Updated: May 31, 2020
A guest blog by Ben Lempert originally share on ClickTime Blog
Browse the internets, and you’ll find a ton of advice on how to start your own consulting firm. Site after site will tell you how easy it is to go it alone, leave your job, and fulfill your dreams.
This isn’t one of those posts.
Why not? Well, what many of these “advice” sites don’t say is this: getting the first few clients is the easy part. The hard part is figuring out what to do when you’re a little further down the road. When you already have a few clients, and are trying to actually grow your business. When you already have employees, and want to make sure you can continue to pay them. When you’ve already hit up all of your personal connections, and are looking to become an actual consulting brand.
If that’s where your consulting firm is (or if you imagine yourself there one day), this post is for you. It’s about how to run a consulting firm successfully, not just how to start one.
One post, of course, can’t pretend to give you all the advice you need to run a business. But we can focus on a few things that will help you grow your business.
Increase Your Level of Expertise
You got into consulting because you identified the niche: the expertise you have that businesses need (and will pay for).
How do you keep your consulting business viable? Simple: become more of an expert.
Businesses hire consultants to solve problems they can’t solve on their own. What does this mean for you? The more problems you can solve for the people hiring your firm, the more valuable you become.
You’ve already got some knowledge. Now it’s your turn to drill deep. Learn every single thing there is to know about your field. Figure out all the scenarios in which your firm’s knowledge could apply, and generate ideas about what you’d do in them. Keep up with trends, software, tools, and new regulations.
Successful consulting firms are those who can tell businesses, “don’t worry – we’ve got this for you. All of it.”
Get External Validation for Your Consulting Work — and Showcase It
We all know you do good work; it’s what’s gotten you to this point. Now it’s time to angle for bigger fish. And to land them, you’ll need shinier bait.
What kind of bait? Third-party validation.
It’s the sad truth that no matter how path-breaking a company might be, most businesses are, by nature, conservative. Meaning: businesses like people to be vetted by other businesses. It’s a little like high school: sometimes the appearance of popularity is all it takes to actually be popular.
Your job is to appear popular.
There are lots of ways to do this. You can write up case studies and display them on your website. (Or, even better, get the businesses who hire you to display them on their site!). You can and should pursue awards in your industry. You can get backing from regulatory bodies, or earn certification that other consulting firms don’t have.
The thing to remember is that while these awards and case studies all reflect work you’ve already done, the point of displaying them is to attract future work. Think of them as rungs on a ladder: you need them in place to climb higher.
So get that validation, and make sure everybody sees it!
Successful Consultants Optimize Billing and Forecasting
If you’re like most consulting firms, you’re doing two kinds of work at the same time: you’re doing the actual work you were hired to do, and you’re doing the work of looking for more work.
The key to running a successful consulting firm is balancing these activities. That means knowing – as clearly as possible – how much work you can do, and what price you can do it for. You already know what happens if you don’t get this right: take on too much work and you can’t deliver. Take on too little and you won’t be able to pay your employees. (Because you see your employees as your most valuable resource, right?)
The next few notes can help you find that balance.
Track and Manage the Time You Spend Consulting
Whether your consulting firm employs hundreds of people, or just one, tracking and managing employee time is crucial to running it successfully. Knowing how much work you’re able to accomplish is the only way to project forward with any accuracy.
If your firm bills by the hour, you’re likely tracking employee time already. But even if you bill by the project, you want to have a good estimation of your work capacity.
In fact, one way to generate a “back of the envelope” project rate is to estimate the number of work hours a project will take you, then multiply that number by the (rough) amount you pay employees. It’s easy if you know how many hours a project will take.