed price plus expenses. If the time you will spend on the project is unpredictable or variable, then bill by the hour to ensure that you are paid for your time.

Never start a project without getting a signed approval from the client. There is too much money, too much time at stake, and too many details to cover. Never base the agreement on a handshake, no matter how friendly you are with the client.

A contract can take on one of three forms. One option is to include a letter of agreement in the proposal for the client to sign. It should clearly indicate that the signature signals approval for the contract. You can also have a separate contract, preapproved by your lawyer, for the client to sign. Or, in some cases, clients will draw up their own contract. Its very important in this situation to let your lawyer review the agreement.

Here are some important points that should be included in every contract:

* Payment and billing terms. Specify how frequently and how much you will be paid. In slow economic times, payments tend to be delayed, so you may want to indicate an interest charge on payments delayed over thirty days.

* Scope of work. As in the proposal, be careful what you promise to do for the client. If the limits of the project are too broad or fuzzy, you could be responsible for years of follow-up work at no fee.

* Duration. Some projects, especially if you are dealing with the public sector, can be delayed suddenly, even in the midst of your assignment. By specifying a duration in the contract, you protect yourself from unforeseen delays and stoppages of fees. But you are also reassuring clients that they will see results in a reasonable time frame.

* Guarantees. Be careful about what you guarantee in terms of project results. Guarantee only that which you have control. Dont guarantee increases in productivity even if youre working on a productivity-improvement assignment. There are too many other factors over which you have no control.

* Ownership. In the contract, even more than in a proposal, it is important to specify who owns materials you develop during the assignment. For example, will training materials you develop in conjunction with a training project be owned exclusively by the client, or can they be used by you for future training assignments.

* Nondisclosure. A nondisclosure clause is essential. It should prohibit disclosure of both your own and the clients proprietary data, technology, and strategies.

The overriding goal of a consulting project is, of course, to satisfy your client by doing the best job possible. However, this is not always as easy as it sounds. Internal conflicts in the client organizations, or conflicts between you and the client, can lead to a contentious, and ultimately unsatisfying relationship. Never underestimate the importance, and potential difficulty, of maintaining a good relationship with your client.

You should always treat your clients with respect. Never talk down to a client or make him or her appear stupid or unknowledgeable. And never get into personal conflicts with clients or employees of client organizations. Otherwise, it is unlikely you will be considered for future projects.

As a consultant, your will become privy to inside information about the organizations that hire you. Your clients expect you to keep that information to yourself. If clients hear you giving details about other clients, theyll assume that you will be as loose-lipped with their own information.

Sometimes, you are going to have to take sides as part of a project. But, if possible avoid taking sides in internal conflicts. To be effective and respected as a consultant, you must remain objective at all times.

As a consultant, you will often be considered by employees of client organizations as a hired hand brought in by management to do harm. For example, employees may think you were hired to help downsize the organization. There will be times when you might face outright hostility and perhaps sabotage. Be prepared to deal with those problems by, for example, specifying in the contract that success is contingent on employee cooperation.

As a consultant you will wear many hats, business advisor, salesman, administrator, and production manager. You will have to learn to wear all these hats with ease. But being an independent consultant will allow you to have a career that gives you freedom, excitement, fulfillment, and money. But most of all being an independent consultant allow you to use your expertise to reach out and help many people to succeed and fulfill their own dreams.

It is the ultimate win-win situation.

Copyright 2005 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.