Building a consulting business can be confusing. This led me to try to find a simple framework that I could use to build a viable consulting business. I have been doing a lot of research on this topic, and below is what I have been able to gather. Much of the content comes from David A. Fields - possibly THE authoritative figure in building a solo or boutique consultancy - but I have also incorporated concepts from other business coaches and consulting experts that I have discovered throughout my research.
Below is a simple 5-step framework for building a viable solo consulting business.
1. Vision: Assess your long-term goal
2. Product Strategy: Define your service offering
3. Sales & Marketing: Win clients
4. Customer Experience: Deliver value to clients
5. Admin: Build Infrastructure to be more productive
Let me share a bit more about each of these steps.
1. Vision: Assess your long-term goal
Before you start anything, you need to have a clear understanding of your current state relative to your ultimate goal in life. Building your own consulting business is not easy, and you need to be sure that building this business aligns with your life goals.
An effective tool that I have used is called "The Wheel of Life." This tool helps you figure out your goals in different parts of your life such as family, finance, business etc., and assesses where you are right now. Then, you figure out what you need to do to bring your current state in each of these parts of your life close to the end state. There are many free tools out there to do this exercise including here and here.
Your consulting business can be one of the sections for which you want to achieve success. It is important to assess where you want your business to fit in with your other life goals. One framework that is helpful for determining your consulting business goal is this 3 types of consulting business framework:
The 1st type is "Freelancer," where you are delivering value to your clients, but someone else is winning the clients. If you are primarily subcontracting or using any of the project sites like Catalant, BTG, or Upwork - you are in this category (We recently created a list of the top 5 project sites here). There is nothing wrong with this category, but there is certainly limitation here - the main one being that there is a cap to how much you can make in this situation.
The 2nd type is "Solo consultant," where you are delivering value to your clients AND winning clients. There is definitely a higher growth upside in this model. Another benefit is that your income can be a bit more predictable, that is if you figure out a consistent way to win clients.
The 3rd type is "Boutique consultancy," where your main role is to win clients, but other people will deliver value to your clients instead. Growth upside is highest here.
There is no best category. Each has its pros and cons. You just need to know where you want to be. Note that the rest of the items in this document will be most relevant to those who want to build a Solo or Boutique consultancy.
2. Product Strategy: Define your service offering
If there is one thing that all entrepreneur gurus agree on - Seth Godin, Sam Ovens, Michael Zipursky and countless others - it is that to build a viable business in this day and age, you MUST focus on a niche market. You can't be a generalist and be able to win business nowadays, because there are just too many options. Unless you have clear messaging on being able to help specific customers with specific problems, the message will not resonate with that specific customer, and it will be very difficult to build a sustainable business.
However, you can't just build any niche. You have to build a business around specific problems that specific customers are willing to pay money to solve. In fact, whether you can actually do that job is not nearly as important. If there is demand for which you don't have skills, you can always learn it. However, if there is no demand for which you have skills, then there is nothing you can do; you can't manufacture demand that does not exist.
Defining a service offering that has a demand for which you can deliver, and has the potential to make money is probably the most important thing a consultant needs to do. It often takes time to define this clearly. However, consultants should not feel like they should have a perfect offering before going out in the market. You need to start with an offering - like a hypothesis, if you will - and you need to constantly test it in the market, and tweak it as you go. There is no reason why you can't apply a Lean Startup concept (if you are familiar with it) to your consulting business and iterate it continuously just like you would with any startup business.
3. Sales & Marketing: Win clients
Winning clients can be one of the most dreaded pursuits for consultants, especially if they do not have direct sales or marketing experience. However, like with anything, with practice and experience, anyone can become proficient at it.
There are many components to increasing ones sales and marketing capability, and I will write a longer write-up on this in the near-future. But at a high-level, the key to sales and marketing for building a consulting business is to network and build meaningful relationships with key decision makers and influencers, without being "salesy." Consulting is a relationship business after all, and it is difficult to build a relationship where you are constantly trying to sell something. With that in mind, some exercises that a consultant might find useful are:
- Networking one-on-one
- Attending networking groups or trade associations
- Attending conferences
- Speaking
- Writing blogs
- Publishing a book
- Creating a website
- Engaging in Social Media
- Sending out newsletters
- ...and much more
4. Customer Experience: Deliver value to clients
Most consultants feel comfortable in this space and feel that they do a good job at it. However, there is always room for improvement such that your clients can become repeat customers or become a good source of referrals. It requires setting proper expectations, conducting kick-off communications, and producing high quality work that doesn't kill yourself in its execution. I will do a longer write-up on this at some point as well.
5. Admin: Build infrastructure to be more productive
I attended David A Field's Solo Accelerator Workshop this past weekend, and I had the biggest "A-ha" moment learning how to build my infrastructure to be the most efficient and productive. As a solo-preneur, time is literally money. The more time you spend on tasks that other people or systems can do, the less money you are making. These days, there are so many tools out there that do much of this busy work for you. Even if there is no such tool, it is possible that it can be very inexpensive to hire someone to do the job.
The first step in building your infrastructure is to identify all your daily tasks and to try to see if you can automate it or delegate it to someone else. You will be surprised how many items can be delegated. It can be simple tasks like reading emails, which takes a ton of time, and it's usually something someone else can do for you. I plan on hiring a virtual assistant as well as a house keeper very, very soon!
Building infrastructure is also about building your support team, which may include some or all of the following and more:
Project Swingman: This is someone who can hire you as a subcontractor. If you are on your path to become a solo or boutique consultant, you may be thinking, "Why would I want to be a subcontractor?" Well, it takes time to build a proper consultancy, and subcontracting can pay the bills. David suggests not spending more than 40~60% of your time doing subcontracting though, and instead spend the rest of your time trying to win your own clients or delivering value to the clients you already have.
Capacity Swingman: This is someone you can hire as a subcontractor. If you win a client, but are too busy with other work, you can rely on this person to do the work for you instead.
Administrator: This can be your virtual assistant or someone who can do much of the admin work for you, so you can focus on things that only you can do in the company.
Mentor: Someone once told me the following (which made a lot of sense to me), "Even Michael Jordan had a coach and it is not because he didn't know how to play basketball." 'nuff said!
Accountability Partner: Building a business is a lonely journey, especially if you're a solo-preneur. And the biggest benefit of running your own business (freedom!) can also be a curse. We all can use a bit of a kick-in-the butt or a cheerleader who holds us accountable and supports us at the same time. I'm glad I have this with my fellow CoSolo members.
Others: There are countless others like accountants, bookkeepers, etc.
I hope this post was helpful, but please let me know what you think! Do you have another framework that you use? Did I miss anything important? Thanks for reading!