I believe there is a time when every business consultant should leave a business. The problem is most consultants refuse to recognise it when the time comes. Many consultants get entrenched in a business and are quite happy to cruise along because they need the fees. It doesn’t matter how good or how experienced the business consultant might be, when it’s time to go, it’s time to go. The first red flag is generally when the business owner feels he or she is no longer receiving more value than cost. Frequently the business consultant should be aware of this situation before the client is.
Sometimes it’s the business consultants call on terminating their contract with a client or business. Typically this manifests every time you raise your fees. i.e. You’ll typically lose approximately 15% of your clients. Successful consultants regularly cull the bottom 15% of their client base as part of their growth strategy. This allows the business consultant to reach out and expand the upper levels of their client base. In its simplest format you cannot expect your business to grow if you retain all your paid clients. You will at best plateau and hit the financial tipping point.
Consultants who work on a daily rate or per-diem are generally practicing their trade. Their aim is to maximise short term cash flow. For sure this statement will have consultants across the four corners of the globe cursing under their breath. I have attended business growth seminars where the guru presenter has told the attendees to work out a billable day matrix. I.e. establish how much annual income they require and then divide it to identify your daily billing rate.
After deducting weekends, bank holidays and individual holidays, approximately 220 billable working days remain in an average year. Deduct 30% of these days for marketing, business promotion and other non revenue generating activities. Then assume a 70% booking rate leaving a total of 154 days to generate revenue. Assume an annual salary requirement of £120,000 which dictates a daily charge out rate of just under £800 per day.
Three things generally happen if you adopt this severely flawed concept. First you’re screwed as far as your daily fee can only decline, and your margins erode. Second you’ve inadvertently capped your potential for growth. Third is if you drop a few days you’ll fail to hit your own required annual salary.
In his Million Dollar Consulting book Alan Weiss mentions, “There are substantial risks in the consulting profession as well as substantial rewards. It is ridiculous to assume the former without capitalising on the latter.”
The only exception I apply to this rule is when I provide business consultancy services to clients who have sourced match funding from grant agencies and you have to work to a per diem schedule.
Over the years I have always approached business consultancy from a perspective of helping my clients to become wealthy, irrespective of what type of relationship or system I adopt. My secondary aim is to establish an enduring relationship with my client. Given I am very selective about who I choose to work with, and that some of my clients still utilise my services after 15 years, I guess my philosophy has been successful.
I believe you grow businesses by exploiting strength, not acclimating to weakness. I work hard and have every expectation that I be suitably rewarded for helping my clients to become wealthy. I operate on a project fee basis only and I always base my fees on the client’s perceived value of my business growth contribution. I make it clear from the outset that even though I am talking to the client, it doesn’t mean I will be working with them. If I get the sense that a prospective client doesn’t recognise me as someone who does outstanding work and someone who requires a high investment then I am always prepared to walk away from the business.
Some business consultants are specialists and some are generalists, then there are specialists who have transitioned into generalists. To become a successful business consultant I advise you to differentiate your services, and then try to identify your unique niche and then commence a very focussed marketing campaign. Never be afraid of failure, because in order to grow you have to fail periodically. These failures will pre-programme you to identify opportunities for improvement. I believe that uninterrupted success, by definition pre-programmes you for failure.
Old school consultancy has maintained a predominant focus on ‘reactive’, whereas my ‘Special Forces’ The Art of Business War is ‘extremely proactive’. I train my associates to respond to emerging trends and fads by collating detailed research and business intelligence. In my experience very few consultants approach business proactively.
When you work in extremely high risk security operations in some of the world’s most terrible theatres of operation, you quickly relate to the concept of ‘practice makes perfect.’ I witnessed world class SWAT instructors screaming at their recruits that ‘practice makes perfect.’ On one occasion I was tasked with running a very dynamic live fire SWAT programme at the Ground Zero tactical facility in Alabama, USA. Some 40 different SWAT firearms instructors attended. Their agencies paid for them to be taught personally by Dr. Mark D. Yates how to clear houses dynamically, in order they could then train their own SWAT officers back at their respective departments. Officers in attendance represented numerous different law enforcement agencies like the FBI, Police, DEA, Sherriff’s dept’ , etc, etc.
At great cost the Ground Zero investors had constructed a ballistically lined 360 degree live fire MATCH Modular Armoured Tactical Combat House. Many of the officers attending had never been through a live fire house, especially with a team of unknown officers before. It’s a very hairy experience which is not for fools or the faint hearted. Sadly one of the Sherriff’s SWAT instructors fell into both the fool and the faint hearted camp.
I caught him inflicting his expertise on a group of officers under my tutorage and I listened as he informed his ‘new team mates’ that he was highly skilled and experienced in live shoot house tactics. He finished his lecture by stating that repetition is the key, as practice makes perfect. After glancing at my fellow instructors we knew straight away he was a bluffer and a bullshitter.
We let him lock and load and placed him where he could cause the least damage, i.e. at the head of a six officer snake formation. He paused outside a door and placed his chin on the muzzle of his upturned 9mm, whilst his finger was locked rigid around his trigger. This was without doubt the single most dangerous incident I have ever witnessed on any shooting range in any of the 41 countries I have visited.
I aborted the exercise and brought the team outside for a safety brief. Sherriff Bubba refused to believe what I assured him he had done. I asked him what fate would befall one of his agency recruits if they made such a fundamental error. “Instant dismissal from the agency… but that would never happen because I train them properly and I’m big on practice makes perfect,” he replied arrogantly. One of my instructors led the team into the class room and played a video of the Sherriff’s Faux Pas. I told the class that practice does not make perfect, and that only perfect practice makes perfect. I also told them that I don’t train people, because we train animals and not humans. I prefer to educate people. For some reason Sherriff Bubba slipped away from the programme never to be seen again. Clearly like some business consultants, the time for him to leave was dictated by external forces.
Special Forces know when to arrive and also when to leave. They never overstay their welcome.
- This article may be reprinted without permission, provided it is utilised in its entirety and is not printed in or posted on any illegal or controversial publications.
Contact Dr. Mark D. Yates Business Consultant if you require Business Consultancy
Question about business consulting
How do I break into the field of business consulting ?I just graduated with a bachelors in business admin. I want to work in the business consulting field…preferably strategic consulting.
I've applied to 5 of the leading consulting firms in the U.S., but unfortunately haven't had any responses to my applications. While I have graduated from one of the top 25 business colleges in the nation, I'm beginning to wonder if perhaps I'm being a little overly ambitions to get a consulting job with only an undergrad degree. Here are my questions:
1) Should I head back to school to get an MBA?
2) Would working as just a "pencil pusher" for a year, prior to applying to a consulting job, be a better idea then just shooting for a consulting job right out of school?
3) Any suggestions on a good consulting firm to apply to? (I'm not particularly interested in any one sector at this point in time, but if I had to choose I would have to pick, marketing.)
Any other suggestions or feedback would be more than welcome. Thanks.
Tags: Advertising, business advice, Business Consultancy, online, Small
Thank you for this
Psychology would be a great addition to your studies for this. Remember that Psychology focuses on understanding human behavior, and there's a whole section of Psychology that focuses on businesses (Organizational and Industrial Psychology) in which people study what makes businesses work well, how to motivate people and engage them in companies and organizations, and how to manage change. Given what you've said, this would be a great addition for you. I'm a Psychology Professor and an Executive Coach, so I understand the the role Psychology plays in business development, change, and management very well. You'd be well served by this switch.
Mary
I think depending on your location, there is probably going to be demand for any or all of those. The first 2 are quite easy to get up to speed on, the last one is probably going to be a bit harder. We used a personal travel planner to arrange our honeymoon, and the consultant was born and raised in the area we were visiting, and spent 2 months of each year updating their information by visiting the hotels/lodges to make sure they were still worth recommending etc etc.
Good Luck!
Great video and great instructor…I find this video very valuable.
I work at the number one business consulting firm in the world (im not a consultant) and im telling you its very hard to get into…they only accept people from ivy league college and only people in the top of the class. My suggestion to you would be to go to a smaller firm like Pricewaterhouse cooper and work there for a but then try to go to one of the large firms.
Obviously, consulting business has great worth to earn, especially when, you backed with market experience.
Think on this, Why would a company or small business that needs to cut cost hire a consultant?
You can do business registration, but political consultant is typically not one of the occupations that require a license to operate unlike daycare operators, contractors or cosmetologists
Where are you based? You can go to your local county clerk's office and register your business. File a DBA or doing business as or fictitious name if you will be using a business name other than your given name. You can check with them the requirements needed to start the business.
Once you have your DBA, you can bring your business registration forms to the bank so you can open a business bank account under your business name. The bank will not allow you to open an account if you haven't registered your business.
To get clients for this business, however, you need connections. Lots and lots of networking and schmoozing.
wow! Great action