Barriers to entering the
consulting business are few. Anyone can seek to sell his
or her knowledge and experience to another party who needs
their assistance. The paradox however is that building
a successful consulting business requires far more than
expertise in a particular field of endeavor.
First, the aspiring consultant
must know the market for his or her particular area of
expertise. Who are your prospective customers? What are
their specific needs, and how much are they willing and
able to pay for such assistance? The likelihood of success
is far greater if there are many potential clients who
place a high value on your expertise.
Next, the successful consultant
must establish a portfolio of products and services that
the market wants, demands, and is will to pay for! To
create an on-going relationship you must have more than
a single product or service to offer. Otherwise you will
be doing “project” consulting which has a
limited life span and you will need another client to
replace lost income when your “project” is
Pricing is tricky! First
as a consultant, you will have competition from those
who freely share their expertise, from free information
on the internet and from “how-to-do-it” books
on almost any subject. Fortunately, the perceived value
of “free” or low cost advice is low.
To sell your products
and services they must be affordable to the chosen market.
Your real value, however, is not wisdom or advice, but
rather in the ability to achieve successful implementation.
When your work generates revenues that far exceed its
cost, you will have satisfied customers and be able to
When you have identified
your market, products and services, and your pricing model,
you must then communicate directly to prospective clients
who you are, where you’re located, what you have
to offer and why you are the obvious best choice among
their available alternatives in order to obtain their
Having done all of this
you may feel that your consulting business is a success,
but the final step is to document your billable time and
collect the resulting account receivable from the client.
In some cases this may be the most difficult element of
the whole process.
In a start up or turn
around situation, cash flow can be a barrier and your
client’s first need will be to pay daily operating
expenses. Also, there will always be those who seek to
take advantage by using your services and “forgetting”
to pay for them.
In such situations using
third party collections agencies can be ineffective and
costly. The new consultant is advised to incorporate an
effective in-house collections process within his or her
own establishment in order to collect all funds earned.