How to Start A Consulting Business
A member of the community, Nick, reached out and asked a couple of questions about how to start a consulting business. Specifically he wanted to use assessments as part of his onboarding process for new clients. Well, a couple of emails later we found ourselves in one heck of a conversation and I thought it was valuable enough to share with you publicly.
Much respect to Nick for allowing me to share his experience with the rest of the community. You can watch the video below and read our conversation. You can also download this post and read it later if you like. See below.
How it all started...
And then it got real...
(I arranged the remaining emails into one thread to help you follow the conversation. Nick's comments are in regular font. My comments are bolded black.)
Nick: I like your sample flow stemming from an ad and leading to the questionnaire. Smart to always focus on the benefit (what they get) instead of your service (what you do).
Does most of your consulting business come from running ads? Do you get clients by proactively searching for websites and companies who could use your help with their strategy and marketing and then approach them through e-mail?
If you're up for it I'd love to share some ideas with you on the forms/assessments that get the best results the quickest -
Alzay: Of all my tested methods, ...the fastest way to drive new consulting leads is paid advertising. ...the highest quality leads come from my blog (and other content marketing efforts).
Yes, I still use cold email approaches to get clients. Like anything else, you keep testing and tweaking until you find the best mix. I will tell you that my major focus for 2015 is to create more high quality content and use that to generate more leads.
Sure, I'd love to look at your forms/assessments. Is there a link or web page where I can see them? -
Nick: Yeah content marketing seems to be the best way to not only attract new clients, but to build trust and move them down the sales pipeline all at the same time!
Alzay: I'm here to tell ya, a thoughtful content marketing strategy beats the pants off any hot and fresh "tactic of the day"!
Nick: I work full time as a Golf Professional is SW Florida at a private Country Club where I make a good salary, enjoy golfing beautiful courses year-round, and live a good lifestyle. This is not enough for me as a career, however.
I am not intellectually challenged and growing and making a difference. I've been reading constantly on many subjects but primarily on business, marketing, sales, influence, and web analytics.
Alzay: I get the situation of making a good salary and still not being challenged. The brain needs exercise too!
Nick: My aim is, through contingency based consulting, to help solo-preneurs and online small businesses take the under-performing elements of their sales and marketing process and leverage them for greater results. My main challenge right now is how do I sell myself to a potential client? I want to sell them, without fixing them.
Alzay: I understand your approach "find under-performing elements of sales and marketing and improve it". That part is simple enough to digest.
How do you sell yourself to a client? That has some sub-elements. Let's continue.
Nick: The assessment is detailed and comprehensive and if they go through it all the way, will they just start picking out the weak pieces and doing it themselves? Should I send them the assessment after they are signed on as a client? Before an exploratory call?
Alzay: As I said in the earlier email, there are a number of ways to deliver the actual assessment. I've given you what I believe to be the most straightforward approach. Still, there are a couple of things "behind" your question that need to be called out.
Ugly truth = no one is going to willfully submit themselves to a comprehensive assessment. You (your business) has to provide a context for "why"...before you introduce it.
Nick: Makes sense. And the best way to provide a context for "why" is when they discover me through my content on my website.
Alzay: More truth = very few people are going to complete the assessment, realize their own shortcomings, and then fix it themselves. Do any of your golf clients do that now? Exactly.
People are stuck because they are stuck. If they could have figured out themselves they would have.
Nick: GREAT insight. People are stuck because they're stuck. It is not likely they will take the assessment and fix everything themselves. I can banish that limiting thought.
Alzay: How do you sell yourself to a client? That has some sub-elements. Let's continue.
Nick: Or is consulting more about the systematic execution rather than just knowing what to do.
Alzay: Bingo! In the end, the value of your consulting is not you telling them what to do (or them knowing what to do). The value of the consulting is helping them create an excellent result over and over.
You are not selling "advice" or "know how". You are selling a solution to a problem.
Nick: That's a crucial paradigm shift. Not selling "advice" or "know how", but selling a solution to a problem. Wow! How would you best describe the problem that your consulting solves.
Alzay: Thank you for asking. My complete answer has a couple of parts.
A) First of all, my company has a Brand Ambition: Permanently elevate the training standard for how to build a consulting practice. We transform intelligent, technically oriented, stalled leaders of consulting firms into insightful, inspired, business architects. We help you translate your expertise into an experience your clients can consume.
B) That "transformation" has three main steps: 1 - Create clearer messaging 2 - Build a repeatable marketing funnel 3 - Simplify the management structure
C) Every piece of content I create fits under one of these three categories. For example all of my content marketing and productized service related posts fit under my "marketing" category
Nick: The assessment is attached below. Please keep in mind that this is a working copy. It has some formatting issues and some incompletes on it. Feel free to take and to use what you find valuable. If there are things missing or pieces you'd like to add, please do so, just in another font color.
Alzay: I appreciate you sharing this assessment with me. I have some quick feedback = it's too comprehensive. Do you have the capacity to help them with every element of their business? Do you really want to do all that?
Nick: I agree, way too through. I am not an expert in every area on the assessment, but if they are lacking I could certainly get them going in the right direction.
I adapted the questionnaire from the legendary Jay Abraham and made it relevant to business online in 2015. His assessment IS that long. But for him, it works. I'm not Jay Abraham.
Alzay: It's so much easier to manage and explain your business if you focus on a specific area.
- Improve your sales and marketing results with mobile marketing
- Improve your sales and marketing results with business blogging
- Improve your sales and marketing results with email marketing
- Improve your sales and marketing results with marketing automation
Nick: Great point. I feel that as a consultant you may not be the absolute expert in all of these topics, but you should have some knowledge in all of them. And if you see a client needs help in a certain area, you can focus on learning what you need to in order to deliver it to them. Agree or disagree?
Alzay: Disagree. The primary question is "what kind of consultant are YOU"? Your answer to that question greatly determines what you should know about and what you shouldn't.
Yes, you can argue that you should have some knowledge of "this and that" but those are excuses that keep you from being excellent at anything. There is so much more value in specializing. Clients are so much more excited to know that your business fits them perfectly.
Accept the challenge of being awesome over the desire to be knowledgeable.
If a client asks you to do something that isn't in your expertise tell them where they can go get it! You just gave them valuable advice and earned more trust. (Don't you hate it when you go to the car mechanic and they tell you "sure we can fix it" when it isn't really their specialty? They end up making mistakes, it takes longer, and you have respected them more if they had just referred you to another vendor)
This is where the "transformational productized service" is extremely important
Nick: Good article here. Obvious distinction once you understand, but I really needed to read this to get it. I'm not going to do a "marketing audit" with my fancy "assessment". Instead I'm going to find the "best opportunities for immediate growth".
Alzay: Good, you've just taken a step toward specializing.
Nick: I also read this article on your website and really enjoyed it. I hadn't thought about "productizing" my service. From my viewpoint I see each client as needing a different blend of specific services and my offering is not laser focused like your product launch consulting is. I'd like to be more comprehensive in scope and not limit myself to such a niche. Do you think this is a mistake?
Alzay: YES, a business damaging...money wasting mistake.
Why? In addition to everything I said above, let's visualize for a moment. Imagine having 10 clients... Now imagine each of those 10 clients receiving a different service from you (new product launch, past client reactivation, text marketing campaign, direct mail campaign, etc)
- How many staff members would you need?
- How many different assessments do you need to have?
- How would you set milestones and checkpoints on the projects
- If a client was going to send you a referral, what would they say?
Now imagine each of those 10 clients receiving the same service from you (Facebook page redesign)
- How many staff members would you need?
- How many different assessments do you need to have?
- How would you set milestones and checkpoints on the projects -if a client was going to send you a referral, what would they say?
My point is: focusing on a productized service doesn't require nearly the same infrastructure. Fewer moving pieces makes it easier to achieve mastery (excellence). It also increases your speed to conquer other productized services as the business grows.
Nick: Do you think its necessary to laser focus on solving one specific problem for businesses and present it as productized package? And then laser focus on a second problem for businesses and market that as a separate productized package?
That is great from a funnel and marketing perspective, but as a consultant I think you are leaving a lot on the table because you are helping the business with only once area. They already trust you enough to do business with you. Why not help them maximize and optimize and grow in ALL the ways you can. Agree? Disagree?
Alzay: Quick...what is your favorite restaurant? ... What is your favorite menu item at that restaurant?
... So, as far you are concerned, they can eliminate 80% of their menu and you will still keep coming back. Is that right?
The same applies to your business. Take the time to develop a specialty dish. Your revenue will come from what you do "best" not from what you do "also".
Nick: I think that both the most fair and lucrative way to charge is on a contingency basis. "For every dollar of profit I help you make by doing X,Y, and Z, all I ask is that you give me back 25 cents. " What are your thoughts on a fee structure like that? Or a structure of a flat rate, $xxx per day or per week? -
Alzay: Contingency or revenue sharing is one way to do it.For anyone starting out, I advice against it. I strongly recommend you develop a consulting offer that looks like this:
Starting Point --> Step A --> Step B --> Step C --> Step D --> etc --> Ending Point. The cost if your offer is $X,000.
Easy to explain (and sell). Easy to understand (and buy). Easy to execute (and master).
Can you offer more complex services? Yes, of course. But they don't give out any awards because you chose to make things more complex.
In short I am saying:
A) focus on one core service, get known for it, build from there
B) build a funnel around that core service and include the assessment as suggested
C) focus the assessment to make it less intimidating and more directed toward your specific service
This is insightful and the best advice you can hardly get easily. I plan to run a consulting business and right now I am changing the direction and focusing on one unique solution
This is VERY valuable especially at my stage in the process! Thanks!
thanks bro liked it
This was excellent and will require re-reading so I can grasp it all.
I’m interested to read/watch/listen to as much information as you have.
Your ideas are spot on, clear out the nice to haves and focus all resources on getting the clients paying before you give away the golden goose.
Thank you so much for sharing this content with us.
Thanks for sharing this good information.
You are welcome Pamela. Thank for you for taking the time to read and comment!
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Mr. Calhoun I am considering starting a consulting business and I would like to contact you for a follow up. Please email me back on the best way to do that.
This is amazing. I am a young adult in South Africa, based in a very small rural village. I have recently registered a Consultant company. Just like Nick, I had intended to offer a wide spread of consulting services to small businesses and individuals. This has given a great insight. I would appreciate to build a mentorship relationship with you Mr. Calhoun. I hold a Bachelor of Laws degree, and I have practiced as an attorney for three years. I must confess, I am still on the very low stages of the business and also struggling to raise enough Capital to register an office.
Nhlosenhl, if you are in the very beginning stages it’s best if you follow the free resources here on the blog and YouTube channel. Do the best you can to build some basic systems. Good luck!
This is very helpful for me as a consultant starting out in digital transformation. There is so many umbrella that I want to be under, because I am scared of losing out potential clients. However, what matters more is that I deliver 100% to these clients based on my niche.
Also helps with the paradigm shift about how we are not selling advice, but are selling a solution to their problems.
I really love this and it was insightful.
I would love to hear more from you sir