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Surprise: Small Clients Can Deliver Big Payouts in Consulting

In consulting, if you want to earn big, you need to think big. That’s true. In consulting, if you want large projects you need to work with large clients. That, surprisingly, is not true.

Let’s start with an important reminder:

Penny Thinking: if you’re constantly worrying about the number of hours you’re working on your projects, then you’re playing a micro game and your results will bang against a low ceiling. That’s “Penny Thinking.”

Dollar Thinking: If hours never cross your mind and you’re occasionally worrying about the number of weeks you’re devoting to one client or another, then you’re playing in a bigger game and pulling down bigger revenue.

Goldmine Thinking: If hours, days and weeks are basically an afterthought while you’re consumed with providing massive value to clients, then you’re in the hunt for global domination… or at least jumbo-size consulting revenue.

Or, as my stomach reminds me: if you’re picturing one slice of pizza, you get one slice of pizza. When your gustatory imagination knows no bounds, you could end up like this chow hound:

Moral of the story, Part 1:

Stop thinking pennies; adopt Goldmine Thinking.

Good so far. Except this: consultants who focus on small clients often remind me that their prospects tote around small purses that can’t accommodate big, juicy goldmine-worthy projects.

I’ve always agreed with that sentiment and, personally, built my consulting firm to serve $1+ billion clients. The Willie Sutton logic of “that’s where the money is” was undeniable.

Well, gather ’round the cash register and listen up: A few years ago, I took on a client that was under $25 million in annual sales and, to my delighted surprise, they have contracted over $100k of consulting with my group every year since. Wow. Was this an anomaly or did I need a mind shift.

Mind shift. In the past couple of years I’ve added numerous clients who sign six-figure projects despite (or because of) topline annual sales below $10 million. Wow-wow.

In fact, triple-wow.

  • Small companies—say, those under $25 million—outnumber large, $1+ billion companies by a factor of 6.25 bazillion-to-1. (For those of you still thinking in the weeds, the actual data is about 2,500-to-1).
  • The decision-maker in a small company is often far easier to reach.
  • The competition from big-name firms and embedded incumbents is often far lower.

But, if a company is so small, will they pony up for a sizable project? As a friend of Nemo (the fish, not the captain) said, “That’s a pretty big but!”

 

Every $10 million company is wrestling with at least one million-dollar problem. Most are plagued with even larger problems (e.g., how do we double to $20 million without breaking?). That million-dollar problem supports a six-figure project. Voila.

Yes, larger companies include many, many large issues on their to-do lists; however, the urgency driving each one is lower, and the internal staff available to tackle those problems is greater.

At the small company, the million-dollar issue is the priority. It’s a fresh, hot Frank Pepe’s pizza waiting for you to sink your teeth into.

Moral of the story, Part 2:

Small companies will pay handsomely to solve big problems.

You may still be hesitating, thinking, “I don’t work on those big, juicy, million-dollar problems.” Well, my friend, why not? What’s stopping you? Absolutely nothing other than Penny Thinking.

Small companies in every industry and every market are facing myriad, major challenges. Your mission is to be open-minded enough to listen for the opportunities with your Goldmine mindset.

What has your experience been with small clients?


 

13 Comments
  1. R. Shawn McBride
    April 19, 2017 at 7:30 am Reply

    I love how you are thinking! Yes, yes, yes! I agree.

    I also think there is something about being genuine about who you serve and delivering tremendous value and not worrying about the size of the client — focus more on the value delivered.

    • David A. Fields
      April 19, 2017 at 7:42 am Reply

      You’ve made an outstanding point, Shawn. As long as we are sincere in our interest in our market (and that market has a need, as discussed in this article), the size of the client can become irrelevant. Thanks for highlighting that idea.

  2. Paula Brancato
    April 19, 2017 at 8:08 am Reply

    Totally agree. I work exclusively with small privately owned companies. They will pay top dollar and treat you as trusted advisor. They really appreciate your work and skill and you can have a huge impact on customers, employees, the community and several generations of owners. The personal side of this kind of consulting is much more important, however. People own businesses to shape they as they desire. Often the work is shifting the clients mindset from a lifestyle business to true value creation. In addition, the work can be very rubber meets the road and hands on. Big concepts and frameworks alone won’t fly well here. You have to help with implementation often finding conflicting voices in the room. I like it! Reminds me of my own Sicilian family. But not everybody does.

    • David A. Fields
      April 19, 2017 at 8:13 am Reply

      The impact we can have on small companies–which can be tremendous–is, as you point out, another great reason to take on small clients. Plus, as they grow you can grow with them.

      One reason I used to avoid privately owned companies (which includes most companies under $25 million) was management’s decision-making process: the “Should I do this project or buy a Tesla” mentality. Once I realized they just need professional guidance through those decisions, the target became more attractive.

      Thanks to you and your Sicilian family for adding to the discussion, Paula.

  3. Anatoli Naoumov
    April 19, 2017 at 9:34 am Reply

    Company size is not the determining factor in producing lucrative and challenging engagements.

    The question, imho, is not what’s the prospect’s size of sales, but rather what’s the prospect owner’s size of mind. Companies grow up to the size of their owner’s minds. Find a company smaller than it’s owner’s mind (aka capable to double or triple or 10x) and it’s a consulting gold mine.
    The only way to find such leaders in the making, that I think of, is to engage prospects into strategic level conversations about their businesses. (I can’t say I know a sure-fire way of doing this.) David, comments? Other ideas / tools, technics?

    • Paul Osborn
      April 19, 2017 at 9:57 am Reply

      Anatoli, you completely nailed it with this one – “Companies grow up to the size of their owner’s minds. Find a company smaller than it’s owner’s mind (aka capable to double or triple or 10x) and it’s a consulting gold mine.”

      • David A. Fields
        April 19, 2017 at 10:02 am Reply

        We have an Anatoli fan club on this one! Not only is it important for us to use Goldmine Thinking, we should always be on the lookout for business owners who are Goldmine Thinkers.

    • David A. Fields
      April 19, 2017 at 9:58 am Reply

      “Owner’s size of mind” is a brilliant phrase, Anatoli, and describes the situation well. As far as identifying those business owners whose dreams outpace their ability to create the reality, the path is straightforward, if not quick:

      • Make yourself visible to people in that position. The more narrowly focused you are in terms of industry, the more likely prospects are to see you as a credible resource.
      • Meet as many business owners as you can in person and engage them in Right-Side Up conversations
      • Truly attend to them; i.e., listen, reflect, engage and contribute. The better you are at that, the more likely they are to reveal the gap between their aspirations and their reality.

      The Five Marketing Musts, especially speaking, can help you in the first step of that path.

      • Anatoli Naoumov
        April 20, 2017 at 10:36 am Reply

        Thank you, David. Industry experience seems to be perceived as an indicator of credibility. I have been pitching to a optimization of refrigeration plant to a dairy processor and referred to our results with bakery of similar size. No dice: “We only hire vendors with experience in dairy industry.” Gotta find a way to crack this.

        • David A. Fields
          April 20, 2017 at 6:46 pm

          Anatoli, you’ve hit the nail on the head. In surveys of executives who engaged consultants, the #1 attribute they look for is industry experience. We can wish that weren’t so while pounding our chests and claiming our process expertise makes up for lack of industry knowledge, but it doesn’t change the truth.

          So, how do you get into a new industry? 1) You build deep, trusting relationships that grow so strong the transcend the industry barrier; 2) You subcontract; 3) You work on an issue that decision-makers acknowledge to be industry-agnostic.

        • Anatoli Naoumov
          April 21, 2017 at 9:24 am

          Thank you.

  4. Don Garvett
    April 19, 2017 at 12:55 pm Reply

    All good points. Here are some secondary, but valuable, supplements.

    I can only handle one big assignment at a time, but have sufficient bandwidth to blend in others of lesser magnitude. I seek to simultaneously engage a mix of clients of diverse company size, project size, work-scope and geographies. That is helpful in three ways.
    1) When a big project ends, I have a valley rather than a deep canyon in terms of work flow.
    2) Smaller projects and clients often afford more flexibility in timing and geography/travel for me.
    3) Enhances learning, skill sets and reputation.

    • David A. Fields
      April 19, 2017 at 2:25 pm Reply

      Don, a mix of clients and projects can definitely make independent consulting an easier path. Your three reasons for a diverse portfolio make great sense. It sounds like you blend Bread & Butter projects with larger, high-margin engagements. One place I would gently push back is on the statement that you can only handle one big assignment at a time. That sounds like an opportunity to look at approach, systems, labor intensity, client expectations, etc. Just an idea.

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