How To Build A Successful Consulting Business, Part 1

Joe Love
 


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In today’s constantly changing job market more and more well educated people with a wealth of experience are being laid off. Many of them try to find other jobs but with little or no success. Because of this many people are deciding to parlay their experience and know-how into a small consulting practice.

It sounds, easy, fun and exciting. You would be your own boss, making all the decisions. You would go wherever you wanted, whenever you choose. You would pick your clients and get paid handsomely for your expertise and interpersonal skills.

But being an independent business consultant is more than just being a well-paid business advisor. You must also be an entrepreneur. You have to know how to manage a business, keeping control over the detailed administrative support systems that run your office, such as accounting and personnel. You also have to know how to market your experience and write winning project proposals, because if you don’t sell, you don’t survive.

A consultant is also a project leader. You have to know how to plan, lead, and implement complex projects, and often several at the same time. You have to manage fee structures, deadline pressures, and client expectations. You have to know how to respond to conflicts or hostility within client organizations.

Do you think you have what it takes? Are you still tempted by the idea of either leaving your current job or if you’re unemployed stopping your career search and setting up your own consulting business? If you are then keep reading.

If you’ve decided to start your own consulting business the first thing you must do is to decide if you want to be a generalist or a specialist. For example if your background has a specific industry focus, then you should become a specialist. If, on the other hand, you have skills that cover various industries and functions, then you are probably a generalist. As a generalist, you bring the perspective of different functions acquired through your previous job experience.

It is usually easier to market a specialty rather than general services because you can be precise about what you will offer the client. The problem with specializing in a specific market is that new consulting jobs in that market can decrease or dry up completely in a hurry. But you may also find that, over time and with more experience, you will be ready to offer your services outside the industry you first specialized in, or that you have expanded the services you offer to clients.

Once, you’ve set up the basic financial, personnel, and legal resources you need to run your business it is time to start marketing your consulting experience. Selling involves meeting and talking to prospects to discuss their problems and your qualifications, and then proposing your solutions to their problems.

Before you can begin preparing marketing materials to contact prospects, you have to decide which industry you want to serve, what type of services you want to provide, and who the decision makers are you should be trying to reach. You also need to find out who will be competing for the same market and what their strengths and weaknesses are and most importantly, if a marketplace exists for your services.

Once you have decided what you will market and to whom, you can begin to choose your marketing techniques. Here are some for you to consider:

* Newsletters or articles. An informative newsletter or articles published in industry periodicals, will make your name known and enhance your credibility with prospects. This is an excellent marketing tool to use on the Internet. You should have a sign up place on your Web site for prospects to sign up for your free newsletter. And there are some very good Web sites for publishing articles you write that can help you get the exposure you need.

* Seminars. Sponsoring or cosponsoring a seminar also enhances your identity and your reputation. If you can afford it, pay for the attendance of a targeted group of executives. It’s an expensive but very successful way of obtaining clients from the prospective pool.

* Referrals. There’s nothing like a referral to open a prospect’s door. People do not refer those they do not respect and esteem to those they know. Referrals are therefore a convincing testimonial to your qualities as a consultant.

In addition, with a referral you know that the prospect is interested in buying, so you’ve already got a head start on the selling process. A referral from a peer to a potential client is valuable. A referral from a prior client to a potential client is even more valuable.

* Public Relations. Public relations is getting yourself known in the field in which you consult. Interviews, articles written by you or quoting you, or public speaking can make prospects familiar with your name and the services you provide.

But don’t spend too much time on PR. Remember, you’re in the consulting business and should be spending your time on marketing and delivering services to clients. For the most effective PR, use specialized firms if you can afford it. They’re in contact with media for all their clients and can identify the best opportunities for you.

Consultants often get so involved in marketing to potential clients that they forget to market to their peers. If you have an expertise in a specialty needed by another consultant’s existing client, for example, the other consultant will gladly refer a client to you, if you have a reputation for quality performance. That quality performance will make the referring consultant look good to his or her client.

To market to your peers, first keep them informed about what you are doing now. Let them know your current assignments and interests. Second, meet with your peers at professional meetings to establish close, personal relationships. Third, impress your peers with your competence rather than your salesmanship. Then, perhaps, they’ll do some marketing for you.

Once you’ve identified prospects and scheduled first meetings with them either in person or by phone, you are now ready to begin selling. The first thing you must do is to qualify the prospect. This means you have to determine whether you can help them, and whether they will allow you to.

In the consulting business it’s difficult to qualify prospects without meeting them personally. You can establish some prequalification criteria. For example, you can decide not to sell to companies with less than $500,000 in sales, since it isn’t likely that they can afford you in the first place.

But to know more specifically whether you can help prospects, you need to know exactly what they need. Therefore, to qualify a prospect it is best to meet them personally or at least talk to them by phone. You cannot qualify a prospect by exchanging e-mails.

To help you better evaluate and identify the needs of the prospect you need to get some important information. You need to know what their business is and what their role in the business is. You need to know exactly what the problem is and you need to make it clear to them what your background is and how you can solve their problem.

The purpose of the initial meeting or conversation with a prospect is for both of you to get to know each other. But keep in mind that you are qualifying the prospect, finding out what he or she needs and whether you can help. On the flip side, the prospect is qualifying you to determine whether you have the experience and resources to help him or her with problems.

Before you can submit a proposal to the potential client, you have to introduce and sell yourself. If you don’t pass this first step, you will never get the opportunity to even present a proposal.

You might feel that your experience and expertise are so valuable that you shouldn’t have to resort to selling. But this attitude won’t get you any clients. When you sell yourself, the process must reflect your strategy. For example, if you are going to position yourself as a top-of-the-line consultant you must offer more than the basic services tied to the assignment.

When you are selling your consulting services to a prospect, it is essential that you emphasize to the prospect how he or she will benefit from hiring your services. For example, you will show them how to save money or enhance their growth.

Being an independent consultant can provide you with the freedom, excitement, fulfillment, and money that you dream about, but only if you set up, and market your business the right way. In part two we will cover how to write proposals, protect yourself, and solidify you client relationships.

Copyright© 2005 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.

Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many of America’s largest corporations, on the subjects of leadership, self-esteem, goals, achievement, and success psychology.

Reach Joe at: joe@jlmandassociates.com

Read more articles and newsletters at: http://www.jlmandassociates.com

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