Before venturing into becoming a consultant, it is worthwhile to spend some time researching your competition, learning their strengths and weaknesses, and defining your niche. These steps are some essential business skills that you must apply in order to succeed.
Investigate the Competitors
The first step in your quest to figure out the competition is to identify them. If needs be, sit with the yellow pages, and have a look how many potential competitors there are in your area.
Then, spend some time finding out about them. Speak to their clients, make direct enquiries, have a look at their websites. Whatever helps you to develop a clear picture of what they offer.
Once you have that information, it becomes easier to tailor your consulting business’s services and differentiators to suit the situation.
How To Assess Your Competition
There are five basic areas on which you should assess your competitors:
- Reputation – what do their clients, and the industry as a whole, think of them?
- Consultant quality – are there any stand out employees or partners in the company? Published experts or consultants who provide training courses etcetera may draw clients to that concern.
- Measurable results – what results has the company in question delivered. This is closely related to the first two points, and companies with an excellent track record will obviously have clients clamoring for their services.
- USP – just as you need to define your unique selling point, your competitors already will have. Find out what special services, or unique advantages, they offer their clients.
- Pricing – this is mentioned last, because a top consulting firm generally does not compete on price. It is, however, well worth the effort, as a new consulting business, to know what the lower, average and top end of the pricing scale is.
How to Apply the Competitive Analysis
Once you have assessed your competitors in detail, based on the above-mentioned criteria, your task is to figure out how you can compete.
Do you have an advantage in terms of reputation within your industry? Are you a published author or have you written for industry publications? Maybe you have been a trainer in a specific field.
While it is unlikely, when starting out, that you will have measurable results, there may be items of your professional history that apply, for examples, changes you implemented within an organization you worked for, that yielded significant results.
USP may be one of the easiest items for a new consultant to compete on, along with price. Find out what your competitors offer, and at what price, and offer a better service, at a slightly better, or even the same, price.
Choosing Your Niche
After you have assessed the competition, and decided on these critical factors, it is time to decide what niche market you will serve.
The niche you choose is often a determining factor in the success of your consulting business, and the top factors that should be used to choose your niche are:
- Your personal experience, skills and expertise. You need to offer top quality services, only possible if you are an expert in your chosen field.
- The size of the niche and the amount of money available. There is no use choosing a niche where companies have substantial funds, but there are very few potential clients. Likewise, there is no use providing services to a niche with plenty of companies active, but with very little capital available!
- Limited competition. The less competition you have, the more likely you are to find more, better projects.
- Accessibility. You need to be able to market your services within your niche. Make sure you will be able to make the necessary contact.
By knowing your competition, and applying these concepts, you should be well on your way to establishing a successful consultancy. Do your homework, and reap the rewards.