In this series, Calvert Markham, former Director of the Centre, provides basic guidance on starting and running a consultancy business. First you have to decide what exactly you are selling!
There used to be a regular cookery column in Punch magazine, which advised those starting their own restaurant, ‘It may be that your signature dish is lamb en croute, but after a while you get tired of making it. You stop doing so at your peril, however, as this may be the very reason that people come to your restaurant.’
Let’s assume that you are setting up as a sole practitioner, i.e. it is just you in the business. What is it that you are offering – your signature dish? When you start your own consultancy business, you are cashing in on your expertise and experience to date, and using this to provide the focus for your services, e.g. the client sector, the type of issues that you will address, the geographies where you might do this. The thing about focus is that it implies denial: not only what you will do, but also what you won’t. When working within an organisation you can work at what might generously be called the ‘periphery of your expertise’; on your own you must focus on your core expertise. So heed Punch’s warning: starting your own consultancy business reduces the variety of work you can undertake.
As with any business, you need to be clear about what exactly you are selling. If I promise to sell you a ton of salt to be delivered next Monday, you have a pretty good idea of what you are going to get – although why you want a ton of salt may be questionable. If I say I’ll deliver some consultancy services starting next Monday, then what you are going to get is far less certain. Consultancy is one of the least tangible products and, as we will see over this series, this can be both a help and a hindrance.
The first step therefore is to package your expertise and experience into a communicable offering. It’s often helpful to define consultancy services as verbs rather than nouns: what they do as well as what they are. So overhead cost reduction sounds more appealing than zero-based budgeting.
A communicable offering can be embodied in a brochure. Even though it may be unlikely that you are going to print hard copies of a brochure, drafting one is a good exercise in clarifying what your service is, who it is likely to appeal to and the benefits of engaging your consultancy help.
A good test of the communicability of your offering is whether, having explained it to a member of client staff, they could then explain it to one of their colleagues. So when you have drafted your brochure, test it on a friend or business contact to check whether it is clear.
You can get inspiration for your brochure to see what your close competitors have done by using the mystery shopper technique. Imagine that you are an organisation with a need for the type of service you offer; put yourself in the position of an executive looking for that help and search the internet as they may do. You should find consulting services of the sort you are offering and from their web sites see how they present themselves.
One final thought: as a sole practitioner, it can be difficult to separate the service from yourself. For example, newcomers sometimes are embarrassed to discuss fees as they confuse these with a sort of salary discussion. For this reason, it can be helpful to give your consulting business a name, so it is the business that is being engaged rather than you. You can also take this a step further by giving a standard offering a name; this is useful if you want to create income other than from time-based fees – a topic we will cover in the next article.
For more on this and other related topics, see Calvert’s book Mastering Management Consultancy