In Part 1 of this two-part series, we examined the first two of five ways to ensure project profitability: having a spine and knowing your cost of doing business. In this second part, we’ll look at three more ways.

3. Understand Your Peter Principle

Someone came to me with a frustrating situation. They weren’t an IT consultant, but they were an ‘independent contractor’ type of worker and they were receiving $500 for their service offering in a small town in Nebraska. They knew – and I knew – that in other parts of the country and especially in larger and more affluent markets – they could receive much more for the package they were offering. But they were in small-town Nebraska and that’s where they were going to stay and that’s where their clients were. And $500 is what they could get. They could alter their offerings, include more or different services in their package, but their research showed that they risked losing business – and that would also come with the risk of decreased profitability. In effect, they had essentially found their ‘Peter Principle’ in terms of what they could get for the type of service they were offering in the location they were offering it in.

That applies to IT consultants as well. We have to understand what the ceiling we’re going to get in terms of rate, or price, or contract. We have to understand our earnings limitations within our main client base and work with those limitations. If we fail to understand all of that, then we risk alienating current and new clients and decreasing our earning potential and profitability.

4. Don’t let the customer change the scope

Scope management is always an issue when managing a customer and a consulting engagement. You document the work as ‘x’ in the estimate and then likely in a signed contract. However, throughout the project the customer may try to insert some other ‘needs’ that he just has to have and he may try to convince you that they are really part of other requirements – assumptions may be what he calls them. Be careful. Don’t let that line in the sand move too much. This goes back to also having a spine. Be ready to discuss these changes that you are perceiving that are coming from the customer. Analyze them carefully and if they are truly outside of the original scope of the agreement, let the customer decide if it’s something they need and are willing to pay for or if it’s something they can do without.

5. Advertise strategically

Practice strategic advertising. Word of mouth works great. Testimonials from satisfied customers posted prominently on your website are great ways to show potential customers that you’ve been busy and you’ve been successful. Write press releases about your offerings and post them to free press release sites on a regular basis. Write articles on the subject matter that you are an expert in post them on your own blog or guest post them somewhere. All of these can be huge boosts to your consulting business and won’t cost you a penny. No cost advertising that actually works = increased profitability.

For more information visit the Entry Software site and signup for an online 30-minute demo with an Entry Software consultant. About the author: Brad Egeland is an IT/PM & Business Strategy consultant and author with over 25 years of software development, management, and project management experience. He can be reached at or you can visit his website at

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