To achieve the next level of success with your consulting firm, you have to know what inflection point is next on your route (or, where you want to stop and optimize). Let’s briefly walk through the common stages on your consulting firm’s growth journey.
Transitions are hard. When you think about a typical, personal life journey it’s easy to remember (or imagine), the pain and setbacks, missteps and do-overs at each defining inflection point:
You live with your parents → You live on your own → You (successfully) live with a partner → You have kids in the household → You’re an empty nester → Oh no, your kids live at home again?!
Some gateways to a new stage of life are inevitable. None are easy. You shed a fair number of tears during the lead-up to each inflection point.
A consulting firm’s path to success differs from a personal journey in (at least) three ways:
- The typical stages of a consulting firm’s progress are less widely known
- Consulting firms’ inflection points are more predictable
- You can stop at almost any point, optimize your consulting firm’s current life stage, and say, “That’s good enough for me.”
10 Stages of Consulting Firm Growth
All but the last of the consulting firm inflection points are optional. However, the order of them is important, and if you try skipping a stage you’ll inevitably suffer painful setbacks.
- Do anything for anyone who will pay
- Established a consistent, target market*
- Established a consistent offering*
- Developed a reliable, revenue-generation approach that works for the founder(s)/owner(s)
- Offload delivery of projects*
- Offload management of projects*
- Offload revenue generation*
- Distribute management of parts of the firm (e.g., offices or service lines)
- Fully offload management of the firm
- Step out of the firm
Each stage represents a sticking point that’s surprisingly difficult to escape. Doing more of what you’re doing now or incrementally improving performance won’t lift your consulting firm off its plateau.
To break the grip of your consulting firm’s current stage you have to change what you do and how you do it. And you have to walk away from some of what’s made you successful historically.
For instance, early on you’ll find you have to forego projects with banks, hospitals and lumber yards in order to become the go-to consulting firm for patisseries (i.e., to focus in on your sweet spot).
Later in the game you may find that you, personally, have become exceptional at delivering certain projects, yet you must offload delivery to other contributors for your consulting firm to continue to grow.
There are proven strategies to push past each sticking point. Some involve organic growth, others accelerate progress by acquiring or divesting assets and capabilities
There are also proven strategies to optimize your consulting firm at each stage of growth.
What doesn’t work is flailing around blindly, without a good sense of what’s next in your journey.
Another predictably fruitless approach is trying to jump ahead and skip stages. For example, adding offices before you have effectively offloaded project management is a surefire way to submarine your consulting firm.
As a consulting firm leader, your responsibilities are to know where your consulting firm is and what’s next, and to remember that every inflection point represents a challenging hurdle. Missteps and setbacks are common.
What’s your consulting firm’s current sticking point?
Since you kickstart progress by acknowledging your next step and publicly committing to it, post a comment sharing where you are and what’s next for you.
Text and images are © 2023 David A. Fields, all rights reserved.
This was an extremely helpful framework (as always). I immediately recognized where I was getting stuck. Thank you for the advice and the comic.
You’re not alone in finding the framework helpful–firms of all sizes have been commenting that the 10 stages have clarified where they are and where they need to go next.
Thanks for your feedback, Jill. It’s greatly appreciated!
Very helpful. I am somewhere between 3 and 4, recognizing that 4 can’t quite happen until 3 is really fully done. Do you have any advice on transitioning between these stages? My target market is locked in narrowly and successfully, yet the projects that come to me are diverse enough that it’s hard to outsource their components effectively – and the volume is not high enough to get full time employees.
Olga this is my issue exactly too! Thanks for articulating it so well. Now what? 🙂
Ruth, check out the article I suggested to Olga. Let me know whether that gets you started in the right direction.
Olga, you’re in a common position–particularly if you’re running a solo practice. The important exercise for you is to listen to the market. The market will tell you what your consistent offering should be. (Interestingly, it will also tell you when a project you’ve won is a one-off aberration.)
Learning how to listen to the market, and what, precisely, to listen for takes some time and guidance. Take a peek at this article and see if it helps.
Thanks for posting your experience, Olga!
awesome article & image!
I’m a cartoonist/consultant – clients hire me to turn their boring business plans into one-page vivid visions so everyone is on the same page with what they’re building.
Kinda stuck on Stage 2 because some people love my style and some think “business vision boards” are too woo-woo/spiritual or whatever.
Thoughts on developing a more consistent target market since my offer is clear and process is repeatable?
Valuing your fun & informative perspective,
Eric, if enough clients are hiring you to transform their business plans into vivid vision, then look for the common industries/demographics. That will point you toward your market (assuming you can reach more contacts in that market).
If you’re not winning enough business with your current offering, then you’ve started the process upside down–with what you do rather than what the market wants.
Always, always listen to the market. The answers are outside the window, not in the mirror.
Thanks for posting your situation, Eric, which will be helpful for many readers!
Excellent stepped outline for growth and each of the inherent boundaries!
I appreciate your feedback, Tom. It’s amazing what emerges when you marinate in an a particular industry for a couple of decades!
Yes, these stages or phases of firm growth are very important. Also important is the roles of key members and partners. One framework is that expressed years ago by David Meister in his book on The Professional Services Firm. I recall three roles — that of Finders, that of Minders, and that of Grinders. I have used that framework for years on a per project basis. Also, in my later years now I have deployed #10 –Step out of the firm with an addition — as part of travels doing interviews with various individuals in various fields and feed results as market research and development and as leads — this leads too…
Would welcome hearing more about Finders, Minders, and Grinders.
Debbie, the Finder/Minder/Grinder split is an age-old look at consulting firms as folks who find business, folks who develop IP and folks who deliver the work. It’s a good, basic framework, and worth including in the toolkit when thinking about growing boutique consulting firms. For a solo practice, you’re the finder, the minder and the grinder! You gradually offload some grinding until, at Step 5, you’ve almost entirely stepped out of delivery.
Thanks for the question!
Debbie — you could also look at theories such as Theory X and Y and Management System 1 and System 4 — System 4 being team based Participative Management and System 1 being the old fashion so called Boss Mangement or Authoriatarian Management Style . To get consulting clients, one aspect is how a firm is structured and how the members work inside the firm and in support of the Finders who work outside a firm finding problems and opportunities, developing relationships with the individuals external to their firm for reasons of problems identification and clarification so that proposals can be developed and a consulting firm can then teach and/or be part of the implementation of solutions resulting in greater success in the marketplace for the firm and the firm client served. A finder is also a “rainmaker” and has the skills and mindset of a turnaround manager and leader. Success does assume the finder, the minders, and the grinders work together as team. The FMG system referred to, having the 3 key roles has been developed into an AI framework called Marketing Information Communications System referred to as MICS and also MICES — the E being AI features and standing for Expert Systems.
Mallory, the finders/minders/grinders idea is a great, old standby and turns out to be a useful mechanism for setting up comp systems too.
Also, while the finder/minder/grinder explains the activity of a consulting firm, it turns out to not describe the roles particularly well. Hence, I tend to look at Leaders, Thinkers, Doers and Supporters. In most small firms, Leaders do finding (Biz Dev) and minding (IP development). There’s little room for pure Thinkers (technical experts). Doers are the analysts and consultants that grind out the work, and supporters are the (typically under-developed) administrative staff.
Congrats on stepping out of our firm, Mallory. You’ve worked a lot of years to reach that point!