Making it as a business consultant

Sample

Chapter 3  - Lift off: winning the business

Introduction

This chapter concerns what is for most the real sharp end of the role – the process of sourcing and securing revenue earning projects and activities, of a sufficient quality and quantity that will enable your business to be profitable.

It’s one thing completing a business plan with projections and assumptions about income, but now we have to turn it into reality. You could say that this part to of the business development process is all about sales (or call it winning assignments) and that would be partly true, as without some form of sales agreement and contract then nothing will occur. Whilst there is a definite sales process involved, from initial contact through to signing a project contract, selling consultancy is mostly  a refined, nuanced sale, more akin to a conversation over time with some negotiations – rather than a black and white, take it or leave it, approach. Some people are very good at it, and others aren’t – even in the selling profession some people like a pattern, or formula, (ie overcoming objections) whilst others prefer a slower pace of sale, which is to do with building personal relationships. Some people really dislike the process, and will adopt an anti-sales process, whereby they are almost playing hard to get. (This can work well in a market that is very buoyant, or you have a very strong profile in the market, and clients really need your input at a specific point in time.)

There’s also the other end of the process to finding and winning projects - that is getting paid!  There can be some time that elapses between the two events, so it’s a very important part of the process that you monitor who will actually pay you. It can be something as simple as making sure that the person who is about to commission you has the authority to do so, and the company or organisation will have the means to pay you when the time comes. It would not be the first time that a client leaves the company mid-stream, and the consultant then has to justify his invoice all over again to a less than sympathetic new face that never quite saw the need for the project in the first case. Obviously you cannot foresee the client leaving the company, but you can try and mitigate the effects.  

Creating the funnel

Consultants and consulting companies require to create a ‘sales funnel’ or pipeline, by identifying a number of ‘prospects’ out in the general market, and contacting them, some of those will become ‘suspects’ and then eventually a few will become clients. This process of refining is called ‘qualification’ and can be done in many ways, but the first requirement is to create your sales or marketing machine to create the funnel system. The larger the company the more time and resource can be ploughed into creating a sizable sales funnel but in the beginning it likely you won’t have the resources to create a system that brings many new entrants into the funnel.

At the heart of any successful business development system are those two magic words – ‘volume’ and ‘quality’. As the old salesman once said to the new recruit: ‘Son, sales is a numbers game’. The more numbers you have going through and coming at you, the more you will be successful.

There are ways you can compute the numbers you need, but for a small consultancy we are of course looking at not just the sheer volume of leads or referrals (which are much better than simple leads) as there is a dilemma of having too much to qualify and then convert to satisfy as clients. The quality of the prospect is also important.  The business is not a simple ramping up of numbers, to then sell an item with which the grateful customer can then take away, but rather the process of persuading, negotiating and then delivering,  so by definition the busier you are at the front end, the less time you will have at the back. Selling high value services has its own dynamic and that can be simply commuted into raw figures like, if x input converts into y output, so 5x becomes 5 y.

Keeping track - it’s all about the buns!

You should keep track of your funnel by keeping a spreadsheet or similar list which tracks the process, end to end, and this helps you estimate your future income as well as measure the success or other wise of your marketing machine. This could be termed ‘Business Under Negotiation’ (BUNS) and it is where you measure the number of prospects in your funnel against the likelihood of conversion.

For example, in a spreadsheet that vertically lists the total number of organisations  (from the very earliest contacts through to actual project awards) you are engaging with per month:

1) Very early enquiries would have a very small % chance attached on a guesstimate project sum (whatever your lowest average contract value is)

2) Next stage discussions would have, say, a 10% chance of conversion (perhaps on a nominal £20K project value – as it’s early the sizes of the project are not known but the low % discounts that figure to a small number anyway)

3) Intermediate discussions eg where a request for proposal has been received figures become a little  firmer, and timescales and the element of competition is clearer, could be given a 10 – 30% chance of conversion

4) Where a tender has been submitted and a shortlist place is secured could have a 30% chance (if the number on the shortlist is known)

5) Advanced detailed discussions and presentations could have a weighting of 40 – 50 % of the project value, depending on number of shortlist suppliers

6) Project awards would have a 70 - 90% weighting?

Why, may you ask, if you have been awarded the project, that a project awarded does not have a 100% weighting?  What could go wrong? The short answer is everything and anything!  This tool is designed to give you a focus for your future business activities and an approximate forecast of future income. The unforeseen is always going to crop up and disrupt your plans, so it always pays to discount even what seems a copper-bottomed project award with a risk element, for changes, delays, as well as total cancellations. Once you have a legal contract you can be surer that it will go ahead on the terms you expect.  On a review of your year’s projects compared to your BUN forecast you will see that some long chances (which you had as a small %) actually came off while the near certainties did not, but overall the tool works. This tool is especially applicable if you are employing a sales force, or working in partnership with others with a delegated responsibility of introducing new business to the company.

Whilst the long term success of your business will depend on how you organise to create future opportunities from clients who currently don’t know you exist, immediate survival will depend on the currency of your contact book as it stands at the present.

To start your funnel you should never forget to look under your own nose, and start with what you have got – you will have an easier task in explaining and marketing to them than to total strangers. You will often spend an inordinate amount of time for an uncertain reward the more you move along the line between people who have already met you or are know to you, and those that do not know you from Adam

When starting off on the exercise its important not to count anything or anyone out, but simply list all the contacts that you have already in your address book or email list. It is important to have some personal connection with the potential client – it can’t be rated highly enough to be able to say; ‘I am speaking to you because Y suggested that I call you.’

Whatever your business model and no matter what size of funnel you require to create, and how busy you become, you should have a motto like the double glazing salesman’s ‘ABC’ (always be closing) but yours should be ‘ABM’ – always be marketing. The mode of selling might change, but every week you should set aside time to consider your market landscape, your sales and marketing operations, and run a processes through your mind, like:

· Is there anything I should be doing today that might bring me a benefit tomorrow?

· What tasks should I start to do today that will ensure next (month/years) customers are in place?

Sometimes these will be small tasks, sometimes larger ones – depending on time and mood, but the thought should always be there, no matter how crammed your diary is with work. Remember that even the busiest of spells end at some point – and unless you have found the time to invest in these not immediate revenue earning activities, then your income will eventually suffer! (Some ideas are contained in the final chapter concerning developing your business and how to keep your marketing engaged)

It can help to take time out or use the spare time when you attend an event or to take your folder that has development projects with you on the train or plane.

Feast and Famine – the problem of timing

To be successful you also have to be patient, as well as plan ahead, and understand the various ebbs and flows of the business cycle, and of course the business that you are in, which will have its own timescales and nuances. Even with a good funnel, there will be times of ‘feast and famine’,  a  phrase often used  when discussing the issues of being an independent or small consultancy, Periods of intense activity are then followed by a fallow period. It seems no matter how much careful planning you do to avoid the situation, just like the proverbial No. 12 bus, opportunities come along in bunches.  At this stage it’s wise to be aware of the fact that it will happen at some point - it’s a business reality - and don’t get overly concerned by it. If you are too busy, you will doubtless be able to afford the quiet periods. If you are quiet, you can re-charge and prepare for the busy times ahead.

Each business sector has its own cycle, and these sit under the general economic cycle (a concept recently re-discovered by our politicians!) and there’s even a seasonality, which can’t be ignored. Overall, many businesses report that things slow down over the summer months, and pick up again in the autumn, once people’s thoughts move back into work mode after the summer break, and new ideas feel more welcome. The same pick up occurs in spring, after the winter stoppages, when a ‘spring clean’ takes place.  The recruitment industry feels the ill-winds of economic winter early on, as does the building sector, but often are the first out of recession.

This cycle of business activity is obviously true of the academic world, but will also affect travel, and tourism, agriculture, accountancy and many other sectors to some degree. What it can mean in practice is that submitting a proposal for a new concept may be better timed just in advance of one of these ‘seasons’ as it will be more likely to be considered or acted upon. Likewise, a proposal that saves organisations money is best received at the outset of a recession, and one that has the potential to make money when growth resumes.

Time delays, (caused by holidays, conferences, illness etc) can play havoc with your business plan. What at first appears a short process of being notified of a project, and then tendering or pitching (and then hopefully being awarded the work) can be elongated by months simply by a holiday or illness occurring at some point and taking key personnel out of the frame. You should be aware of these hidden or external factors when planning your work as well as your marketing exercises, plus delay any payments to take into account holiday periods. These cycles and delays can actually work for you, in the sense that you can usefully count on something happening to delay a part of the project, which might give you breathing space – whether to compete another project, or to simply have a break yourself!

Are you talking to the right ‘Man’?

You may think that you have got the project in the bag – but are you sure that you have you heard it from the right MAN – that is the one with the money, the authority and the need to award you the work? If not then you are wasting your time and effort. Your qualification stages should always be seeking to clarify, in the most discrete manner possible, that the person who is acquiring your services does indeed have those attributes. Whilst a few questions can easily be devised to elicit the need, the question of who actually has the power to ‘sign off’ and pay is harder to establish. What you don’t want is to be commissioned by someone who through some bizarre mix up in the corporate chain of command thinks they have the budget to commission an external consultant, only to find out that the budget was used by someone else, who was faster on the draw – it’s rare but it can happen. Also you have to factor in the risk, that a) the person will be around long enough to conclude the deal and b) that there is not a higher ranking executive that can countermand his or her decision.

Managing projects – managing reality

It goes without saying that if you are operating at a senior level and want a career in consultancy, you should be familiar with the language and methodology of project management.  Managing multiple projects is now the ‘sin qua non’ of today’s business world, and most senior executives are well versed in handling multiple complex projects with various stakeholders. The detailed study of project management is both a science and art form, and would extend the scope of this book beyond its aims; therefore there is no need to include information which is readily available elsewhere. Suffice to say that projects are strange beasts, they can look different from the point of view of those who observe or work on them, they can grow arms and legs, they can veer off in all directions, they can take over the lives of those who are meant to control them, they are constrained by time but almost inevitably ignore these constraints etc.  

You may be a natural manager and love handling multiple threads, or you may be a ‘one thing at a time’ person – and there are various systems and methodologies that you can study to make your inputs better organised. The main criteria for success or failure however often lies outwith your span of control – on others words external forces can make or break you, so be aware of those dangers!

Most larger consultancy projects are commissioned as ‘programmes’  consisting of multiple projects – and the larger ones will contain many component projects – so the handling of these takes to a different level the skills (and resources) that you need. There is a hefty responsibly in running a multi-million programme, with many risks for your reputation, but also an ongoing business opportunity, so you can not ignore this part of the business. There is the possibility of developing stand alone expertise as a project manager, (even gaining a qualification) which should lead to recognition of your abilities and then the awarding of new projects outside of your original core expertise area.

It’s all in the plan

Once a good plan is in place, a sense of order prevails – at least for a while! Whatever the size of project, clients appreciate a good clear project plan and you should develop your skills in laying out project plans in a clear and graphic manner (many people prefer pictures and diagrams to words)

This would include Gaant charts (that is the typical chart with time on the horizontal axis and resource or activities on the vertical) and these can be produced by spreadsheets as well as other art or word processing packages. Complex charts are best produced by one of the software packages like MS Project or one of its competitors, or you can agree to use a web-based system if you need to share this with other personnel.  Once you have gained a level of proficiency in these applications, there will be many benefits in managing larger projects.

If you have to delve into the deeper, detailed parts of business processes, or systems analysis, then MS Visio is a good program to learn,   and whilst expensive, does have the flexibility in that it can be used for very technical diagrams as well as top level flow charts and organisational charts etc.

You should pick up the language of project management. Prince2 is a project management methodology where the various stages and elements of projects (which include all the resources and personnel) are methodically described, designed, implemented and monitored.

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