Prepare your consulting practice for the new year by identifying the specific, granular actions that will grow your firm.
But what should you ponder to determine those actions that will make next year waaay better than this year?
When evaluating the success of their year, consultants often review metrics like revenue, profit per partner, utilization and leverage. However, these statistics don’t provide useful direction on how to adjust, transform or maintain your consulting practice.
That’s why I examine a broader array of performance yardsticks. It’s the difference between evaluating your baking prowess on whether your family thinks your cookies are good (which doesn’t tell you how to make them better), versus whether they’re sweet enough (yup), moist enough (yup), or chocolatey enough (definitely not).
Below is a subset of the metrics I consider, along with the benchmarks I use to direct improvements in my offerings, processes, and priorities.
[Note, I divide consulting practices into three sets of activity: Winning Project, Delivering Value, and Infrastructure. For this article, I’m only including a subset of the Winning Project metrics.]
What percentage of clients from the past 24-months signed on for at least one more project?
What percentage of this year’s revenue was derived from three or fewer clients?
What percentage of this year’s revenue came from new clients?
What percentage of the opportunities that surfaced turned into closed projects.
(Count every conversation in which a potential client mentioned a specific need, not just times you submitted a proposal.)
How much did your Network Core grow?
On average, what percentage of your time was devoted to marketing your services?
What percentage of your planned marketing achievements did you accomplish this year?
(i.e., # of articles, # of speeches, etc.)
How much did your average project size increase vs. a year ago?
Bread and Butter Work
What percentage of your year’s revenue was low-margin, “bread and butter” work?
Text and images are © 2020 David A. Fields, all rights reserved.