Learn 3 Tips for How to Make Money as a Consultant When First Starting
So often we reach a point in our professional careers where we feel somewhat bored or limited or maybe frustrated for other reasons. We begin looking around at what other possibilities may exist for us, but we aren’t quite sure what those next steps look like. I’m here to share that anyone with a professional background, whether corporate or entrepreneurial or even a ‘street MBA’ like I have can turn that extensive business experience into a rewarding and profitable consultancy. This post shares three tips on how you can make money as a consultant - even if you’re just starting out in your transition.
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Over the years, I’ve built several successful businesses and enjoyed each of them in their season. When I made the decision to close my last company, I was unsure of how to move forward. I had a network of friends who were CEOs of pretty successful businesses, and they messaged me recognizing my ability to market and grow in such a unique way, asking if I might be able to support them with some of the marketing and growth strategy in their companies. From there, my fractional consulting business was born, and I’ve been in love ever since!
I thrive on the fact that there is always something new, always something interesting, and always new problems and challenges making the work intellectually stimulating. Recently I’ve been able to partner with some nonprofits which has also been very rewarding from a mission standpoint.
The revenue potential in consulting is limitless because as you become more confident in the services you provide and the results you help to create, you’re able to demand a higher price because of the experience you bring to the table.
Three Tips for How to Make Money as a Consultant
As a consultant, you have the ability to help your client flatten their learning curve. In other words, through your work you help bring them to a result that is more efficient, easier, and less expensive compared to them figuring it out on their own. The better you become at helping your client get results, the more you'll make money as an in-demand consultant.
Understanding Your Client’s Needs
Taking the time to understand who you help and how you help them, is the first step in becoming equipped to market yourself and your services in a language that resonates with your target audience. While this may take more time upfront, once you get going you'll find yourself further along the path to becoming a successful thought leader.
No matter what your field of expertise, there is a demand for consultants in that area: IT consultants, business process consultants, HR consultants, business strategy growth consulting, marketing consulting, and many others.
Within that you can niche with the types of businesses you help to support. The large consulting firms like Accenture or Price Waterhouse target the multibillion dollar companies, but who is helping the average seven and eight figure business owners? This niche still has a robust operation that needs help, but there are few options in terms of providing the consulting services they need.
Remember business owners in this category have typically outgrown masterminds or group coaching. They aren’t really seeking the group approach to problem solving at this level and are really seeking someone who can come in and go in with them shoulder to shoulder as a thought partner and get a new result that they couldn’t get on their own.
Communicating Your Value to a Business
This follows closely on the point above about knowing your client’s needs and how you help them, but really go deep into understanding what it is that your ideal client is struggling with and what’s keeping them up at night. I typically refer to this as their “2am problem.”
For many business owners at this level, understand they aren’t usually asking themselves how they are going to figure it out, but more often than not it’s wondering who in their world knows the answer.
Seven and eight figure business owners are in a place where they have outgrown trying to figure it out everything on their own. Instead, they know they need to find the right person to help them get to the next level of revenue. They are used to looking for a very particular person to help them solve their problem. So for example, they may be subject matter experts in a particular field, but not necessarily in sales or marketing or in revenue growth. This is why they rely on others, either within or outside of their organization, to provide them with the right solution so they can fuel their business for future growth.
If you want to make money as a consultant, it’s so important to remember this and that you need to reinforce this to the potential clients as you speak with them. Communicate the value you’ll provide setting it up in contrast of them trying to figure it out on their own - the amount of time they’ll spend, the expense that it will take, the potential mistakes and recovery time, along with all the frustration that comes along with not having the right person on their team helping them come up with the solution versus them having you alongside them guiding them to the solution with ease and confidence.
For many business owners, hiring you to the degree to which you are confident and communicating the results is a much better value proposition than all the time and resources they’ll expend going about it on their own.
Finding Your Sweet Spot in Business
I’m often asked if new consultants whether or not they should niche down to working with a particular client, especially when they are just beginning their consultancy business. Of course, as with anything, there are pros and cons to both sides. The key is finding the sweet spot in business: a place where they need your services and a client you love working with.
If you aren’t sure whether or not to narrow down your focus right away, try with a single message for a very particular business owner. I recommend to my students in my incubator that they seek out working with a business owner that might be generating revenue between $1-$20 million in revenue.
Why this range?
Typically, this level of company is not at a point yet where they have a board and long sales cycle. They may be in a position to need a consulting service, but they aren’t so large that they give off a sense of feeling overly ‘corporate.’
For me, this is my sweet spot client because I find they are vastly underserved and there are very few solutions for them in terms of people to help them. LIke I referenced earlier, they aren’t really being supported through group programs and masterminds, but they also aren’t the target market for the large consulting houses. These clients have the means to invest in consulting services and are very interested in growing their company. Form your messaging around how you can help them reach their goals efficiently and effectively.
How to Make Money as a Consultant on Demand
At the end of the day, once the clients see you as the go-to person and retain your consulting services, then it’s your job to get them a win. Ideally, you’ll do this for them within 30 days or less, even if it’s a small incremental improvement from what they're currently doing. It’s entirely possible to build a recession proof consulting business and continue to make money as a consultant even during an uncertain economy. Remember, you want to be seen as the reason their business is growing, and that starts by developing a relationship that is based on mutual trust.
From my own experience, and even from that of my students, I’ve learned that it can be very rewarding to be the person that a business owner comes to rely upon for wins and revenue growth, and success. It positions you to make more and allows you to command premium prices, ultimately leading to better clients and situations that continue to stimulate you intellectually.
It only follows that the more wins you create for your clients, the more they will refer you to their peers. Remember business owners hang out together in CEO groups, networking environments, and when they begin discussing their growth, their friends want to know their secret. They will be eager to share your name and that you’ve been focused on revenue growth and really moved the needle by creating an environment which led to a fast result and momentum. This flywheel effect will cycle leading to more and more referrals and full with a waiting list.
If this sounds like something for you and aren’t sure how to get started in consulting or how to create your first offers, click here to get access to my free training on how to package your expertise into a money-making consulting offer.
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