2 year Old consulting company – Financial struggle depleting my creativity and sanity

I am a little over 2 years into a workforce solutions consulting company.  I just started getting traction with clients over the past 6 months; two clients with a collaborator that is very difficult to work with, opportunistic and condescending,  but I need the cash for my business; the cash bought me about 4 months of runway.  I have a couple proposals out with

I have a couple proposals out with other Fortune 100/500 clients, one with another collaborator I like working with, and these deals are worth $500k.  I have been working my ass off for 2 years, sold my house, depleted my savings and 401K and have about 2 months runway left.  My friends and family are worried for me, I had a business coach suggest three times

I have been working my ass off for 2 years, sold my house, depleted my savings and 401K and have about 2 months of runway left.  My friends and family are worried for me, I had a business coach suggest three times I go back to Corp. America (I was a V.P.)   But my gut tells me to hang in there; and I am getting some solid industry credibility (speaking engagements, Bloomberg, been published, etc.).  But I am constantly in a state of barely covering my bills and for the first time will be late with my rent payment (will ask if I can pay half now and half end of month).

I am basically completely broke and the stress is impacting me. Nothing left to sell. The thought of going back to Corp. America puts me in a state of depression.  Can I just sell my way out of this and hustle like I mean it?

  • Get a cofounder with a sizable quote ownership who can share some emotional load and also help with the work – assuming yo don’t have one.

    See if your clients would pay some money upfront. 50k now and they get discount on the 500k price. This willl also avoid any surprises in case the client is not serious , which happens all the time. If client is serious you can be creative in pricing. Whatever the dept head can approve without talking to accounting , he can pay in advance.

  • It kind of sounds like you took what you were doing as a job, and are trying to do that as a business.

    This approach has some pro’s but you’re experiencing the con’s of this approach right now.

    You may be stuck in offering products that, in your old job, you would have approved purchase of.

    Offer a product with lower price tag to smaller companies. Something that you would buy while you’ve been going through this financial turmoil. Maybe not this month, because you’re only going to cover basic necessities this month, but close to it.

    Startups are the fastest growing business segment. Corporations are much flatter in terms of growth, and that means less likely to try new things and take on new expenses.

    I have found that $400/mo is the most startups have as disposable income or purchase decisions they can make autonomously, without having to bring in another stakeholder to make the decision, and hence elongate your sales cycle.

    $500k deals are generally 1-3 year sales cycles.

    If you offer something in the <$1500 price range, payable in a few installments, or <$400/mo the sales cycles will be much smaller than what you are up against.

    Above all, don’t lose faith that you will adapt.

  • If you’re feeling that going back to Corp as a W2 will be the worst thing for you, acknowledge that feeling and respect it. Most don’t have the grit for this, so of course they will be worried about you. They would have folded by now, or never tried.

    But it’s important to take care of yourself. I agree that a partner can do wonders in sharing the emotional strain and the sales pressure. It’s gotta be someone with good contacts or amazing sales chops. 50% of a small, growing business is good and 100% of a failed business is still zero. Be prepared to share ownership and control.

    Or find some short term subcontract work with a friendly larger competitor, one that focuses on a different angle and then complement their offerings with your special touch. That might get you some cash to close the gap, give you time to close your own longer term deals.

    Don’t internalize any of this. Just set goals, measure objectively and make decisions based on that. We all go through tight times.

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