How do you find funding for your consulting business? Identify the largest buckets of money under your control and allocate the funds strategically.
A few notes as we get started:
There is math involved. You may need to review portions of this video more than once to make sure you follow the assumptions being made.
This math is for illustrative purposes only. The goal is to help you identify buckets of money that can be used to grow your consulting business. This post includes projections and assumptions in order to paint the picture. Your specific situation will certainly be different in some way.
That said, you want access to money with the least amount of risk. You don't want to risk your retirement account. You want to avoid the debt of a bank loan. You want money you can access and deploy as quickly as possible.
Where Can I Find the Money to Begin?
The basic idea here is that you should be looking for and protecting your lump sums. Where can we find these?
Your income tax refund. For the majority of us, our tax refund is the place where you're going to get a lump sum delivered to you. That's roughly $2800. Proof of that is here on theascent.com, where it tells us the average tax refund in 2018 was $2800, so we're going to use it as a base assumption here.
Your holiday bonus. If we look here, this website has already done the research for us. And if we scroll here, we'll find the number. According to this survey, the average holiday bonus is $858.
So the point here is that you now have $3600 dollars to use to grow your consulting business. Now for some people, that number could be a whole lot more, it could be a whole lot less. But these two places represent lump sums that come to you.
So if you don't have these two opportunities, where else may you find some lump sums? So consider some additional lump sums. Your first or your next client represents a lump sum payment to you. Your sales commissions, whether you're paid quarterly, annually, or weekly. However you get those sales commissions, that represents a lump sum for you.
- If there are people who owe you money, friends, family, businesses, whoever owes you money, call in those debts. Those represent lump sums.
- There is some lump sum cost cutting that you could probably also do. For example, your Christmas spending is a place where you spend a lot of money every year. And the average cost is $942 per person. Again, the research has already been done for us here. Industry experts expect the average American to spend $942 per person on holiday gifts. So what if you cut that number in half? What if you at least put a limit on the amount that you spent per person.
- Cost-cut your birthday. For some people, they celebrate not just the day, not just the week, but the entire month. Well, maybe it's time to dial that back a bit. And again, you can cut that number in half, or you can cut it in quarter if you think about your birthday spending differently.
- You take one less vacation per year. There's research here that says the average vacation costs $1100 for one person to go on vacation. So if you don't take that vacation, that's $1100 that is saved, that can be used to work toward your business.
Maybe you can do all of these. Maybe you can only do some of these. But the point remains the same, is that there are lump sums available to you. And if you think about those lump sums differently, they can be used to fund your business.
We're going to go with the assumption of $3600 because some combination of your tax refund and your holiday bonus can be used to grow your business.
What Can I Fund with this Money?
Let's begin to do some additional math. What does this get you? If you have $3600, what can you do with that money?
Paid Advertising. If you take those $3600, and you use it all on paid advertising, let's assume that you pay $2 per click. These numbers create 1800 clicks. And let's say you send these clicks to a registration page, a lead-capture page, that converts at 20%. So, 20% of the people are going to register at this page, and that creates 360 leads. What could you do in your business with 360 leads? If you called them, emailed them, or interacted with them. If they were on a newsletter list. What could you do with those leads? Does that give you an accelerant inside your business?
Public Speaking Opportunities. What if you used that same dollar amount to sponsor an event in order to speak at the event? And so you become the guest lunch speaker, you become the main keynote speaker, you become a breakout speaker, however that opportunity unfolds. But the point here is that you pay to put yourself in front of your audience of choice. You explain the problem you solve, you outline how you solve it, and you ask if anyone in the room wants it solved for them.
Work with an expert. Let's say you take that same $3600 and you work with an agency, a firm, or a particular expert to develop or execute a specific plan of action. Maybe it's just you and your expertise right now, and there are some things you'd like to do, but you don't know how. Take the money that you have in order to get clarity and certainty on a particular plan of action, and depending on what that plan of action is, maybe you can do it yourself, or you can enlist one of these opportunities to help you do it. But you need a plan of action that you believe in. Sometimes you've got to get some help building that out. Take the money you've gathered and get that plan of action that you actually need.
How to Get Maximum Return on the Money You Spend
All three of those funding concepts had one core thing in common, and please make sure you don't miss this. The reason why you gathered this money and spent it is so that you can get the next client, so you can afford to do it again, and do it again. The better you get at this, the more this number will increase. You'll get an even greater return on your investment. But at a minimum, you make your money back, so you can keep working the process. The reason why you get this money is not just to spend it, but to spend it on business development, on client acquisition, to get the next client to fund the continuous movement of your business. Think of this as the turning of a wheel.
I'm aware there are lots of things that you could spend money on to really feed your ego. Business cards, fancy websites, fancy clothes. But they don't make this wheel happen.
The most important thing to do is to gather the money you currently have access to, and to use it to make the money back as best you possibly can. Now these things always look easy and instant when they're spelled out in a video like this.
But pragmatically, what does it cost you to pull this off, to make this kind of thing work for you?
- It could cost you some time. You may have to wait for your funding to arrive. If your tax refund is the starting place, is the starting funding for your business, you're not funded until the refund arrives
- It could require your patience. You may need to add a couple of different funding sources together. You may have to wait for the first thing to come, then the second thing to come, and then the third thing to come, and then add them together before you can deploy. That's simply a matter of patience.
- It could require some new discipline from you. There may be some things you stop buying in the short-term. You may have to think differently about your birthday, about your vacations, about your Christmas, in order to build the business you're trying to build.
If you want your business to take a certain shape, if you want your business to grow in a certain way, then you've got to think about your business accordingly. And where you get the money from, and how you deploy that money is an important part of the way your business grows.