It’s not what you know!
When most consulting businesses are started, it's usually not by people who are experts in starting and running businesses. Usually, it's people who are expert consultants - only, the employed kind - or it's people who've built up a specific expertise and believe their fortunes will be better served if they go and sell directly to clients as a consultancy.
Regardless of origin, what most fledgling consulting business lack is the knowledge to start, run and grow a successful consulting business.
In this article, I'll touch upon the four simple things that every consulting business must do to operate and survive. For a more in-depth explanation, download the free Consulting Business Blueprint.
Size Matters
One way in which consulting businesses are different to many others is that they’re often kept small, deliberately so.
The pursuit of continuous growth in order to increase company value is the obsession of listed companies and SaaS startups. The boutique consultancy, on the other-hand, doesn’t always have the same growth aspirations.
The reasons to remain small can include:
- Delivering a high-profit, niche service that simply doesn’t have a large enough market to warrant scaling.
- Seeing being small as your biggest asset - able to deploy a focused, agile micro-team.
- Being a lifestyle business - achieving a desired amount of profit and being quite happy with that.
Of course, there are also many consulting businesses that are built with scaling in mind. Sometimes from the off, other times they come to realise this desire later on.
My good friend and business partner (in a different business), Professor Joe O'Mahoney, has written a great book on consulting business growth (see the link). It details the results of a study of over 70 consulting business owners who achieved a sale of their business.
What to focus on?
The beauty of a consulting business is that there are only really four things that you need to do. These are:
- Attract prospects (aka Marketing)
- Convert prospects into clients (aka Sales)
- Deliver engagements
- Administer the business and its engagements
To create greater understanding, I've put these core areas of activity - and their sub-activities - into a model that I call The Consulting Compass.
Here’s what it looks like:
Where to start?
A consulting business starts by defining the Problems & Opportunities that your ideal clients are facing. Then you can define the Products & Services that you will offer to help clients overcome their challenges.
At inception, most consulting businesses do this the wrong way around! The come up with an idea for a service, then go seeking clients and client challenges that their service can help with.
That is not a smart way to go about things!
Once you know the challenges that you help people with - exactly who those people are and what you'll aim to sell to them - you can then start to promote your services. This is what the Marketing Hub on this website will help you with.
What next?
Rather than walk you round the entire compass here, use the form below to download your free copy of the Consulting Business Blueprint, which uses the Consulting Compass as its foundation.
Complete the form below to grab your copy of:
The Consulting Business Blueprint
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