The consulting market in the United States was worth $73.6 billion in 2019. It’s a large and rapidly growing sector. If you’re in that line of work and looking to expand, you need to make sure you do it the right way.
We’ve collated a selection of handy pointers for how to scale your consulting business. But first, a distinction.
Scaling versus growth
When a business scales, it earns revenue at a quicker pace than costs pile up. For instance, $25,000 of new income comes at a cost of only $2,000.
On the other hand, when a company grows, revenue rises at the same rate as costs. For example, $35,000 in earnings comes at a cost of $35,000 to pay a new member of staff.
We want to help you scale, not just grow. Now that we’ve outlined that difference, read on for the must-know scaling tips we promised.
1. Concentrate on steady sales
To scale, you need to sell consistently. And to achieve that, you need a regular flow of new leads and a stable stream of leads being closed.
Having a regular monthly income from these steady sales allows you to plan ahead. For example, you can set targets for how many leads you need, calculate cost-per-lead (CPL) if you use that form of online marketing, and allocate your budget accordingly.
Being able to generate steady sales also assures you that you’re on the right business track.
To help achieve stable revenues, ensure productivity is maximized. Think about your marketing strategy. Is it time to spend some money on paid advertising? Or could you increase your social media budget? Perhaps you should hire a freelancer to create blog posts and other content for you.
However you choose to market your business, target the right people in order to generate leads, and increase awareness of your brand.
2. Focus your efforts
Concentrate on the marketing channel that’s bringing in the best leads and double down on that. For example, if a referral program generates the most promising leads, invest more in that area.
Don’t go overboard implementing too many products and services, and automate processes where possible. For example, you may be tempted to introduce additional marketing channels, but that can lead to distraction.
It’s also a good idea to identify the best type of clients or projects for your business to focus on. Concentrate on building and strengthening client relationships with your most loyal customers, as well as utilizing project management software to help you execute more projects. Doing these things will help you focus further by tracking leads, conversion rates, and project types.
Not only that, CRM and project management software can also assist a scaling business further. How? The software provides easier access to accurate data that’s essential to streamlining the scaling process.
You can better track things like the amount of deals you’re closing, the number of projects teams can handle at a time, and more. That makes it simpler to identify where greater investment or a change in structure is necessary to support the scaling process.
3. Be certain of your value proposition
It’s important to be sure about what you’re offering and the value you’re going to deliver to clients. That is your value proposition. Identifying it and understanding how to leverage it are key.
To do that, there are a number of steps to consider:
- Establish your clients’ pain points – survey existing clients and lean on your frontline staff to discover the issues prospects most often report.
- Identify the benefits of your product or service – brainstorm and nail down the features that most effectively solve your clients’ pain points.
- Recognize what makes your product or service valuable and connect your value to their pain points.
- Distinguish how your offering is differentiated from your competition – which pain points don’t your rivals recognize and what features or elements do their services lack?
People are paying for your services, and if you’re confident and clear about what you’re offering, you can demand top dollar for it.
Having said that, figuring out rates like consulting charges can be tricky. There are a number of fee structures to mull over. These range from project-based and hourly rates, to performance-related and combination pricing. Whichever you opt for, you need to feel comfortable with the numbers.
Let’s say your clientele pay between $4,000 and $8,000 for your services, depending on the package they choose. If your goal is to increase revenue to $500,000 a year, you know you need to take on 5 to 10 new clients a month.
How to meet their expectations is something that should be at the forefront of your mind as well. If you have a solid foundation and are focused on the value you provide, client satisfaction should follow.
4. Keep a tight grip on your resources
At some point, you’re probably going to need more staff. As revenue grows, there’s a limit to the workload you can shoulder.
Hire more employees and share some of the responsibility. But be sure to take on the right people – find motivated workers who share the company values.
Then, it’s up to you to manage your team and lead them. As headcount increases, think about the best employee management software for your business.
As you hire more staff, CRM and project management software can help you scale by increasing productivity. With increased headcount, time-wasting has the potential to increase. For instance, time can be wasted sharing or looking for information. And unnecessary time is often spent in status update meetings.
CRM and project management technology reduce these time inefficiencies so you can get more output from your staff. Such software solutions can provide a central hub for customer and project information. All your staff can find what they need with ease, and without wasting hours of their workday finding out who has the details they require.
In turn, that means you can handle more clients and projects without having to hire additional employees.
It may be the case that your organization grows so much that you need to introduce (or increase) automation or offload some aspects of the business. Depending on the type of consulting services you offer, contact center outsourcing may be something to consider.
Make a list of everything you currently do. Evaluate each item and highlight what tasks you don’t actually need to do yourself. Which would you be happy to automate or delegate for someone else to carry out? Be honest, and identify the areas you don’t need to be directly involved with.
Then, look for people or software to fulfill these roles. Additional staff don’t necessarily have to be full-time. Think about taking on contractors and freelancers.
Build relationships with individuals with a variety of skills who can help with different facets of your business. Even if you don’t require their services right now, you may find yourself pining for their help at some point in the future.
Then, if you need someone at short notice, you have a pool of people to approach.
5. Don’t be afraid to change your model
You may start running your consulting business according to a certain blueprint. But if that stops working or is hindering you, don’t be scared to switch tactics in order to scale more effectively.
For instance, at first, you may adhere to the consulting firm model. That system has its roots in taking on skilled professionals to carry out certain tasks. You then charge clientele for providing them with that expertise.
The greater number of talented consultants you have on board, the more work you can take on.
But it may be the case that at a certain point in time, the productized model fits your operation better. That relies on bundling the services your business offers into flat-rate service packages.
There, the product itself is your key resource.
Alternatively, a customized model may be the way to go. With that choice, every client has a bespoke solution created for them. There are endless options, and you have total pricing freedom. Or you may even want to focus on larger deal sizes in order to scale your revenue without having to bring in as many new clients.
Each model comes with its own pros and cons. What’s more, you may decide that none of these methods don’t work for you and you need to come up with your own model.
6. Keep an eye on your accounts
To successfully scale, you need to be firmly in control of your money.
Where does your revenue go each month? How are you allocating profits? You need to put a system in place. Think about automating revenue reporting – both time and labor can be saved.
Let’s say you get $750,000,000 in income on a yearly basis. How much goes to paying your staff? Is the excess being funneled into revenue-producing projects? If you’ve invested heavily in migrating to the cloud in quarter one, you may want to ease off on spending in quarter two.
You can only make informed decisions if you’re on top of your accounts.
7. Get a mentor
By seeking advice from experts, you can increase your skill set exponentially.
Learning from someone who has gone through both success and failure can be super helpful. They can give you invaluable advice, from improving efficiency, to ensuring a healthy work environment for your staff.
If you’re serious about scaling your consultancy business, invest in people to coach and guide you. Draw on trusted entrepreneurs’ mistakes and wins.
Let’s back that up with some statistics:
- 93% of small and medium enterprises recognize that mentoring can help them succeed.
- 67% of organizations reported an increase in productivity due to mentoring.
- 70% of Fortune 500 companies have a mentoring program.
To find the right mentor for you, start by defining what you want to get out of your career and business. Who do you admire? Who’s achieved the types of business goals you want to reach? A mentor may be a person from your personal or professional circle, like a former boss, or you may need to do some searching and networking to find the right mentor for you.
8. Stay true to your vision
If you’re going to scale successfully you need to know where you’re headed. Think about your long-term goals and where you see your business in the future.
These targets are designed to look five years ahead. Having that vision helps clarify the purpose of your company and pinpoint what needs to be done to get there.
Don’t let the fear of failure rear its ugly head and get in the way. Although it may not be possible to eliminate the emotion entirely, it mustn’t take over.
Believe in what you’re doing and focus your energy there.
Take Microsoft as an example. Way back in the 1970s, Bill Gates set out a vision for his growing tech firm:
“A computer on every desk and in every home.”
When Gates set out that vision, it would have seemed to many to be unrealistic or over-optimistic. Today, however, we’ve all got computers in our pockets, let alone just our homes and desks!
It’s a lesson in the benefits and rewards that can come from defining a clear vision and sticking to it.
9. Maximize speed and efficiency
To scale as quickly and effectively as possible, make sure that you and your staff are not wasting time. How? Prioritize resources and clients.
Introduce a time tracking tool to note your billable time.
Think about investing in other technologies, too. For example, would a cloud phone system be better for your organization than an on-premises one? How about fax via email? You may think fax has had its day, but it’s still vital in industries like healthcare and finance, where a physical signature on documents remains essential.
Another important key to unlocking scaling potential is to talk to your staff about their bottlenecks—those common problems and time-consuming tasks that drain their productivity. Work with them to streamline or automate processes. That will improve efficiency and help your business scale.
Follow Our 9 Tips to Successfully Scale Your Consulting Business
In summary, develop tactics; then devise a plan and implement them. You’ll come across challenges along the way, but these will be surmountable if you have solid procedures in place.
Understand the difference between scaling and growth, aim for steady sales, and focus your efforts. Be clear and precise in what you’re offering and add to your team when required (but not disproportionately to revenue).
You don’t have to stick to one business model. But, you do need to be on top of your accounts. And remember: having mentors is not a sign of weakness, but a mark of wisdom.
Keep your vision at the forefront and utilize the appropriate technology. That’s where automation software can come into play.
Keep our nine useful tips in mind to ensure that you are doing everything you can to scale your consulting business this year.
About the author:
Elea is the SEO Content Optimization manager for RingCentral, a global UCaaS, VoIP and omnichannel contact center solutions provider. She has more than a decade’s worth of experience in on-page optimization, editorial production, and digital publishing. She spends her free time learning new things.