Are you really in business?

open for businessMost independent consulting businesses (ICB) are little more than highly skilled workers with special employment contracts. If your ICB sells your services in units of time, then sadly it’s not much of a business. The weakness of almost all ICBs is the need for constant input from the owner. It’s difficult to achieve leverage working like this, and for anyone with ambitions beyond being a glorified wage-slave, there’s no option but to move away from selling time-based services.

So if you want some ideas on how to make the shift, these three strategies are sure to improve the profitability of any business, and without taking on the responsibilities and risks involved with building an empire.

  • Strategy 1 – Transitioning from marketing a service to marketing a solution. This is more about how you present your offering than actually having a “solution”. The solution, by the way, is the outcome your services will deliver, not the activities you perform to get there. This strategy is about taking responsibility for outcomes and pricing a premium for doing so.  The result is clearer solution focused proposals, and more profitable billing tied to results that your clients can appreciate
  • Strategy 2 – Develop your Intellectual Property (IP). There’s nothing more gratifying in business than re-selling something that you’ve created – over and over again. IP is also great way to marketing your base services and provides you with the opportunity to leverage the services of others – you provide the know-how, they provide the labour.
  • Strategy 3 – Get admin support.  The strategy of taking on administrative overhead might seem counter intuitive at first, but this is about reducing the energy your put into low return tasks instead of selling, creating IP, or doing billable work. Bringing administration into your business also forces you to standardise the way do things, making you more efficient and building further capacity for growth.

No matter if you have modest ambitions or high hopes for your business, making up your mind to dispense with selling your time is surely a step worth contemplating. Making it work – well that’s going to take some trial an error, but the first and most crucial step is to ask the question:

Am I really in business?

Now get out there and sell something other than your time.

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Please leave a comment below if you found this article helpful or if there is anything else you like see discussed in this blog.

Thanks and best wishes,

Mark

9 thoughts on “Are you really in business?

  1. Mark, good article. In terms of outsourcing admin, it is also worth looking at some of the sites like elance.com and freelance.com to see whether simple book-keeping/PA tasks can be offshored.

    • Hi Brad, Thanks for the for the feedback. I agree that the services you mentioned are great resource for independant consultants. I’ve use elance for web development and for getting support on some presentations that I needed to develop – overall a good experience that connected me to some other great professionals. In Melbourne, Barb Scott from Admin Angels works as my practice manager – it works great and extra support is there whenever I need it.
      Thanks again,
      Mark

  2. HI Mark,

    I agree with your three strategies; in particular Strategy #1: the difference between selling your service and a solution can all come down to perspective. A solution requires you to focus on and understand the problems of the customer to understand their needs rather than “pushing” what you can “do”. The other strategies just make sense!

  3. G’day David,
    Thanks again for the feedback. I plan to explore these strategies a little more. After all, I the real challenge is not knowing that you should be doing these things, but working our how to actually do it.
    Cheers,

    Mark

  4. I think many of us struggle with this quite a lot, and it is perhaps the most important step in. Moving from being a Consultant to a Business. But then there’s the counter example of the big global firms. I worked for PwC for nine years and although they’d all claim IP and whole range of other unique expertise, in the end we just sold units of time packaged in various ways. And these firms are lucrative businesses. So what is the difference, then – scale? market perception built up over a long period?

    • Hi Ravi, Great to hear from you. I don’t think firms such as PwC are selling time. As you suggest, they are leveraging heavily on their reputation, global presence and IP. Perhaps they are in the recruitment business (not the consulting business), buying talented and hard working people and selling them to clients for premium under a strong brand.

  5. Hi Mark,

    Another succinct insight. The ‘wage slave’ comment made me sit up and take note!

    Do you have any suggestions about how the solutions could be evaluated by the client? It can be tough coming to an agreement that you have delivered what’s expected. Paying for hours seems a simpler equation for both the client and the consultant but I agree entirely that this is not a good outcome for either the client (no certainty of outcome) or the consultant (no opportunity to leverage expertise / IP).

  6. Hi Rod, thanks for your comments on this article. I think it should come down to both parties understanding what the value proposal is. Too often we go in talking about what we are going to do rather than what the result would be. I’ve made a few extra observations about the purpose of the Unique Value Proposition in most recent post on consulting sales (Juicing up your sales performance with these essential ingredients). Admittedly, its often difficult to implement value driven engagement when the purchasing system is biased towards time based accounting.

  7. Hi Mark,

    A great thought provoking article especially when I am just setting up as ICB to assist organisations set up contractor management processes. I appreciate you postings on Linked In well done.

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