Be Brave Not Safe

Now that you have defined your value proposition (what others can expect to achieve by engaging you) it is time to define your target market.

This involves answering several key questions to align your value proposition to those who are most likely to engage you and where you are most likely to succeed:

1. Is my offering applicable to businesses or individuals (consumers)?
   • For the following reasons I’m going to assume we are targeting businesses (vs. consumers):
     • Personal experience (i.e., my own consulting practice targets businesses).
     • Businesses have much deeper pockets to afford the kind of consulting fees we wish to earn :-). This does not mean we can’t earn a living providing consulting services to individuals. I just don’t have the experience of doing so.
2. Are there particular industries that my offering most applies?
   • It can be most effective to start with the industry or industries that you have direct experience. Over time you may find yourself expanding to others due to ease (your name is out there as a highly skilled resource) and/or necessity.
3. Which company lifecycle stage and/or stages do my offerings and capabilities most apply?
   • Startup
   • Hyper-growth
   • Maturity
   • Decline
4. What is the target company size?
   • Large / multi-national enterprises
   • Medium-sized / domestic organizations
   • Small / local firms
5. Who is my target prospect (company contact)?
   • Chief Financial Officer (CFO) or VP of Finance
   • Chief Information Officer (CIO) or VP of MIS
   • VP of Sales and/or Marketing
   • Etc.
   • Note: I have found that the higher up the food chain my target prospect is, the easier it is to close deals (consulting engagements). For example, if/when speaking to a CFO they can typically say, with authority, “Can you get started immediately?” On the other hand, if the prospect is a supervisor or manager they very likely do NOT have the budgetary authority to “pull the trigger” on engaging a consultant.
6. Is there a particular geographic location I wish to focus on (limit my travels to):
   • Region (i.e., New England, East Coast)
   • Country (USA)
   • Earth (I’ll go anywhere!)

To be clear, defining the above doesn’t suggest that you must be unwilling to deviate from the established targets. This exercise is meant to narrow the field to where you believe the highest probability of success is to close consulting deals and effectively delivering your services. In addition, it helps you prioritize where to spend your precious time and resources.

In closing, I hope you (those considering launching a consulting business) are finding this to be a helpful exercise. Many have successfully launched and grown a consulting practice (or other business for that matter). You can too. All you need to do is simply follow the steps others have taken to do so. And, be sure to incorporate your own personal “spin” to make it yours!

Above all – Enjoy the process!

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If you’ve passed the litmus test (shared in a prior post) which would suggest that launching a consulting business “may” be a good path for you to consider, you are now ready to put together the overall business plan.

This does NOT have to be a long, drawn-out or tedious process. Especially if you are “boot-strapping” the business with your own funding, as I did (i.e., seeking no investors). The areas to be covered are simply meant to ensure you have carefully considered key variables to support the effective launch, ongoing management and growth of your business.

The starting point is defining your value proposition. That is, clearly describing:

• What it is that you are EXCEPTIONALLY GREAT at; better than most
• Goals and objectives that you can help someone (an individual or organization) achieve
• Problems you can help solve or avoid
• Risks that you can help to mitigate

In a nutshell, being a consultant means you are expected to have the scars of experience to guide someone to success in a given area (or areas).

The reality: If you’ve been in the working world for more than 10-15 years you likely have 3-5 concrete areas that you could build your value proposition upon. Being that we are our own worst critics, it might be good to have a conversation about this with a trusted advisor. Someone who has significant business experience and success who can listen to you describe what you do on a daily basis and tease out of these activities some “dragon slaying” tales.

Said another way, a value proposition is NOT about activity. It is about results. For example:

• Do you have a demonstrated strategy for increasing customer loyalty and employee morale in a customer service environment, while at the same time lowering costs? If so, by how much was customer loyalty and employee morale increased, over what period of time? And, what % of company revenue did your service organization’s costs represent before and after the above accomplishments were realized?
• Are you a GREAT project manager who can get projects done on time, within budget and/or help a company get a languishing project back on track? If so, what types of projects do you specialize in (i.e,. business process improvement, IT system implementations and/or upgrades, post merger-acquisition integrations, etc.).
• Can you help an organization become compliant with regulatory requirements (i.e., HIPAA, SOX, OSHA, etc.) and/or eliminate the risks of becoming non-compliant?
• Do you have any particular certifications or advanced degrees? Note: Please do NOT lead with these. The market really doesn’t care about your degree(s) or certification(s). The market cares most about what you are able to accomplish. Once that is quantified, it is then important to back that up with the demonstrated experience, references as well as degrees and certifications.

If you “truly” passed the litmus test, you should easily be able to identify 3-5 areas for which you are a recognized expert and/or high performer. You’ll want to embellish on these to fully describe the value (results) that someone can expect to achieve by engaging you to help them with similar matters.

And, finally, I would suggest that, in addition to describing the “technical” (or domain-related) aspects of your value proposition, you weave in the “special sauce.” I’ve found that this often involves the ability to get things done with and through other people. Let’s face it, you could be the sharpest technical / domain-related expert with the most degree(s) and/or certification(s). But, if you don’t work well with other people, you simply won’t get much done.

This is the time to toot your own horn. And, the content will serve as the foundation of your marketing plan.

In closing, this may be the area you spend the most time on: adequately honing what you want to offer the marketplace because you are REALLY good at it and REALLY enjoy doing it! Otherwise, what’s the point 🙂

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In a prior post I introduced the topic of Launching a Consulting Business. Prior to getting into the steps of framing-up and launching such a business I promised to provide a “litmus test” to help you determine if this “may” be the right path for you.

As you consider whether launching a consulting business is right for you, please ponder the following questions:

• Are you in high demand at your job?
  • Are you a recognized expert and/or high-performer in 3-5 areas?
  • Are you a “go-to person” who is constantly asked to take on the tough problems and/or projects?
  • If you can answer “yes” to the above it is “likely” you will be in high demand in the open market.
• Are you EXTREMELY EFFECTIVE at working with other people?
  • Can you sell – yourself and ideas?
  • Can you INSTANTLY build rapport with senior executives and frontline personnel?
  • Can you get things done with and through other people?
• Do you have a large personal network?
  • Having more than 500 connections in LinkedIn would be a GREAT start. This would be people you know, have worked and/or are acquainted with. NOT a random collection of baseball cards (I mean connections) who wouldn’t know you if you passed them on the street.
• Does your spouse or significant other FULLY support your endeavor?
  • Do they believe in you and what you plan to do?
• Do you have the financial resources to weather a 6 +/- month downturn (with zero revenue)?

If you answered yes to all of the above you “may” be in a good position to consider launching your own consulting business. If you answered no to any of the above you’ll want to carefully weigh your options.

For example, if you answered “no” to:

#1 – You may need to consider how you can develop the necessary expertise to place you in high demand at your job. This could mean that additional training and/or a longer track record of performance is required (a few gray hairs don’t hurt 🙂 ). Perhaps you’ll want to place this dream on the shelf for 3-5 (or more) years until you can answer this question with an emphatic “YES!”

#2 – Regardless of your chosen field of endeavor the number one attribute you MUST have to be an effective consultant is exceptional interpersonal skills. You may have the requisite technical skills or domain knowledge but if you are NOT highly effective in working with other people launching a consulting practice will definitely be a challenge.

#3 – Once you are “outside of employment” (a GREAT thing!) you will find that having a large personal network is the number one thing to “keep you busy.” In fact, over 90% of my business has come from my personal network. If you don’t have a large personal network you’d better know how to “dial for dollars.”

#4 – Have a good long talk with this person to find out why they are not in support of your endeavor to determine if there is anything you can do to ease or eliminate their concern. And/or are they telling you something you really need to hear? Perhaps you’ve placed a higher estimation on yourself / skills than reality. Or, you need to give them a better understanding of your skill-set and accomplishments so that they better understand your capabilities and offerings. If you cannot get to a fully qualified “YES!” on this one you will not have the support on the home front that can be very helpful in ensuring your success. Especially when things don’t go according to plan.

#5 – Without the financial resources to weather a 6 +/- month downturn (with zero revenue / income) you could still consider “initially”:

– Doing some consulting “on the side” while you maintain your existing job. This will allow you the time to test the waters and build-up a safety net that can sustain you for a period of 6 +/- months for when (not if) there is a downturn in your revenue stream.

– Becoming employed or engaged by a consulting firm that is in the general field of your expertise or primary offering. They may have more work than they can handle and will benefit by engaging you to deliver the services you offer. And, they can serve as an effective marketing channel to get your name out there (as a consultant). Just be careful in terms of the agreement you sign to ensure that it doesn’t prevent you from performing in that market upon your decision to disengage with them and embark on your own.

While there are other questions to ponder as you consider whether launching a consulting business is right for you, this should give you a good start.

And, if you answered “yes” to the above questions stay tuned…

Update 4/28/2016 – The above litmus test would apply most specifically to those desiring to launch a consulting business. For a more “general purpose” litmus test you might consider using the self assessment tool offered by the Small Business Administration. Click here to take the quick self assessment.

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