Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

July 17, 2012

Hire a Small Consultancy?

Q: What are the top 3 things solo practitioners can do to out-compete the big brand consulting firms when vying for a project? Asked on Linked In by Roberta Guise

My answer:

The top 3 benefits to clients of working with smaller consultancies:
#1. You get to work directly with a principal of the firm, not with some green MBA sent out by the partners.
#2. Nimbleness and flexibility.
#3. The billing rate includes less markup to cover the cost of big offices and admin staff.

On the other hand, there are some (perceived) drawbacks:
#1. You’re stuck with one kind of expertise, and they try to make all your problems fit into what they know.
#2. If they’re busy, you wait. Your project may be subject to unexpected delays if multiple clients of theirs all have urgent requests.
#3. “What if the principal is hit by a bus?” You fear there’s nobody to step in to complete your project.

As the small consultant, how do you address these concerns with clients before they mention them? Here’s how I handle them:

1. Ally yourself with a few other complementary and trusted consultants, and don’t be afraid to refer business to them. You could also bring them into a project on a sub-contractor basis. These referrals have to flow both ways.

2. Under-promise, over-deliver. This is our time-management bugaboo. Don’t schedule all your hours; leave some time for urgent things that come up. The flip side of this concern is that we often handle urgent client requests during “overtime”—evenings and weekends.

3. Addressing this one requires having one or more strategic partners who can fill in for us, when we get sick, have an emergency, or just want to take a well-deserved vacation.

“Small” needn’t mean “solo.” The best consultancies I’ve had relied on two to four consultants who had partially overlapping areas of expertise. We were complementary. One client may use more than one of us. And we did have the capability to partially fill in for each other during absences.

Finding the right mix of people is not easy, but that’s a subject for another blog post.

November 10, 2010

Are we entering the Golden Age of Consulting? Yes or no.

Filed under: For Coaches & Consultants,Thrive in tough times — Tags: , , , — Mike Van Horn @ 12:57 am

I’m discussing this with another veteran consultant, Janet Tokerud, and also on a LinkedIn forum. I’d like to hear your 2 cents. Here are a few factors:


1. Companies can’t keep up with the firehose of change. Many have downsized their expertise, knowledge, and wisdom. They have to rely on outside consultants. We are the only ones with the mandate to stay on top of change, and the only ones who get paid enough to make this feasible.

2. We traffic in ideas and solutions and information. These are constructed of data and numbers and words. Thus the internet is the ideal medium for us. It connects us with each other anywhere in the world, as is happening on this forum this instant. We can communicate and publish with no middleman or gatekeeper. Internet forums like this provide the nexus for us to flourish and to provide value.


1. Economic volatility puts us at the end of the tiger’s tail, where we are thrashed back and forth unpredictably. For example, my clients are small professional businesses that serve larger corporations that engage in the global market. When the markets hiccup, the corporations shudder, my clients can have a heart attack, and I can get dashed on the rocks. Where is the stability for us to get ahead?

2. Every year, more and more lucrative consulting tasks are outsourced across the world or programmed into an app. What will be left for us to do?

3. We lack the resources to innovate to keep up with the big players. We’re doomed to fall behind and slide into irrelevance, to be overtaken by the next newly-minted generation of PhDs and quants.

What’s your take on the outlook for independent knowledge professionals such as consultants?

December 31, 2009

Can Consultants Collaborate on Marketing and Projects?

From a discussion on Bay Area Consultants Network (LinkedIn) started by Herb Kessner: “How can our members with similar business models collaborate for success and revenue in 2010?”


I’m involved in such an effort with other consultants.

I would like to see efforts like this work, but I’ve found it difficult to produce the desired benefits. The idea is simple: We  have complementary offerings, thus:
1. We should be able to provide related services to a single client, when either of us alone could provide only part of what the client needs
2. We can take advantage of each other’s marketing networks. I refer qualified prospects to you, and you refer them to me.

But what happens is often different. I may be attracted to such a joint effort because my well is running dry, I’m trying to shortcut the tough necessity of marketing, and I’m hoping you will rescue me. Alas, you are hoping the same of me! So we’re two people (or more) whose pipelines are trickling.

Thus to work together effectively, the first question we must address is how we will tackle the annoying marketing question.

If our pipelines are flowing smoothly, and we’ve got as much work as we can handle, what’s our motivation for joining forces? Why go to the trouble of working out joint operating agreements with you when it just takes away from my billable hours? If I need somebody with your expertise on a project, why don’t I just hire you? Or sub part of it out to you?

This is a legitimate viewpoint, and a lot of consultants think this way. And this is why we remain solopreneurs. (Or, if we’re a very prolific rainmaker, we begin hiring others as subs or employees to handle projects we generate.)

But there is a case for a joint operating agreement among two or more consultants. The prime rationale, in my experience, is synergy and collaboration. We’ve got to energize each other, and make each other more creative and productive.

Several pre-requisites:

1. We must work with the same type of clients. Not just similar, but the same. I’m seeing this in a current effort: I work with slightly larger small businesses than does my collaborator, and it’s an issue.

2. We must offer truly complementary services to the same niche of customers. Not just non-competing services. Not just services the same client would purchase (e.g., my growth management services and your financial services). We must offer an integrated package that meets the felt needs of our target customers.

3. We must be able to develop brand new customers–and probably new channels to reach them. We can’t rely on our existing lists and means of outreach.

4. We must all be 100% committed to making this work–esp. the marketing, which is often the hardest part. Can it work as a sideline? A big question. How do we continue to handle our current business while developing this new joint venture?

Questions of success. When we do get joint clients:
— Who handles the admin stuff? Contracts. Billing. Banking. Insurance.
— Who owns the intellectual property? Not the “for hire” stuff that belongs to the clients, but the creative stuff that belongs to us. If I get inspired by your idea (and I will!), and develop a whole new thing from it, how do we divvy it up?
— What happens if you want to work, work, work, and I want to spend more time in Hawaii? Or if our joint venture has a big rush client, but I have to serve my own clients as well?

What do you think? I invite others to weigh in on this issue as well.

Mike Van Horn

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