The Challenges Faced By Small Consulting Practices – Part 2.
Last week, I introduced some of the challenges faced by solo-consultants and small consulting firms and provided some recommendations about how consultants may address them. Last week’s post introduced the first 6 challenges consultants must deal with, and this week’s post discusses the next 6 challenges. The full list of challenges is replicated below:
- Maximize retainers
- Pre-screening/client selection
- Content development
- Freebies and pushing out the free line
- Marketing automation and funnels
- Automating key functions
- Outsourcing non-essential tasks and activities/delegating
- Creating a value-delivered model as opposed to a billable time model
- Moving beyond one-on-one services and embracing one-to many services
- Creating passive revenue streams
- Writing books/courses/video Programs
- Keynote Speaking
- Systemizing what you know and licensing it to other consultants to deliver
- Referral programs
- Collaborate with others
- Continuous learning
- Life/work balance
Outsourcing Non-essential Tasks and Activities/Delegating
If you are the sole consultant in your own business, you not only market your services and deliver them, you may also have to do all the administration relating to your business. Spending your time doing book-keeping, invoicing, website development or maintenance, SEO, writing letters/proposals/reports does not generate revenue for your business and it most certainly will not be the best use of your time. You may decide to bring in secretarial help to reduce the burden.
However, have you ever considered outsourcing a lot of these activities? You can hire an online personal assistant for a modest hourly rate. You can get developers and SEO specialists in India, Russia and the Philippines to do your web work for a fraction of the cost of doing it yourself or bringing in a permanent hire into your office. If you can retain your focus on the moneymaking activities and outsource everything of an administrative nature, then you can make a much higher financial return on your own time.
Creating a Value-delivered Model As Opposed to a Billable Time Model
Let’s face it. When you sell your time by the hour or by the day, your typical client does not focus on the value you deliver. All he is interested in doing is nickel and diming you to get the lowest rate he can. Anyway, it’s a risky business for you, particularly when clients are frequently looking for fixed price guarantees and you have no way to work out exactly how long it is going to take to deliver on the promise. Inevitably, you end up putting in more time than you expected and this drags down your average daily or hourly rate.
The only way to move away from this battle about your time, and the cost of it, is to offer a value-delivered price that is not dependent on your time. In reaching your price, you will of course estimate your time, but your main focus should be on the return on investment you can deliver for the client. If he is investing in a $5 million project and you are going to manage it for him from beginning to end, then a fee of say 10% of the project cost is not unreasonable, particularly if the metrics say that the business will save a couple of million dollars every year once the project is completed. A successful project will more than justify your fee.
Moving Beyond One-on-one Services and Embracing One-to-many Services
A fair proportion of the work that some consultants do is often in the coaching area, where CEO’s and senior executives are guided through up-skilling programs. If your clients are predominantly small and medium businesses or solo-preneurs, it may make sense to deliver your content and advice to groups, rather than in one-to-one sessions.
As a leader of a Mastermind group of entrepreneurs or SME business owners, you can cost effectively deliver value at an affordable price by bringing a group of eager learners together in one venue at the same time. There is an added advantage for participants in that they will also learn from interacting with each other.
No matter how much we would like to get paid for all of the time we spend creating value for clients and potential clients, we still need to spend some time in the edutainment arena. Let’s call it an investment in our businesses. We don’t get paid for it initially, but there is a strong upside potential in that engaged followers may become clients or purchase some of our programs.
I have talked about the value of blogging in last week’s article. Another variation on this theme is to produce a regular newsletter for followers, wherein you deliver valuable content in a series of articles in a single publication.
If you want to increase engagement and lift your game to a new level, you can provide training and business advice in a webinar environment. With the evolution of this media and the introduction of new players such as WebinarJam, it is quite affordable and there are no limits on the number of participants you can engage with all at the same time. For a review of this product click here
Creating Passive Revenue Streams
As consultants, we spend our lifetimes learning and the learning process never stops for many of us. It can be pretty straightforward to package our knowledge into blocks of useful “how to” knowledge that can be made available to our followers. The easiest way to do this is in the form of eBooks, which can be published on our own websites, marketed on Amazon, or promoted through affiliate partners.
We can also record our webinars and package our presentations for rebroadcasting for a fee. Again, affiliate marketing will give us market reach for these high value programs.
Writing Books/Courses/Video Programs
It is a small next step to write a hardcopy book and to self-publish. Convincing a publisher to take your work and get it into retail stores is a little bit more difficult but it is still doable. Many consultants like to teach as part of what they do, and it is a logical next step to deliver business courses and video courses, which can easily be delivered in an automated fashion online using tools like Kajabi. This all feeds into the passive income model discussed in the previous section.
Next week we will be looking at the final 6 initiatives in some detail so please come back to learn how they can help transform your consulting practice.