Michael Meath, 55, started his publicity firm, Strategic Communications, nine years ago as a solo consultancy in Syracuse, New York. The seasoned pro had been vice president of public affairs and business development at Agway Energy Products and was looking for a change. “I realized that if there ever was a time to strike out on my own—from an energy standpoint—that was it,” he said.
Thanks in part to his great professional network, he found himself in hot demand. Meath quickly realized that it made sense to offer some clients retainer contracts instead of working on a project-by-project basis. These clients signed agreements to pay him a certain amount per month over a set period of time.
Going on retainer reduced the time Meath needed to spend finding work and it gave him predictable cash flow, almost like a steady paycheck. “We’re doing our budget for 2013 now, and we already know 70 percent of our income for next year,” he says. Perhaps more important, his clients love the idea, too. Hiring him costs less than bringing on a full-time employee with benefits—especially since he discounts his hourly rates on retainer contracts. Once they sign a contract with him, his customers can budget precisely what it will cost to hire him for the year. Meath now employs six people and has offices in Washington, D.C., and Albany, New York. “It’s a real kick for me to be at a stage of life where I’ve earned all that gray hair—and can use it to do the best of everything I wanted to do,” he says.
Whether you sell a service to businesses, as Meath does, or offer a personal service like life coaching, retainer contracts can be a great way to build a steadier income while offering your clients more value. But many self-employed people and business owners don’t know the best way to set up and market retainer arrangements. Here’s how to use retainer contracts to take your business to the next level.
Make it a no-brainer to put you on retainer. If you work for clients on a project basis for a while and knock it out of the park every time, hiring you on an ongoing basis may occur to them. That’s the ideal scenario. “The best position is one where you’re not doing the chasing—you’re fielding questions on what you can do to help a potential client,” says Meath.
The key is positioning yourself as someone who will make your client’s life easier by delivering excellent service without fail. “When people hire consultants, it’s an emotional decision,” observes Scott Love, 45, founder of The Attorney Search Group in Asheville, North Carolina, which recruits senior partners for Washington, D.C. law firms. An ideal prospect is someone who is suffering, professionally or in his personal life, because he can’t keep up with the demand of work. “Let’s say I am missing my son’s Little League games,” he says. Show how you can stop the pain and it’ll be easier to persuade your client to put you on retainer.