The Art of Building a Profitable Consulting Firm
It is amazing how many of us overlook and undervalue what we do. We all make the assumption that we are not doing anything different, that we what we have to say isn’t of value, or that what we know is common knowledge. I see this a lot with social media and digital marketers. The consulting budgets are low, the clients are stressful, and often times ungrateful.
It doesn’t have to be this way. How do I know? Just ask 27-year old Sam Ovens. Sam is a self-made millionaire and his business? Consulting. Sam was able to stand firm in his belief in himself and in his abilities. So much so that he built a wildly successful consulting firm after dropping out of college.
So, what’s the trick? Sam has a few bits of advice for all of you digital marketers and consultants out there that choose to undervalue your product and ultimately damage your career and bottom line.
Here are some tips from Sam:
1. Understand Your Service Offerings
This piece of advice from Sam is one that we have heard a million times over, but largely ignore. In fact, many people think that this is an obvious one, but it isn’t as easy as it seems. If you want to be a successful consultant, then you need to clearly define what you offer and how you work. Avoid being ambiguous and make sure that you set expectations with your clients. Many people are so focused on the sale that they forget to clearly outline the project to avoid issues with clients later down the road.
What do I mean by avoiding problems? Any consultant can tell you that one of the biggest issues with client work is when clients have a different idea of what they are paying for than you do. Take the time, outline what you offer, and make sure to be clear before you send that first bill.
2. Follow the 30/30/30/10 Rule
What is the 30/30/30/10 rule? This is the rule for saving your income and making sure that your firm always has cash on hand for a rainy day or cash to pay Uncle Sam. It is broken down like this:
- 30 percent of your income goes into your pocket
- 30 percent goes back into your business
- 30 percent is sent to the government
- 10 percent should go straight into your savings
Sam Ovens and other successful owners in service businesses would agree that this is a formula for setting up your firm for financial success. Do yourself a favor and avoid bleeding your firm dry. You never know when a client could leave or close their doors, and you do not want to be stuck when that happens. Also, planning for your taxes is insanely important. Never leave out the tax man when planning your firm’s finances.
3. Trust Your Team First
Many consultants and business owners make the mistake of assuming that their client is always right and consistently putting their team in the hot seat. It is important to trust your team first. Make sure that they know you have their back and would go to war with them if you needed to. Finding great talent is not easy and keeping them is even more difficult. Never make assumptions, put your people first, and in return, they will put your business first in their life too. This is an easy to avoid mistake that can make all of the difference. Never underestimate the power of a strong team.
4. Don’t Fear Failure
Sam Ovens is a master at this. Before his consulting firm became successful, he lived through three failed business ventures. His advice? Get outside of your comfort zone, talk to people about your business, welcome feedback, and learn from your mistakes.
As entrepreneurs and digital marketers, we are constantly taking risks to drive large rewards. We can assess the level of risk and make smarter choices if we reach for feedback. Networking, fearless conversation and confidence in what we are trying to achieve are all necessary.
Will we fail? Yes, at times we will. It is not our failures that define us, it is the way we handle them. Just as Sam Ovens was able to take a leap and leave college, to fail at three consecutive business ventures while living in his mother’s basement, before finding career success, financial success, and creating an unconventional life that he loves.