7 Strategies To Grow Your Consultancy Business
Success brings its own challenges ...
Posted by Jacky Sherman on 07/10/2022 @ 8:00AM
The biggest challenge when running a single-handed consultancy is what do you do when you hit your ceiling? It’s what you’ve been aiming for ... a full order book. There just isn’t space to take on any more clients ...
When it comes to strategies to grow, how do you decide which way to go?
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Yet, you know that the danger is if you start saying no to prospects or referral sources they will start drifting away. You also know that growing further means bringing other people into the business and if you're not careful, you'll end up on the treadmill again.
"You worked so hard to get off it in the first place!"
This month, I thought I'd share with you 7 strategies to consider when you're getting too busy. In pulling these together I have focused on examples drawn from the experience of my clients and others in my network. Their solutions allow some space for you to do what you want which is to be hands-on delivering your expertise directly to the client.
The first three strategies keep you firmly in that role of delivering the service whilst the other four increasingly shift your emphasis to being the business leader and your service delivery being reserved for your favourite clients.
Status Quo - You could always just continue with what you are doing now as it's obviously working.
All you need to add in is a process for managing your waiting list in a manner that keeps both prospects and their referral sources engaged until you have space to fit them in.
Plus a personal development plan that stops you from getting complacent and keeps you aware of the research and trends in your speciality and in consulting and business generally. We all know a great many single-handed businesses that manage for many years in this way.
Improving efficiency - You may have a sneaky feel that you're not really at full capacity.
First, take a look at your numbers. Are you busy not getting paid? Are you making a profit? How much profit do you need to make to have the lifestyle you want and with a financial contingency plan for the unexpected, like a pandemic or a war? Was a holiday factored in? Ok, this first section may not free up time to see more clients, but it would free up finances to pay for other solutions.
Regular comparison of your prices against your competitors may show you're undercharging. One therapy client of mine was really nervous about raising her prices, but bit the bullet and tried out a strategy of raising her prices by £5 per hour for new clients until two prospects said "no!" based on price. She found her comfort level at a sustainable increase from £50 to £70 per hour.
Another marketing colleague at a networking meeting recently admitted how difficult it was to calculate the correct time and subsequently charges for creative work that might take anything from just an hour to complete, or more than a day.
Bang goes another weekend whilst they catch up. Had she considered quoting for the longer period with a financial adjustment for the client and space in her diary if it took less time,
Secondly, personal inefficiencies may be eating into your billable time. Whether you're charging by the hour, by the outcome, or via a retainer the chances are if you're not disciplined about your working hours you are in danger of wasting much of it. After all, you're the boss now, so you can go and get your haircut in the afternoon, or let the informal meeting with someone from your network run for two hours, or can you?
Lastly, are you managing the time your client eats up above and beyond what you contracted for? Do read my blog post on how to manage toxic clients. These are the clients who always want a discount, are late in paying and cause you endless hassle that can eat up huge chunks of your time. One recent client was contracted for 6 hours a week for a firm and then found herself drawn into other aspects of the business, meaning she was on the phone for a considerable proportion of the week. By being more assertive and pushing back on the person concerned she reasserted her contract and freed up her time.
Outsource business processes - This is often the first place consultants offload time from their diaries.
Recently another member of my network presented his reasoning. As a solicitor, he charges a pretty high rate for his time. Then when coming out of practice to work independently he found himself needing to take out time for all the back office business processes from invoicing, chasing debt, marketing, compliance etc, very little of which needed his skills, but did need expertise that others had. By outsourcing these services he could contract out these tasks to appropriately skilled people for fewer hours than he was taking to do the work and, let's face it, at a lower hourly rate. The added bonus is he gets more time to enjoy what he is trained to do, which is solving his clients' tricky legal issues.
However, this is not always as simple as it seemed. Another networking colleague admitted that she struggled to let others undertake work in her business as, in her words, "I'm a bit of a control freak". She prided herself on delivering first-class service to her clients and was concerned about the standard dropping with outsourcing. This leads to an often used phrase when bringing in someone new that it's 'quicker to do it yourself' than to sort out someone else's muddle.
Above all, the strategies are about releasing time or money through low-risk solutions to the existing business model. The consultant remains the sole employee with the technical skills to serve their clients.
The next 4 strategies make a more radical change to a different business model for the consultant whilst still delivering some of the service delegates this to others.
Collaborate - There are a range of different ways to do this.
My blog post in August gave one way of approaching this through developing a Hub firm whereas you develop strong referral relationships with complementary service providers and share the workload and fees according to who did what for the client.
You may collaborate with a competitor to cover off holiday and sickness cover, working together on larger projects or when there's a short-term overload. The model can either be a white label when they work under your brand or as a straight referral. Larger consultancy firms frequently work with associates who are freelancers who deliver for you usually using your methods and programmes.
I can't stress enough the need to apply great care in choosing who to collaborate with and set up formal contracts that cover intellectual property, client ownership, methodology and compliance with your policies are equally applicable here as in the next section employing technical staff.
Employ technical staff - This is a subject for a whole separate blog.
This is a big move because potentially it can easily put you back on your treadmill. Even though you keep some client delivery for yourself you are now turning into a business leader rather than a technical specialist. The pressure all too easily transfers from delivery, back to the need to bring additional clients and to cover salaries and additional costs such as authorised absences and training. Cash flow which you have been able to largely ignore with your success comes back with a vengeance.
I have too many examples of when things can go wrong at this stage to detail here. It pays to invest in your own leadership skills and buys in good HR support before making this move.
Licence your business model - Many consultants have experience of working within a franchise.
Many consultants have experience of working within a franchise or using material under license from others. Here though we are talking about being on the other side. Turning your service into a product and recruiting others to sell and deliver it for you under some form of licence agreement.
This may be a simple licence agreement to deliver your programmes and Intellectual Copyright in their own business for a fee and some form of attribution that you are the source of the material. Alternatively, it may be a fully franchised operation where you train, support and monitor your franchisees to deliver your full business and technical model to their clients using your branding and back office systems for a royalty fee usually based on a percentage of fees received.
Potentially this can mean there is no limit to the number of people delivering your services and you can continue to deliver them yourself. The main tension here is getting a good balance in the allocation of your time between being the owner of a business that is franchised out and still delivering the product yourself. In my experience, very few such business people remain directly working with clients.
Setting up a franchised business is a major undertaking and you need to be sure that taking on the role of business leader is right for you.
A nice example is an HR company I know well. The owner franchised her highly successful business and then found whilst she continued to enjoy working with clients and even managing her own support team she didn't enjoy managing the more complex relationships with the independent business owners who were her franchisees.
Automate your service - This feels a little like a mini dot.com bubble to me.
The concept is that the whole consultancy can become DIY (do it yourself) with the expertise from the consultant being accessed through a learning platform set up online.
The number of clients that can be recruited and helped in this way can be limitless and the consultant doesn't even have to manage the marketing or IT Systems as this can be largely outsourced.
Their role becomes one of the designer and author of the programmes delivered in this way. Their role in marketing is purely to promote and give credibility to users accessing their material.
Several consultants I know are pursuing this type of venture. Many have set up variations on the 30-day challenge scenario. This steps their client through a short (usually15 minute) highly specific learning exercise followed by a to-do activity every day for 30-days, followed by a result in a specific outcome.
The other approach I've seen locally is more ambitious and sets out to teach the clients the skills of the copywriter. However, some direct intervention is involved and personal one-to-one support is available. I await with interest to see how this evolves.
Although online learning platforms have been around for many years the rise in the use of the internet in response to the Pandemic lockdown has acted as a spur for many companies and their teams to gain confidence in the use of such programmes. It is perhaps the area with the most opportunity for innovation for the solo consultant as well as the biggest threat. I suspect we might be some way off seeing this as the total solution to the over-busy expert consultant.
However, consultants should expect their role with their clients to become much more one of distance learning facilitation and managing the business partners who manage the technology behind it.
So, how do you decide which way to go?
When you look at the reality of how different solo consultants have developed their business, the boundaries between these categories are frequently blurred and adapted to suit the consultant and the product and services they are offering. You probably found yourself doing that as you were reading through the list.
Which approach is right for you will depend mainly on your ambitions for your business and yourself long term, and your willingness to put in the hard graft and take the risks to get there. It's worth devising a checklist of the key things that you would definitely not want to have to happen as well as those which are your key drivers, usually your values, and whether they can be honoured in your chosen strategy.
My own consultancy is still very much face-to-face and my approach is personal to you. If you need help in deciding which way to go And would like to explore that with me then give me a call.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the right strategies to grow your consultancy, it may be a great idea to give me a call on 07970 638857. Let's have an initial chat over a coffee and see how I can help you.
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