5 Reasons to Work with Small Clients and Projects

Working-With-Small-Consulting-Clients

Not all clients are the same. They certainly aren’t all worth the same to your business.

Yet consultants often pay little attention to this truth.

In the consulting business there are two core approaches to growth:

1) Focus on volume – where you take on as many projects as you can. The more projects the more income. To service those projects you need more staff, resources and infrastructure. Revenues can be high. Margins lower. This model often uses hourly billing or lower cost projects.

2) Focus on value – you work with fewer clients. Each project you take on is worth considerably more. Revenues may not be as high as the volume approach yet margins are much higher. Many consultants including myself have scaled our businesses this way above $500k and even $1M+.

The volume approach is the route the large consulting firms take. They bill high hourly fees and constantly need competent staff to execute and work with clients, who they pay a lower hourly rate to.

The value approach is chosen by most independent consultants and small firms. This has always been the approach I’ve used and one I’ve become an expert at helping others create as well.

Mix and Match?

Some consultants haven’t thought this through however. They run a small firm or are working solo, yet they operate their consulting business more like a volume based one.

They experience overwhelm, working long hours, lower profitability and have trouble figuring out what they are doing wrong. Why the success they want so badly isn’t coming their way.

The fastest way to fix this is to switch your approach to one focused on value.

There’s a lot more I can say on this and I will in a future post. Or if you want help right now to make this switch in your business and start attracting more high-paying clients get in touch about coaching here.

Are Small Clients Worth It?

The argument for working with higher-paying clients (value focused) is clear. So the question is, should you ever work with small clients and projects again?

The answer is yes. But only if it matches one or more of these criteria:

  1. You see great potential in this client. Maybe they are a startup with funding and you can clearly see more work, greater opportunity and value around the corner.
  2. It’s a small project BUT with a large company. Sometimes getting into a BIG company requires the first project to be a small one. There’s nothing wrong with this. It’s your foot in the door. An opportunity to show them how good you are.
  3. The client can open bigger doors for you. The buyer may be a very well connected executive who has left a big firm to start their own. You helping them with a small project could open many doors for you.
  4. You’re just getting started in the consulting business and you want to ease into it. Gain some initial experience that you can then use to create case studies and showcase results to win larger projects down the road.
  5. It’s your passion. You enjoy working with smaller clients and you’re okay with making less income.

Is It For You?

When deciding to take or reject a new client give these criteria some thought. If you can’t find one of these criteria to be true for you rejecting the project may be your best decision.

Sure, you might lose that initial income. But remember, if you’re filling your schedule with small clients and lower paying projects it leaves you with no room or time to take on larger clients and higher paying projects.

What are your thoughts? What percentage of your clients are small clients vs. large clients? Are you happy with the balance you have or do you want to make a change? Let me know in the comments below.

  • Alison Wren

    Definitely number 5 for me. Partly small business is my area of expertise, but really I just love working with them and knowing I can make a huge difference to their profitability.

    • That’s great Alison! Following your passion is so important.

    • Bill Doerr

      Alison, great to hear of your passion for the little guy / gal. As they say, “Many are called, but few are chosen”. Nice to see you’re heeding the calling! Cheers.

  • Nice post as usual Michael. I too love working with small clients but, I have started to gravitate back to securing larger clients. However, what I am finding is that the consulting market, at least in the Midwest portion of the U.S.A., has changed and the larger clients have become more difficult to land.

    When we were in the depths of our recession, I made the change to working with small clients.

    Now, that I want to move back into the large client market, I see the need to change marketing strategies and philosophies.

    • The approach to land larger clients is different. It’s often possible to use online marketing strategies to land smaller clients however to really engage larger clients you’ll have to take a different approach. If you’d like some help with that let me know here: http://www.consultingsuccess.com/talk

  • Bill Doerr

    Lot of thought here, Michael. I find not only are there more of the smaller client opportunities, they’re also easier to access. But the profitability issue you raise is very legitimate. I’m finding that creating a staged approach of 1-many solutions that are affordable and still profitable by utilizing self-study tools (like your book / course, Michael), consortium training for groups and ultimately, 1-on-1 consulting if / as / when indicated appears to meld the best of all possible worlds — easy access to get started and good potential for growth that can still be profitable, too.

    • Bill – having a several offerings that you can move clients from with greater levels of value is a smart approach. You also have to look at where you spend your time. The more time you spend on smaller potential projects the less you have to work on landing bigger deals.

  • OSA

    My entire niche business is with the undeserved small licence holders of Salesforce.com and yeah it’s been brutal at times. Over two years my attrition rate is 3-4 months because I’ve done all I can for them. So, I am looking at some larger companies but, then I am on the radar of the large consultants……

    • OSA – you may want to consider other services or products that you can offer your existing clients. Don’t ever be worried about competition. Focus instead on serving your clients and growing your business.

  • Katrina Starkweather

    Michael, this post really resonates with me. Thanks for writing this. Like Alison, I love working with an individual business owner and helping him or her grow the business. I do see, however, that managing too many clients is hurting my billing and productivity (and my brain) because task switching is very difficult in any situation, but a real killer in a creative business such as mine.

    • Katrina – do you have a plan to shift your model to attract higher paying clients?

      • Katrina Starkweather

        I’m working on one.

  • Laird Newell

    Michael, this is great insight for someone like me who is just starting up their practice. My ideal clients are small to medium sized businesses, but I was unsure if this was the completely right approach in order to develop and grow my business at a decent pace. Your comment about gaining experince and ultimately some credibility as a start up company makes the best sense for me at this stage. Thanks for the tip.

    • Laird congratulations on making the decision to grow your practice. Happy to see that you enjoyed the article.