6 Steps to Fast-track Profitability in Your Consulting Practice
Over 33.2 million small businesses in the USA fall under the ‘Professional, Scientific, Technical, and Other Services’ category, making up for nearly 99.9 percent of all companies. These firms are the backbone of the country’s economy, employ millions of professionals and generate massive revenue. The overall business in the nation grew by 2.2% in 2022 compared to 2021. Of course, operating your consulting firm creates a host of unique challenges — the value of your ‘product’ can be difficult to quantify, project demand fluctuates, and the opportunity for automation and scaling is limited. However, for those seeking imminent profit, we have compiled below some crucial steps that they should consider when starting their consulting business:
1. Be Intentional With Your Niche
Waiting for demand to offer directional cues can muddle your message, delay your ability to brand, and often won’t give you the clarity you want or need anyway. Instead, take the time to determine your passion and where that intersects with your experience and expertise. Then, market yourself with that niche in mind from the get-go. If you intend to distinguish your consulting practice from the general consultants, you must carve out and focus on a specific niche within the business landscape. Applying your expertise to a niche market where your service is needed will make you considerably more successful than a general consultant. Plus, this approach will help you tailor your consulting practice to add value to your customers or businesses.
Suppose you’re intentionally establishing what you offer and who may benefit the most from it. In that case, you’ll be able to craft far more effective messaging for your target audience and design your business, considering your ideal customer base.
2. Differentiate Yourself With a Solid Value Proposition
The global consulting sector remained large and highly profitable and was valued at around US$973.67 billion in 2022. It continues to grow globally, with industry hotspots in the UK and the US. Hence, it would help if you acquainted your consulting practice with other consultants after defining your niche. Consultants can feel like a dime a dozen — even within your specific niche — so take the time to familiarize yourself with the immediate competition, and determine ways in which your value prop differs from or improves on theirs. Many consultants showcase their price, level of service, experience, awards, and unique processes to differentiate their consulting practice.
However, creating an overarching brand value proposition and providing value to ideal customers are effective ways to gain a competitive advantage. You must have a credible value proposition to achieve maximum traction. To attain this credibility, you must demonstrate experience through your success rates, customer feedback scores, press mentions, and industry accreditation. Also, make sure your practice helps your ideal clients solve a problem or address a challenge.
3. Invest Time in Social Media
Maintaining an active, professional, and informed social media presence takes time, costs very little, and helps showcase to your prospective and existing clients that your business is topical in your niche. As a consultant, you need to use social media platforms to establish your consulting practice as a thought leader in the industry and feature your expertise. In addition, sharing informative insights and trends about consulting practice is the only way to increase visibility and build a brand identity.
Set up a LinkedIn, Facebook, and Twitter page (and consider Google+ for SEO purposes). Then, spend some time once a week on finding relevant articles, studies, insights, etc., and create social media messaging that aligns with your brand identity. Moreover, automate this process by creating a free account on Hootsuite.
4. Track Projects to Keep Scope Creep at Bay
The consulting world is increasingly leaning toward fixed-bid projects, and you don’t want to lose money by falling victim to the dreaded scope creep. So instead, find an integrated system that works for you to track projects in real-time, so you can anticipate project or cost overrun and communicate with your client about the changing scope (and, thus, possibly, deadline or cost) of their project as soon as possible.
When starting out, maintaining excellent relationships with clients is paramount to the success of your projects and, ultimately, your firm’s profitability, so being prompt and transparent in project communication and updates will ensure that you remain on the same page and on their good side.
5. Add Value Outside of Project Work
Part of maintaining good relationships with clients means positioning yourself and your consulting firm as more than just a service provider. Steer away from purely transactional relationships by finding creative ways to engage clients outside of project work. For example, hosting an after-work event for clients, introducing different clients to each other to build partnerships, compiling a regular newsletter of industry-specific news, writing informative articles to your clients, and contributing to a client’s community outreach initiative (financially or otherwise) are all unique ways to prove yourself as a trusted and valuable asset.
To drive more customers and reinforce your expertise, use online outlets to provide valuable industry information that informs your audience, helps build personal brand credibility and positions you as a domain expert.
6. Step Up Your Follow-up Game
Don’t let your follow-up fall to the wayside — or worse — get forgotten in the fray. Successful consulting firms invest in customer relationship management systems (CRM) to keep up with client preferences, improve their conversion rate, and close more deals. Small firms starting out might not initially feel that such automation is necessary. Still, it’s better to embed these processes into your business operations sooner rather than later, and doing so will help you maintain a consolidated client information database.
Once you collate customer information, approach your potential clients with a multi-dimensional strategy and follow up by understanding their requirements. This approach will help establish your consulting firm and build long-term business relationships, thus creating a win-win scenario.
Create a Winning Strategy for Your Consulting Practice
No matter your industry or prior experience, promoting your consulting business in 2023 might seem intimidating. The coming months will bring unexpected challenges as you begin working with clients and scaling your services. However, arming yourself with the right marketing strategies and implementing them into your practice will help you handle these contingencies as they arise. Following these six strategies can help you grow your consulting firm organically and maximize profitability.
