Starting your own consulting business is something that shouldn’t be taken lightly. We have come across many professionals that believe that all it takes to start a business in this industry is experience. This is not the case.
Like starting any business, there are many elements you must consider. With consulting, things can be a little different. Because you are partnering directly with other businesses, there is more at stake.
4 Tips to Build a Better Consulting Business
Before you start your own consulting business it is important to consider the following 4 tips.
1. Create A Competitive Advantage
Your potential clients are smart and are looking for someone that can offer something that they do not have, otherwise known as a competitive advantage. They need to see that you are different from other consulting companies in ways that are beneficial for the sake of their business.
Because potential clients are looking for someone to help with a problem they cannot fix on their own, they need you to be their solution. As a consultant, you should take strides to fill pressing knowledge gaps. Rather than providing them with information they already have access to, such as raw data, it is important that you give them something more understandable – something they can’t get on their own.
This can be anything from quantifying results to suggesting a new marketing strategy. Your clients hire you for cutting-edge advice, but you have to make it easy for them to understand what you are suggesting.
2. Relationships > Revenues
It is important to remember that the consulting business is relationship based. A big factor of your business is trust. Your clients have to have major trust in you, as you are diving into their data and creating solutions.
When you first meet with a client, it is crucial to leave out costs until after discussing their needs and objectives. Money talk will only scare clients away or lead them to believe that your partnership is only based on revenue.
Reputation is everything in this business. To ensure that your reputation is solid, see each client for their relationship first and revenue second.
3. Pitch Differently
As previously mentioned, your reputation in this business is everything. It is important that your reputation is clearly translated in your pitch. You want your clients to view your services as value rather than a commodity.
This can be translated in a number of ways. By pricing your services by the hour, you are telling your potential clients that you are a commodity, or something that can be bought. Try pricing your services based on your scope of work and end results. This will tell your clients that you are serious about making their business the best it can be.
When pitching your services to potential clients, discuss how you will help them, rather than whether your firm will be used. This will help translate your value.
4. Flexibility With Payments
When setting up payment with your client, it is important to be as flexible as possible. Because of the contract based nature of your work, there are many instances where clients can be late or neglect to pay invoices, which can cause your cash flow to suffer tremendously.
By offering flexible payment systems for your clients, they will be more likely to pay their invoices on time and in full.
If you are already an established consulting business, you have probably come across this problem. If this is the case, turn to business factoring. With business invoice factoring, a factoring company will purchase all, or some, of your invoices to advance you up to 96% of its total in just 24 hours or less. Because they are purchasing your invoices, they are granting you money that is already owed to your business – so you do not incur any additional debt to your name.
Business factoring is an easy way for your business to strengthen cash flow, pay off debts, and have a strong source of working capital to grow your business larger than ever before.