Are you ready to scale and grow your consulting business?
You’ve got a steady stream of projects. You’re well known in your industry. You may even be thinking about hiring someone to work with you.
This is a time when many consultants feel like they are starting to hit a wall (or maybe you’re already smacked your head against it and are feeling a dizzying pain).
You’re maxed out in terms of billing. You can only work so many hours in a day. And you don’t have time to work on your business — only in it.
You’re at a place where you want to grow your consulting business — exponentially, not incrementally.
But if you want to grow and scale your consulting business — to $1M (or even far beyond that), then I’m going to offer you different tactics, strategies, and the mindset it takes to grow your consulting business — the right way.
By the end of this article, you will learn…
- The three different consulting business models and the pros and cons of each model (and which is best for you)
- How to go from a solo consultant to building an elite team of consultants under you
- How to use assistants, processes, and systems to automate and scale your consulting business to new heights
- 3 Consulting Business Models For Growth
- Advantages & Disadvantages For Each Model
- Delegating & Using Assistants For Growth
- Systems & Processes For Automating Your Consulting Business
- Developing A Growth Mindset
- Get Help Growing Your Consulting Business
Different Models for Scaling Your Consulting Business
There is more variability in consulting businesses than you might think.
This realization is important for growing your consulting business. Choosing the right model for you will help you grow your consulting business, and enjoy the process while doing it.
That said, there is no “best” consulting model. It’s subjective to what you want.
- Do you want to work closely with your clients, on interesting, complex, and rewarding projects where you solve big problems?
- Have you dreamt about managing a team of consultants and running a consulting firm — enjoying the perks and responsibilities of being a Managing Director or CEO?
- Are you desperate to escape lengthy sales processes and complex proposals, and instead package your expertise into a product?
Before you choose how you grow your consulting business, you first must consider what it is you want.
Think about how you’d like your day-to-day to look like in your business, and how you’d prefer to go about growing your business.
The three models below should help you get clear on what’s the right fit for you.
The Consulting Firm Model
The firm model is your classic consulting firm.
You hire consultants to deliver projects, usually billing by the hour or by the day. As the firm owner, you take a margin of the profit.
The firm model is a highly scalable consulting business model that’s favorable to growth.
When you’re running a consulting firm, you aren’t always going to be working closely with clients on consulting projects. You can, but that’s only one part of it.
You’re also going to be focused on growing your firm — winning more projects and hiring more consultants. Thus, your income is separate from your time spent delivering on projects, and it often grows with each consultant that you hire.
Here’s what your team might look like as a consulting firm owner:
“I have an office manager who takes care of all of my invoicing and billing and also sets up the initial interviews if they need additional resources. We’ve got another person that helps manage the staffing organization. I’ve got the usual accountant, attorney, financial adviser, and a banker who helps with loans because a lot of these companies don’t pay for 90 days, so we have to deal with that. Then as far as people on the ground, I’ve got about a dozen people on the ground at different clients who are doing mostly project management work, but there’s a number of designers, product people, and a finance person. I got three finance people in one of our clients.”
-Barc Holmes (Learn more about what it’s like running a 7-figure consulting firm in our interview with Barc)
When you employ various consultants and other people to run your business, you get to focus on what you do best.
Whether that’s working on high-value projects or building up your business, the firm model is fantastic for growth — and also for selling once the firm is big enough.
In this example, Navelent, you can see a team of consultants. This is an example of a consulting firm. Their website is typical to what you should find in an effective consulting website — one focused on thought-leadership, case studies, and making it easy to contact them.
This is an important distinction. As a consulting business owner, you’re focused just as much on your own business as you are your client’s. You are responsible for developing new business so your consultants have projects to work on.
The more projects you get, the more consultants you can hire, and the more profit you can generate.
The Productized Consulting Model
The productized consulting model revolves around packing your expertise into products.
These products can take the form of information products, courses, programs, books, subscriptions, etc.
What you’re doing with this model is putting your consulting services into a package and sticking a fixed price on it.
There are no customized proposals, you often avoid lengthy sales cycles, or complex pricing agreements. You put a price on your expertise, package it into a product, and introduce it (marketing is critical, of course) to the marketplace.
Consulting Success is based on the productized model.
If you’re a consultant — a subject matter expert — there’s nothing stopping you from putting what you know into a product.
If you are used to working very closely with your clients on custom consulting engagements, it can feel a bit unnatural.
But It’s entirely within your ability to do. You can start with something simple like a discovery offer.
Example: TIG Brands
TIG Brands is another productized consulting business. They offer a set “stages” consulting that is broken down, step-by-step — into a series of productized consulting offers.
Elliot Begoun, founder & CEO of TIG Brands, could easily offer custom consulting with his expertise for emerging food and beverage brands.
Instead, he’s built a process and system for helping up and coming food and beverage brands grow into bigger, more established businesses. He’s broken it down into stages and individual productized offers.
He’s also able to teach his own employees on his process so they are able to run a program themselves. This is a highly scalable model and way to grow your consulting business.
(Listen to our podcast with John Warrilow and learn how to productize your consulting services)
Customized Consulting Model
The customized consultant is one that I’m very familiar with. I ran my own consulting business for decades.
With this type of business model (common among solo consultants), you’re customizing your solution to each client.
I was able to grow my customized consulting business into a highly profitable business.
Many of you reading this article are running this type of consulting business.
When you run a consulting business using this model, you have all the freedom in the world. You get to choose everything: who you work with, how much you charge — and you can customize everything you offer exactly how you like it.
If you’re running a business on this model, that also means you’re dealing with certain challenges: wearing many different hats at once, the feast or famine cycle, and profitable pricing so that you can earn more without having to work more.
Another big challenge is that you’ll end up feeling overwhelmed.
You have to do a lot yourself. Every new project involves some sort of recreation (like when writing proposals), because you don’t have the benefit of systems and processes of the productized model.
Perhaps the biggest challenge of customized consulting business is that they are the toughest to grow.
As you will read below, driving aggressive growth is not for every consultant. Perhaps you want to stay small and create a nice lifestyle business for yourself. If that’s you, then the solo consultant model is perfect for you.
But don’t think that you cannot grow a solo consulting business — because you absolutely can.
Example: David C. Baker
David C. Baker, Founder of ReCourse, is a great example of a successful solo consultant. He runs a highly profitable consulting business and works on a variety of different projects with a variety of different clients.
Could he grow his consulting business: hiring more consultants, training them to do his work, get a nice office space, etc?
But that’s not the life that every consultant wants to live.
You can tell from his website that he’s carved out a nice niche for himself. He gets to work on what he wants, who he wants to work with, and wherever he wants to do it.
This degree of customization and control is not as easily found in the other models.
Advantages & Disadvantages of Each Consulting Business Model
Every consulting business model can grow — and each model comes with its strengths and weaknesses.
Let’s explore some of the strengths and weaknesses of each one to help you find the one that best suits you, your lifestyle, and your goals.
The Firm Model
- You can hire professionals to handle parts of the business that you don’t want to handle
- The business can run without your day to day involvement once it is established
- The business becomes an asset that if you choose to sell will have greater value than if it was just you running the business by yourself
- Payroll — you become responsible for paying the salaries of your employees every month
- Heavily focused on business development — if you’re into doing consulting work, you might be doing much more business development (sales) than consulting work
- The consulting firm model does have other’s relying on you and you must act like a manager and leader every day
The Productized Model
- A great way to scale your consulting business as your income isn’t directly related to your time spent billing
- You become a master at your craft as you’ve developed proven systems and processes developed from doing the same thing over and over
- You create a valuable asset that can be sold and doesn’t require your day to day involvement in most cases to operate
- Some find it boring to offer and provide the same service/product over and over
- Often requires more clients (volume) to reach high revenue level and some consultants experience a dip in their revenue when they first start this model
The Solo Customized Model
- Considered to be very much a lifestyle business
- High-profit margin and the ability to ‘eat’ all the income you take
- Doesn’t require management of other people
- Some find it hard to stay motivated and productive when they are the only person in the business
- Difficult to sell because all revenue and clients rely 100% on you
- You tend to take less time off because you feel like you don’t earn unless you’re working (which is often true)
These three consulting business models are only a start. You can mix and match different elements of these. As a solo consultant, you can build products. As a firm owner, you can work on high-value consulting projects or retainers.
Don’t think you’re “stuck” in a single business model.
In the sections below, you’ll learn how a consulting business running on ANY model can drive growth and scale through outsourcing and building systems.
Delegating and Using Assistants To Scale Your Consulting Business (& Work Less)
In Perry Marshall’s 80/20 Sales and Marketing, he talks about how 20% of the work you do is responsible for 80% of your results.
It’s not a rule. It’s a physical law. And it’s observable in all aspects of your business.
Think about this: there are a few tasks that you do that are worth far more than the majority of the tasks you spend your time on each day, week and month.
For at least one minute a day, even a $20/hour employee is worth nearly a thousand bucks an hour. Which means a $200-per-hour employee (doctor, lawyer, business owner) is worth ten thousand dollars an hour.
You increase your income by focusing on all these activities and find some other way, or some lower-paid person, to do the low-value activities. You move resources from the left side of the curve to the right side.
-Perry Marshall, 80/20 Sales and Marketing
What’s it mean that a $20/hour employee is worth “nearly a thousand bucks an hour” one minute a day?
Imagine that you hired an assistant to do your direct outreach. Many of the emails they send and the calls they make won’t garner a response.
But there’s that one call — that one email — that gets a response and helps you set up a meeting with a decision maker.
If you turn that meeting into a $50K consulting project, then the minute your assistant spent writing that email was easily worth $1000.
Landing a call with a big decision maker? That’s a $1000/hour task that a $20/hour employee accomplishes.
It’s with this 80/20 principle where you start with your consulting businesses growth plan.
To scale your consulting business, you must…
- List the tasks you do in your business
- Sort the tasks from lowest value to highest value
- Identify which lower-value tasks can be done by someone else
- Hire someone to do those lower-value tasks
This is the essence of delegating and using the assistance of others to drive growth in your consulting business.
It’s an essential step of how you can scale your consulting business:
When you do this, you can spend 3 hours a day on your highest value task — instead of 30 minutes. You won’t be caught up with your lower value tasks because someone else will be doing it for you.
And the ROI will be clear — the time spent working on your more valuable tasks should pay for the contractor many times over if you’ve sorted your tasks out in the right way.
To help you visualize how you might do this in your business, give this exercise a try:
List out all the tasks you do in your business. Tasks like…
- Sales Calls
Write down each and every task you do in your day to day.
Then, turn it into a spreadsheet, like this:
You’ll put a check next to the tasks that you do (the high-value tasks), and a check next to the lower-value tasks that you should look to outsource.
Having a visual reference of the tasks you can hire someone to take of your plate is the first step before hiring your first contractor and outsourcing your first task. It’s one of the most critical steps to growing your consulting business.
This is how you move your most important resource, your time, over to the high-value tasks.
And it’s a big part of how consultants grow their business — by creating more time to focus on those higher value tasks.
How do you make sure the freelancer you hire can actually perform the tasks you need?
Using Systems and Processes to Automate Your Consulting Business
Think about the tasks in your business that you do frequently. You probably have a set of steps — or a process — for doing said task in an efficient, timely manner.
Instead of having to think about what to do to accomplish the goal of the task — you go through the steps and get your desired result.
To create processes for your consulting business, you want to list all of these tasks — and then write out those exact steps you take to complete them.
When you do this, you’re laying out the systems that make up your consulting business. They go from abstract and in your head to solid, tangible steps. When you’ve written them down, you have a reference for the processes that make up your business.
These are commonly known as Standard Operating Procedures (SOP).
Once you’ve written standard operating procedures for your business, you’d be surprised how much easier it becomes to run your business.
You spend less energy completing these tasks because you follow the steps.
Formalizing your standard operating procedures will open up new doors for outsourcing. You can hire contractors to carry out your Standard Operating Procedures and run other parts of your business.
It also makes it easier for you to find the software that will do certain tasks as well.
When you do hire your first contractor, you’ll have your SOP for the task you’re hiring them for.
For example, if you’re hiring them to do research on prospects, write down, in detail, the exact steps you would take to do this yourself.
This standard operating procedure — your system for completing this task successfully — makes it easier for your contractor to do it right. And it also makes it easier for you to teach them.
Moving forward, you’re both able to refer and improve upon the process by tweaking and improving the system.
Building and perfecting these systems make up the foundation of a growing consulting business. Whether you’re a solo consultant or looking to productize, having systems and processes in place make growth possible.
Developing A “Growth Mindset” for Your Consulting Business
To grow your consulting business, you must actually want it to grow.
Many consultants might think they want to grow their consulting business, but growing a consulting business is difficult.
You’ll have to try to new things. You’ll have to push yourself outside of your comfort zone. And you’ll face the risk of failure.
Consultants that successfully grow their business are hungry for it. They take action to achieve it.
Top-performing consultants don’t wait for it to happen magically — they make it happen. They pick a goal, a timeframe, and take the steps they must in order to hit their goal.
Developing this mindset for growth —of taking action — requires rubbing up against your fears.
You’ll be attempting many things you’ve never thought you would ever do: hosting a speaking engagement, writing a book, publishing a course, building a team, managing payroll — all of these are some examples of what you might do to take your consulting business to that next level.
Growth requires doing things differently — and doing them better.
Finally, growth requires investing in your business. Whether it’s in new tools, staff, marketing, or coaching — you must learn to invest in your own business. To take calculated risks. To develop a mindset of abundance, not scarcity.
If aren’t willing to invest in your own business, you’ll find it very difficult to grow your business.
There are people right now who’ve made it to exactly where you want to be.
What’s it worth to you to invest in them? To be able to pick their brains on any problem you came across? To have access to someone who’s dealt with your same challenges and solved them?
Those are the type of people you’ll invest in if you’re serious about growing your consulting business.
Growth is more than just a set of marketing tactics or a “hack.”
It’s a mindset.
To learn more about mindset and developing a mindset for success, read my bestselling book: The Elite Consulting Mind
Get Expert Help To Grow Your Consulting Business
Consultants who are serious about growing their business aren’t afraid to invest in people who can help.
They learn from the experts who have been there, done that, and can lead the way with their experience.
That’s what our coaching program is for. We’ve built up our own consulting business using all three models over time – so we know the benefits and challenges of each. And we’ve helped countless firms, productized consulting businesses, and solo consulting businesses all grow their consulting businesses.