"Although business plans don't appeal to everyone, especially if you've never expected to fund your business capital, they can be a key factor in launching your business from what it is now," says Jennifer Leake, certified management consultant and founder of Consultants Gold Group. Consultants Gold Group is an online group that specializes in helping consultants run their projects successfully.
That's why, when you start working, Leake offers the following tips for developing a business plan:
4 Tips for developing a business plan:
- Write it down! "Writing it on paper takes a lot more thinking than just getting it into your mind," says Leake.
- Make it easy and simple, so you can come back to it sometimes. Leake says: “Don't make it too long or too complicated.”
- Spend most of your time defining where you are and what gets you in the place to do it. "If you can't express what you're selling clearly and succinctly, you won't get clients," says Leake.
- Don't frame your plan in front of a mirage: "Your business plan will be better if you get feedback and more likely to take action if you get a review from mentors, coaches, or success participants,” says Leake.
But formulating a business plan for your new consulting company does not mean that you have to rely entirely on a regular template found on the Internet, but rather that you have to spend your time focusing on the factors that raise or destroy companies in your field.
“Drafting a business plan for a consulting firm sounds straightforward because there are so many who call themselves 'consultants,' but it can be really difficult for many reasons,” says Michael Harmens, director of the financial advisory firm Finance Forward in Dallas.
That's why Harmens says you should focus on three key areas when you flesh out your business plan:
Focus on three key areas of your business plan:
1. Value Proposition:
Answer this question: What is your value proposition?
"Thousands of former IT programmers are now social media consultants," Harmens says. "What work do you do that thousands of other people don't?"
He says that the key factors to building a consistent value proposition are making decision makers happy that they made the right decision, and this is done in three ways:
- Service guarantee insurance.
- Building opportunities through a clear methodology, or
- Specialize more specifically so that it is easier for you to raise your reputation.
"The challenge with this guarantee is that large companies don't usually buy on this basis and small companies generally get a service guarantee as a tacit acceptance of fault," Harmens says. “The clear methodology and approach take some time to build, but it pays off for potential clients who don't know you. A narrow circle of focus helps identify potential investors more clearly, and a high reputation helps clients be satisfied with their hiring decision.” he says.
"Understanding your target market is the most difficult planning process to do," Hermens says, but developing an understanding of the nature of competition is essential, especially when it comes to market entry and pricing strategies as well as the specific industry or segment of the market trying to solve the issues. He also says, “Insight into the way companies are entering the market in your field and the fundamentals on which companies are competing is essential. For strategic consulting, it may be the recommendations of previous clients or knowledge sharing that attract clients' interest, and in legal consulting, your name and your own credibility is a huge selling point." In other words, according to Hermens, determining how you will enter the market and how much it will cost your clients, as well as your knowledge of specialized terminology and the problems that this field is trying to solve are all essential in planning your consulting business.
Beth Corson, a founding member of Your Funding Key Advisors, suggested one approach, which is to select a few areas and then outline the size and type of business you would like to do within those areas. "Instead of the miserable approach of picking up any clients you find in front of you, you should be selective and organize a clear roadmap. Years from now your client schedule should be close to the plan you are creating now. By working with similar clients in a particular field, you can create a level of expertise that makes it easier for you to perform better and thus get new clients because you understand their unique challenges and how to overcome them.”
2. Marketing:
Answer these questions: How do you market your consulting business? What tactics do you apply to approach decision makers to assess what you are offering?
There is no doubt that in order to elevate your consulting business you need to market your skills and experience to potential clients. Although it can be difficult when you are a sole proprietor, as the time you spend on marketing you don't pay for it on time, you can hire an outside company to help you with your work. Your new-found project may find this process very expensive, so the solution to this problem is to find smart ways to promote what you are offering to the market.
One convenient way to do this is through public speaking, which can be very effective in promoting your knowledge and perspective on challenges in your field, Hermens says.
As for the other option, it is to establish a partnership with other companies that may provide complementary services to the services you provide, and this is a skill that can help you build your expertise in new areas, but sometimes you have to independently develop your relationships with your clients if you want to grow your company more and more.
3. Staff:
Answer these questions: If you have employees and you take into account the reality of the project you are working on, what is the best way to benefit from them? Are you planning to pay them hourly, per project confirmed, or monthly salaries?
“The issue here revolves around asking yourself: How do you pay to grow your revenue? Consultants who are developing their reputation can write books and charge an hourly rate but still cannot serve two clients at once. Expansion allows your consulting business to thrive as the projects your company takes on increase.” Hermens says. The main point here is to think about how to organize revenue in line with the expenses you provide to your employees and how to pay them to make sure that they are always there when you need them through questions you ask yourself such as: Do you compensate your employees with monthly salaries and risk stagnation in projects? Or maybe you pay them on a project basis only when they're working and then you risk their presence if you get a new contract?" Hermens also says, "The goal here is to structure your revenue in line with the expenses that you provide your employees with from the start as your consulting business develops. Once your business is large enough, put key employees on a monthly payroll with performance bonuses, only then will they stay with you and learn the strategy you follow in entering the market and your methodology in dealing inside and outside the company.”
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