At the beginning of 2019, my consulting business had just taken a major hit— we lost 3 clients in December 2018. Not a great start to the year. So I decided to get guidance from my good friend, Daniel DiPiazza (check out Alpha Mentorship).
Note: As an entrepreneur, don’t be afraid to ask for help, buy courses, join programs, etc. when you need to learn something to grow your business. They often take some financial investment, but when it’s the right next move, the opportunity cost of not getting that help is often far more costly in the long run. Not always, but often.
By the end of 2019, consulting revenue had tripled. Yes, there were things happening on the sales end to make that increase, but without a few really solid operational changes to the day-to-day running of the business, that increase couldn’t have happened.
Here are the 3 most important operational changes that I’d recommend to your consulting business too.
Profit First is a system developed by Mike Michalowicz, detailed in his book, Profit First.
The overarching theme of Profit First, is to set up different bank accounts (buckets) and twice a month, transfer the appropriate amounts of company income to each bucket, based on what percentage you’ve allotted to each.
Basically, it’s a really simple accounting method that makes sure you’re actually putting a percentage of profit away for yourself, since you’re the business owner, and you deserve a little bonus once in a while.
It also ensures that at any moment, you know how much money the business has to spend on an operational cost (like hiring contractors, an office space, a new software or training course, etc.), or anything else. Just like with personal finances, if we don’t have pre-determined budgets in place, it’s easy to assume we have enough to spend on something, when in reality, that money is already spent on an upcoming payment of some kind.
Profit First saved my business because it’s simple, and once it’s set up, it takes almost no time to manage each month.
A knee-jerk reaction for most new consultants, is to sell generic services instead of specific packages and methods. For example, “I’ll do your social media marketing for $X.” This is a recipe for pain, my friend.
When we sell non-specific packages, we get asked to do things outside of our intended scope of work, which means if we have a client on a fixed price monthly retainer, we now open ourselves up to having to do a lot of extra work we weren’t expecting.
For example, an initial conversation with a client that says they need help with their social media marketing, and that it’s mostly just posting on a couple of platforms a few times per week, can quickly turn into extra requests to create graphics, come up with new strategy, post on EVERY social media platform.
And because your contract says you’ll do their social media marketing for $X, you’re stuck working twice as much as what you thought based on that initial conversation. At minimum, it leaves you having to have an awkward conversation with your client, because your contract wasn’t specific enough.
A better approach, is to sell packages that have specific deliverables and scopes, so that if clients ask for things outside of the scope, they either need to pay you more money, or you simply can’t do that work for them.
This approach makes it easier to sell to clients because they know exactly what they’ll get, and it makes it easier for you to know you’re delivering on your promises, and if a discrepancy comes up, you can point back to the agreement.
For example, “I’ll do your social media for you, which includes X amount of posts, X amount of designs, and up to X amount of platforms, for $X each month.”
A great book that taught me this concept is called Built to Sell, by John Warrillow. Learn more / buy the book here >
Each week, have a set day and time that you check in on where things are at with each client, and where revenue is at. Even (and especially) when you’re the only person at your company. Just check in with yourself.
Whether you decide to hire help or stay a one-person consulting company, it’s vital to keep a proper pulse on client progress and your revenue. A weekly internal check-in is an important discipline to start if you don’t already do one.
Those are the 3 operational changes that impacted my consulting business the most. What about you?