Service or servitude?

Michael Katz over at It Sure Beats Working wrote a succinct and very astute post last week that brings up something important for all entrepreneurs, especially those who provide professional or consulting services. Having an “anchor client” sounds great until you remember the purpose of an anchor is to weigh an object, meaning YOU, down!

In the communications business, many independents would jump at the chance to have regular, retainer contracts that equate to a regular paycheque – monthly, long term contracts. But putting one’s eggs all in one basket leaves you vulnerable in more than one way. Not only do you risk a major crisis when or if the work suddenly ends – and you have spent no time marketing or bringing in other clients – but more importantly, you have done nothing to advance your skills. You have become pseudo-employee, without the pension plan, sick days or the benefits. You have lost the ability to be competitive. You are the entrepreneurial equivalent of the stereotypical government worker. And worst of all, you have passed the line of providing professional services, and are now in servitude.

I have actually had success working under these arrangements, but have never relied on one. I accept clients based on my own criteria, and what I think the assignment will gain me, financially, professionally and personally. If money and a regular payment ever becomes the driver, it will be a sign for me to Get a Real Job.

The other important thing to remember is if you are going to enter this arrangement as a business model, be sure you either take on enough that you can manage and do the work well, or plan before you need it, to get help. Murphy’s Law is such that the 20 hours of work needed by 5 different clients will all end up mysteriously due in the same week – despite your best efforts!