This is now the 5th post on launching a consulting business. If this is your first viewing of the topic area, and you are interested in it, you are encouraged to “jump back” to the introductory post (by clicking here) to ensure you get the most from this series…
Onward and upward – Define Your Competition…
To be clear, my intent for suggesting you define the competition is not to indicate that you should EVER “worry” about them. The objective here is to identify how, when and where you can – EAT THEIR LUNCH!
In fact, the observations shared below have been witnessed through-out my career as a corporate employee, inspiring me to launch my own business. And, it serves to demonstrate just how easy it can be to succeed!
Before we discuss that (the eating of lunch) you’ll want to answer a few questions:
- Who else is doing it (providing services similar to mine)?
- What geographic areas, industries and/or companies do they seem to target?
- What is their approach?
- What makes them great?
- What gaps do they leave open?
- What do they charge to do what they do?
Since you have significant experience “in your space” you should be able to name at least a few firms presently delivering services similar to that which you plan to offer. And, you know the keywords and phrases that you can use on the Internet to search, identify others and perform research.
Now, let’s have some lunch by covering the typical realities that I have found in the “consulting space” which can be exploited for success by a freelance consultant or small / boutique firm…
In summary, the “easily identifiable / larger” consulting firms typically freak-out their prospects and customers as a result of one or more of the following factors:
- Baiting and switching (where’d James Bond go?)
- High fees and/or longer-term engagement objectives (when will they leave?)
- Reusable powerpoint deck (deja vu – didn’t I see this presentation at my last company?)
Let’s now expand upon each of the above.
Baiting and Switching
Let’s face it, the first person that a consulting firm is going to bring in to discuss the opportunity (or problem to be solved) will be the highly polished “sales guy.” S/he “may” also have significant experience in the area(s) being discussed. However, this person will typically NOT be the one delivering the services under discussion. While they may be able to get the prospect all worked up into a lather about how great their firm is, the end-result will often be that junior resources are engaged, some of which will still be “cutting their teeth” in the field.
My approach: I let the client know, up front, that “they get what they see.” That is, I’m not only the “front man” to close the deal, but I’m also the “delivery guy.” And, the only reasons I engage others on my behalf would be if/when:
- I need an assist (to work with me) to help carry the load (the project is bigger than one person)
- Additional skill-set(s) are required that I don’t have
- Over time, we are able to engage another person on my team to continue delivering services at a lower rate (than mine) – if, and only if, all parties agree
High Fees and/or Longer-term Engagement Objectives
Larger consulting firms have overhead they need to “cover”, not the least of which includes:
- Payroll for “administrative” / non-billable employees as well as those that are “on the bench” waiting for their next engagement
- Facility expenses
- Etc., etc…
These simply do NOT “need” to apply to a freelance consultant (or boutique firm). We’ll talk about our business structure later…
In a nutshell, this overhead results in consulting firms having a key objective of keeping as many people busy, for the longest period of time possible. Too often, this occurs even when it may not be in the best interest of the client.
I’ve personally witnessed, on numerous occasions, the “larger” consulting firms kicking the door open (of their prospect / customer) and bringing in an army of people who don’t seem to ever leave. That is, their contract / engagement structure is such that they just seem to hang around generating reams of paper with no real / long-term value.
To be clear, having a long-running engagement is fantastic, when we are TRULY delivering value to the client; accomplishing objectives that they would not otherwise be able to accomplish. However, there is a time when we (the consultants) must GO AWAY!
For example, I will let the client know when:
- They have crossed the line and are now paying me to do something that they could do themselves with their staff (for less).
- A project they have engaged me on is NOT going to bring them the anticipated result or has a significant risk of languishing due to pervasive/foundational issues.
Given the structure and key objectives of the “larger” consulting firms, they will too often (consciously or unconsciously) end-up milking the client for all they can.
Instead, once we know the typical fee and engagement structure we can simply charge less, effectively set expectations and this, along with the other things being discussed, is key to our competitive advantage. And, this is a primary reason why my practice has thrived over the years: by receiving repeat calls from my contacts as they migrate from company A to B to Z…
Reusable Powerpoint Deck
A key approach that we (consultants) often take to engage with a client is performing an audit or assessment of a particular area, function, department, business process, etc. The goal: determine for the client what they are doing right, their opportunities for improvement and providing a road-map to get them where they need to be.
An interesting question I’ve been asked by new prospects, while discussing the assessment opportunity, is: “So, have you already prepared the powerpoint deck that will serve as our “read-out” resulting from this assessment?”
While this may be a kind of “tongue and cheek” question, it is clear that these prospects have too frequently received a read-out, from an audit/assessment, that they have felt could have applied to ANY company. But, they had paid a fee to have a consulting firm come in, go through the motions, taking time away from their “day job” when all the consulting firm seemed to have done was change a few logos on the powerpoint deck and then present the read-out.
While it is effective to have a repeatable engagement structure and reusable templates, each client / company has its own nuances which MUST be clearly reflected in the audit / assessment results. Doing so ensures the client truly experiences the value of the engagement.
To be fair, there are many reputable consulting firms that deliver high-quality services. And, there is a time and place for engaging a larger consulting firm, including larger-scale projects requiring:
- Numerous resources with specialized skills
- Global reach to accomplish a number of objectives or perform a number of activities simultaneously
Let the larger consulting firms have these engagements. And, clearly let your clients / prospects know when it is time to consider engaging them (vs. you). And, like me, you may find yourself managing large-scale engagements, on behalf of our clients, which happen to leverage other consulting firms 🙂
I have found that the pie is big enough for those with SIGNIFICANT expertise in problem solving / solution delivery and finesse in dealing with people. If that is the case with you, and you consider the “typical ways” of the larger firms (as outlined above), you need not pay ANY attention to the “competition”, as there really is none to be concerned about!