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4 Reasons to Consider Short-Term Client Contracts

by / ⠀Entrepreneurship Finding Customers Startup Advice / December 5, 2013


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, you’ve “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 you’re gone — a true marker of success.

It’s true that the shorter your contracts are, the more you’ll 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, you’ll 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. We’ve 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, we’ve 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 it’s much more powerful to have an objective source praise your work.

4. Diversify Your Revenue Stream

I’m not suggesting you completely do away with long-term contracts. But it’s 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 there’s 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 staff’s 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.

Image Credit: Shutterstock.com

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on Under30CEO.com, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.

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