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The Stratification of Consulting

I was trying to coach someone the other day who was creating a proposal for a prospect. She was using a professional proposal format, was writing well, and had asked the buyer good questions. So far, so good, right?

Well, as they say, not exactly. The objectives were to create a training outline, and the measure of success was that it would be created within deadline, and the value to the organization was “an orderly training process for phone sales people.” Oh, yes, and the fee was $8,000.

We were chasing a fly with a battleship. A simple oral agreement followed by a confirming letter to the buyer probably would have done the job nicely.

How Big Are Your Plans?

Someone mentioned a book to me the other day which is about how to make six figures in the consulting business. Why would you settle for six, when you can make seven, I wondered? But that’s when I realized the problem.

A lot of people are simply thinking too small.

I think there are several stages in the trajectory of a consulting career:

Stage One: Getting started, organizing, educating yourself, forming your practice, and understanding what you don’t know. If you do this well and obtain excellent advice, you should start bringing in revenue in about six months. (If you’re still doing this a year later, you’ve failed.)

Stage Two: Establishing a going concern, paying the bills, fine-tuning, creating repeat business, and expanding your skills. Over a year or so you should build your business to $100,000-$200,000. (If you’re still at this stage two years later, you’re in the “success trap.”)

Stage Three: Establishing repute, gaining referrals, building a brand, creating “gravity,” publishing, speaking, leveraging your competencies, and diversifying. At this point you should be somewhere between $250,000 and $500,000 in revenues.

Stage Four: Regarded as an expert and authority, strong brands, passive income, labor intensity decreasing, retainer work, discretion in the type of clients accepted, and fees never debated. At this point, you are in excess of half-a-million dollars and perhaps somewhere over seven figures, depending on how much you want to work, your market, and so forth.

I don’t believe that you should be in this business if your intent is not to proceed to stage three, at a minimum. That means you have to jettison your “stage two thinking,” including the types of clients, fees, projects, and labor intensity that characterized earlier work.

Otherwise, What’s the Point?

It makes no sense to attempt to master sophisticated techniques in proposals, methodology, delivery, and referrals if your mindset is still at stages one and two. That’s why an impressive proposal is wasted on training programs, why value based pricing is irrelevant for $5,000 projects, and systematic referrals do you no good when your business model is a day of coaching or billable hours.

We take tremendous risks in solo practice, from self-funding our insurance to dealing with slow-paying clients, from the impact of illness to the requirements of travel and less family time. But these should be relatively temporary and alleviated by the eventual emergence of a highly successful, wildly profitable practice. Otherwise, why leave the corporate world to begin with?

It’s a good time, right now, to evaluate your own thinking and plans. Are you intending to merely arithmetically grow and do more of what you already do, or are you considering exponential growth? Are you sticking your toe in the water, or making waves?

I’ve wondered for some time why consultants who make every effort to learn and master new techniques don’t achieve greater success. Ostensibly, those techniques should help them progress through the stages above. But one’s mental set is the key. You must be willing to think in larger terms, tackle greater challenges, and aim for bigger targets. The battleship is built to gain a beachhead, not to swat a fly.

You control your willingness to use the skills you acquire in the right venue, at the right time, in the right circumstances. You may have the right tools, but you must be willing to climb to the next height.

There is, after all, a stage five out there, which comprises reaching the top of your craft, playing at the top of your game, and helping to actually set the rules.

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Alan Weiss, Ph.D. is the author of twenty-five books—including Million Dollar Consulting—which appear in seven languages. He runs the unique Million Dollar Consulting™ Colleges three times a year, and has a global mentoring program. You can reach him at http://www.summitconsulting.com, where you can also download hundreds of free articles. He was recently inducted in the Professional Speaking Hall of Fame® and received the Lifetime Achievement Award from the American Press Institute, the seventh in its 60-year history.