4 Reasons to Consider Short-Term Client Contracts
Many CEOs of small- or mid-sized businesses view long-term contracts as a sort of arrival. If your young company can acquire a big, long-term client, youve made it. You can relax a little, resting easy now that you have an ongoing source of revenue.
But while longer contracts may give you a (sometimes false) sense of security, short-term contracts offer many benefits that are often overlooked:
1. Demonstrate Your Value
Short-term contracts allow you to cut your teeth and show what sort of value you can offer clients. If your work yields tangible results, these seemingly minor accomplishments can easily lead to bigger projects. Clients can see how well your efforts stick after youre gone a true marker of success.
Its true that the shorter your contracts are, the more youll have. Some people are deterred by the thought of juggling clients, but casting a wider net provides more opportunity than focusing primarily on one or two clients at a time. Instead of developing tunnel vision, youll see the broader picture and find otherwise hidden strategies to offer your clientele.
2. Build Key Relationships
Working with a greater number of individuals gives you the ability to expand your network exponentially. Weve had many clients who left their organizations and hired us when they joined new companies.
Our individual employees develop relationships with people in various industries, which helps them see how to generalize their skillsets and use their abilities to serve different sectors. This makes both our employees and the entire company more valuable to work with.
3. Grow Client Testimonials
As you work with a larger range and number of people, you gain a bigger supply of testimonials. Potential clients want to know about your previous work. By taking on smaller, short-term client engagements and doing quality work, weve built a small army of advocates who are happy to talk to others about their experiences with us. You can pitch all you want, but its much more powerful to have an objective source praise your work.
4. Diversify Your Revenue Stream
Im not suggesting you completely do away with long-term contracts. But its beneficial to diversify your revenue stream. The trick is to be in a position to quickly adjust to changes in the market and mitigate risk.
Having a good mix of smaller and larger contracts prevents you from being overly dependent on a few clients. This strategy creates stability for your employees because theres a lower risk of layoffs when a contract ends. It also provides a diversity of clientele and experience in a much shorter timeframe, allowing smaller companies to scale with more knowledge and experience.
Some business leaders believe that simultaneously managing the competing timelines, needs, and expectations of multiple clients is a small staffs nightmare. While it can be a challenge to support multiple efforts at the same time, the experience gained, relationships built, and opportunities to show your value are worthwhile outcomes for any entrepreneur.
Chris Cancialosi, Ph.D. is Managing Partner and Founder at gothamCulture. The team at gothamCulture focuses on identifying the underlying causes of organizational obstacles and assisting leaders in developing and executing breakthrough strategies to elevate performance. The team provides critical, thought-provoking insights to leaders who desire to use organizational culture and leadership as key drivers of performance.
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