The very first challenge you face when running a consulting business is to determine what your niche is.
The way to do that is to identify the problems that your target prospects have, and to become an authority in that niche (i.e. get recognition through marketing activities).
Once you've identified your niche, and the problems that you'll help your clients overcome, you need to define what products & services would be suitable to offer (in order to help your target clients resolve their problems and challenges).
When I started my consulting business I got this all wrong.
Upside down even.
Rather than start by thinking about my clients, I started by thinking about me!
I thought about all the things that I’d consulted in before, and what I was capable of delivering. I came up with a list as follows:
- IT Strategy
- Desktop Strategy
- Applications Strategy
- Service Management Strategy
- Technology Procurement
- ERP Procurement
- CRM Procurement
- Implementation Project Management
- Vendor Management
Not one of them was chosen because of a specific problem that my target clients faced.
It was simply a listing of the things I’d done before, and that I was confident I could do again.
Needless to say, after spending a ton of time and tens of thousands trying to get people interested in me and what I had to offer - as opposed to my gaining awareness as a potential solution provider to their problems - I didn't do very well.
I remained limited to winning work from existing clients and through referrals.
In short, I was relying on luck as my primary approach to winning new business!
What should I have done instead?
Firstly, I should have researched the problems that my target clients were facing. And always remember that a problem can be positive too — such as growth — as well as negative.
Secondly, I should have crafted services that addressed those problems.
Thirdly, I should have targeted my marketing efforts on the problem, not on my services!
A consultancy has to build authority. It has to demonstrate that it understands a problem deeply before it is in a position to offer its services.
Fourthly, I should have defined only one or two services that I could offer in response to the client problems.
Why only 1 or 2 services?
You should limit the number of services that you offer for the following reasons:
- It takes a lot of time and effort to market your capabilities: The more products and services you try to offer, the more fragmented your time will be. Put simply, as a solopreneur, micro or boutique consulting business you simply don't have the time, money or resources to focus on more than one or two services.
- When you deliver your services you typically have a lot of research and learning to do: The more services you offer, the more research and training time you'll need. This further fragments your time. I made this mistake when I first started as I took on work way outside of my comfort zone. Whilst I delivered successfully, I had to go on formal training courses and get certified in order to deliver. That was added expense and time.
- The more you deliver a service, the better you get at it: When you're continually flip flopping between different services, you're likely changing between different clients and market sectors too. This means you have little time to hone your skills and your service. The more you can hone your services, the more efficient you'll become at delivery. And you'll more easily identify elements that can be delegated to junior resources or even outsourced. That means greater profits.
- The more you limit what you do, the more easy it is to describe to people what you do: That's more commonly known as the elevator pitch. Many people start consulting businesses with too broad a market and too vague services. If you can't identify the exact problems that you solve for your ideal clients, then you simply can't market. No matter how much you invest, or how much time you spend, it will all be in vain.
How many services does your consulting business provide?
We run polls to help you understand how your peers are approaching various topics related to running a consulting business. We've got a poll on the number of services that consulting businesses provide. Go take a look and see how you compare.