In conversations with independent consultants, the topic that gets a lot of airtime is how to build a sustainable consulting business?
For me it begs the question, what do you mean by sustainable?
It came up again yesterday when I was having coffee with a consultant and he was explaining his business, how he had started, where he was at and where he wanted to be in the future — that he wanted it to be sustainable.
How do you define sustainability?
So I asked, what do you mean by sustainable? This is where the responses vary. It could be consistent cash flow (monthly), number of client facing days per year, new clients, business growth, scaling business, annual revenue, moving from front of room to strategic advisor, just to name a few. To me, it’s about being very clear what sustainable means to you. Google “sustainable business”, and it’s all about businesses that are in for the long haul.
What’s your long term plan?
From my own experience and conversations with consultants, one of the most common challenges I hear is the capacity to market your offering and deliver it at the same time. And therein lies the dilemma, because trying to do both (effectively) means that neither your marketing nor client delivery gets 100% of your attention.
Planning and launching marketing activities to build a pipeline of clients — things like webinars, events, social media campaigns, attending networking sessions — all require time, energy and money, and take you away from being in front of the client and generating revenue. Successful sales means new clients need to know about you in order to engage you.
It’s the old chicken or the egg story–so what to do?
I work with some consultants who “luck out” — they’re constantly busy — and work lands in their lap without having to market themselves (including without a website, as an effective LinkedIn profile seems to do the trick). Inbound referrals means they can focus on delivery. They operate from gig to gig, project to project, with no real planning, and uncertain of what’s on the horizon in 6 months time. They are what I call “present time” consultants, appreciative of the work, happy with earning what comes their way, and avoiding the reality of their impending future and wondering what to do when this gig finishes. What happens when the market changes, when clients no longer have the big budget to spend on large initiatives? It’s inevitable that the party will finish at some point.
Other consultants are highly strategic, and have mapped out their marketing strategy 12-18 months in advance, knowing the gestation period of a project from an idea to full rollout, and how they manage their cash flow with targeted revenues. They diversify their skill set, and move beyond coaching and facilitating to developing a product. They have a future mindset with a present day focus.
An interesting observation is hearing the frustration of what I call “Groundhog Day” consultants (remember the movie, where the same day played out over and over again?). These consultants have been successful in business for the last 5, 10, 15 years but they’ve repeated the same 12 month business strategy 5, 10, 15 times in a row and their client base, number of training days and revenue has significantly reduced over time. The question is how are they adapting to a changing marketplace (or not, clearly), and have they reviewed and updated their value proposition?
Is there a secret to sustainability?
When consultants tell me they want a sustainable business, they are in search of the Holy Grail, a way to leverage and grow their business, where they can focus on doing the work they love, so that they have greater certainty about their pipeline and revenue, which in turn lets them plan (business, family, lifestyle) and ultimately sleep like a baby at night. That would be relevant for any business, right?
When they ask the sustainability question, what I’m really hearing is the concern that if they keep doing what they’ve been doing, they’ll become the hamster on the treadmill, fearful that their service offering will become redundant in a saturated marketplace of consultants. Which comes back to the question, what is their long-term plan and how are they working towards achieving that outcome?
Sometimes it is useful to take a page out of the consulting manual you use with your clients. Taking a moment to pause, reflect and look at and work on vs. being in your own business. Continue to re-evaluate your value proposition and keep asking how you are adapting your business in a changing environment.
How to adapt and be sustainable? That is the question.
So coming back to my recent coffee conversation, when I asked what his long term plan was, his response was to grow his business beyond needing to be the person at the front of the room. He had enjoyed the transition from being employed to independently securing consulting work, and sharing his expertise with clients in leadership development. His contribution has been well appreciated and when he paused to look at his business further down his timeline, the idea of doing the same thing over the next 2-3 years did not inspire him. He needed a strategy that shifted him from being stuck as a service provider, so that his offering is highly relevant, scalable (i.e., he didn’t need to be in front of his clients 100% of the time), and demonstrates value and ROI for his clients.
So what does having a sustainable consulting business mean? It’s not the what, but more the how–the regular process of stopping, reflecting, and planning is key — conversation and collaboration. How can you have greater certainty in an uncertain environment? Essentially, it’s having a long-term plan and the flexibility to adapt your business model to a changing marketplace.