What do consulting winners do differently?
How can we use what we learn from them to supercharge our own independent consulting businesses?
A resilient few businesses survive recessions and skyrocket after a recession passes. They aren’t the typical growth leaders.
About 85% of growth leaders decline during recessions. So these winners have something more, something different.
* Roaring Out of Recession, Harvard Business Review magazine, Ranjay Gulati, Nitin Nohria, and Franz Wohlgezogen
Only 9% come out of recessions and economic turmoil as winners, accelerating growth and profits after a recession. Why? What do they do differently?
Research into 4,700 companies by McKinsey & Co. found almost identical results to that of the Harvard professors. They found that in the lasts three recessions 17% of businesses did not survive. Approximately 80% failed to regain their prior profitability and growth in three years.
Again, 9% not only survived, their growth and profitability accelerated. They were supercharged.
* What We Can Learn from the Resilients of the Last Economic Downturn, McKinsey & Co., July 31, 2022
What Drives $1 Million Dollar Independent Solo Businesses?
Elaine Pofeldt found some of the answers to what makes winners when she wrote her very readable book, “The Million Dollar, One-Person Business.” She analyzed U.S. Census data to find common attributes of solo professionals with $1 million dollar businesses.
Common Performance Drivers in Solo $1 Million Dollar Businesses
Elaine Pofeldt found common performance drivers in $1 million dollar solo businesses after she did her data analysis and 30 personal interviews. The winners had this in common,
- Specializing in the Right Niche
- Providing a Product/Service with High Potential and Growth
- Creating a Defendable Position
- Testing Audience Demand
- Serving a Mass Audience
- Creating a Scalable Operation (Not Hourly)
Clearly Defined Ideal Niche and Client Profile
Surveys by those serving professional service firms duplicated Elaine's findings and included a few additional characteristics.
High-growth consulting firms (with an annual growth rate of 20% or greater over a three-year period) precisely defined their ideal client in a niche market. This reinforces Elaine Pofeldt’s findings on creating a defensible, high-value niche.
* 2021 Hinge High Growth Study
After clearly defining their niche and client profile, high-performance firms validated the new or adjacent niche and client profile before wasting time, resources, and effort.
This is so important that in my Consulting Mastery Series ™ courses we devote a week to finding your niche and problems, and devote a second week to defining exact client profiles and key words and topics.
Integrated Lead Generation Activities
High-performance consulting firms use an integrated marketing approach. They use a combination of outbound email, organic and paid social, and SEO. (SEO is the analysis of which words, topics, and phrases are most important and searched for by your target clients.)
Again, I consider SEO critical to every consultant who has a website or LinkedIn profile. Members of the Consulting Mastery Series ™ receive an SEO analysis of their competitor and their target audience. This helps you focus on the most important topics and problems to your clients and to use words and phrases that align with how they think.
As independent consultants we don’t have teams of writers and web marketers to write a lot of content for multiple marketing campaigns. But, with a little planning, the right systems, and tools we can turn one piece of content into a series of integrated self-reinforcing marketing content. It's a compination of Simplify and Pareto's 80/20 Principle.
You can see in the chart* the most effective marketing methods for professional services firms were social media posts, search engine optimization (SEO), and LinkedIn ads.
* Chart from 3 Keys to Building a High Performing Sales Pipeline, Rattleback Lead and Sales Activity, May 2021
Highly Differentiated Position
Winning consulting firms specialize in specific problems within industry niches. They learn the common problems within a niche, then develop the authority and expertise as the leading expert in that niche and problem.
You also want to think about how you will differentiate yourself and create defensible boundaries. In my first 15 years as an independent consultant I was able to compete successfully against the top three accounting firms because I had the brand as Microsoft's "Mr. Excel" and created financial modeling systems linked to the corporate mainframe.
In the Consulting Mastery Series ™ we go through a marketing exercise to help you differentiate your consultancy.
Creating High-Performance with Simply Guidelines
As an independent consultant or professional we are limited by our time, and resources.
But if you follow a set of simply guidelines you can create high-performance results without working 7 X 24.
The tactics and tools are based on,
Focus your work on a niche.
Don’t complicate systems. William of Ockham, 1285-1349, is famous for Occam’s Razor. He said, the simplest explanation is probably right. Use a “razor” and cut away the excess.
- Pareto’s Principle, 80/20 Principle
The 19th century economist, Vilfredo Pareto observed that 20% of inputs are often responsible for 80% of the results.
- Compound Interest
Einstein was supposed to have said, “Compound interest is the most powerful force in the universe.”
In business systems you can get the power of compounding by continually making small, improvements to your value chain. That’s known as Kaizen.
As independent’s we don’t have battalions of worker bees to do our bidding. But if we work wisely each job and nugget of knowledge can be leveraged multiple ways. It’s like all the raindrops funneling together to create a river. (My tea must have something poetic in it. 😊 )
Apply Small Changes at Key Points in Your Consulting Value Chain
Your consulting Operations/Marketing Value Chain is the network of things you do that builds your business.
Every small improvement (Kaizen) you make in the chain gets magnified by other improvements farther along in the chain. The small improvements build on each other (Compound Interest) as they cascade down the chain.
A solid foundation for an independent consulting business has eight building blocks. Even a small improvement in one block creates compounding improvement in the building blocks down the value chain. The compounding effect can be huge.
For years I bumbled along as a consultant, writing, teaching, networking, speaking, calling. That worked, but it was Feast-or-Famine. Some years great, other years barely enough.
Only after many years when business consistently grew did I see how this Consulting Value Chain had made my consulting successful.
It took me from a newbie, earning less than $37K a year, to multiple years of high six-figures and a few million-dollar years. And that was before selling online courses.
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