Three ways to deal with change in client's business

If you are a consultant, freelancer or a small business, chances are, you have a working relationship with people in organizations that pay your invoices. After a couple of years in the partnership, you get comfortable. You start to think, that this relationship will work forever.

And then winds start to blow in other direction. The company gets acquired or it gets new executives on board. It might run into the budget issues. The people you have worked with might get fired. Essentially a large change happens.

As new people get involved, they might want to get quick victories by cutting budgets or they simply have their way how the company should work. They might say: "We only hire local people, no contractors" or "The previous manager hired these people, probably they are no good". Some people start to question the amount of your invoice since they have to deal with huge budget cuts and need to save the money in all possible ways.

This has happened to me on multiple occurrences and I wanted to share three things you might want to do to prepare for these kinds of situations.

One, document every financial decision

If the new manager starts to question your invoice, you have to be prepared to give him full accountability for all the decisions that were made in regards to finances and work you done. You might have signed MSA, NDA, and all other legal documents at the beginning of the project and worked with the client for a couple of years and got comfortable. This is where it get's tricky since you have built a friendship with people in the company and you start to think that you can work out financial and project details with the people involved by word of mouth. That, of course, works until these people leave the company and you are left there to explain to the client why the last invoice is the way it is.

Try to document all the decisions, even if you have a great relationship with people in the company.

Two, be ready for the worst

If you know that this type of tiny revolution will happen, be prepared to worst case scenario. Just be sure that your calendar prospect funnel is full and you won't have any problems sustaining yourself and/or your company. Even if you don't have immediate clients, make sure you have a safety cushion in order to survive. Just don't get paranoid about it, that can be another trap to fall into.

Just be prepared.

Three, switch business model

This might be a good time to reconsider the way you bill your customers. Do you work on prepaid basis? If so, then you are in good position. If not, then plan a gradual switch to this kind of relationship. Make sure the money is off the table.
With new clients, try to offer a 30-day money back guarantee or offer a discount on pre-paid work.

Learn from your mistakes and improve the business.

Post scriptum

At the end of the day, you will need to find customers that you enjoy working with. You don't want to work with someone that will scrutinize every hour of your work. That's unprofessional. But shit happens, so be prepared.