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The Three Vital Signs Your Consulting Firm Should Track

If you love data and can gaze lovingly for hours at a well-crafted spreadsheet, then you may hanker for a vast array of meters to judge the progress of your consulting firm; something like an airplane cockpit.

Conversely, if numbers aren’t really your bag then you might prefer the dashboard from the 1962 Morris Minor I drove around England last century: one, lonely meter. (Plus, the speedometer was usually wrong and the car didn’t go fast enough to matter.)

Either way, your best bet is to cast your watchful eye on three sets of data: your consulting firm’s vital signs.

Consulting Firm Vital Signs

The data that you want within easy reach—right next to your phone, pens and stash of Milano cookies, are these three morsels:

Cash Flow

You always want to have a handle on your consulting firm’s cash position, since that determines your ability to pay your staff and yourself, to cover expenses, and to invest in growth.

How to: Consistently track your consulting firm’s year-to-date revenue, year-to-date expenses and projected expenses. (Projected revenue is also helpful.)


Your prospects for future work are the most direct indicator of the health of your consulting firm. No clients = no firm. You can, if necessary, buy capacity on the open market; however, you can’t buy clients and projects.

How to: Set up your CRM correctly and keep it up to date. That will allow you to quickly ascertain the status of your Pipeline in all six stages, from Dormant Contacts to Proposals Submitted.


Your current and projected capacity determines your ability to live up to your consulting firm’s promises to current and prospective clients. If your pipeline is the heart of your consulting firm, then capacity is the lungs. As your consulting firm grows, capacity management becomes crucial.

How to: Every week, estimate your projected utilization for each member of your team for the next 8-12 weeks. (Note that historical, actual utilization is not a vital sign!)

The overall how to: Set up a dashboard that enables you to instantly access your three vital signs, and establish systems to populate your dashboard. Then, assign responsibility for updating the dashboard to an administrator on your team.

Your duty is to check your consulting firm’s vital signs weekly.

Monitor New Stuff, Too

The other data you should monitor frequently, though temporarily, is anything new at your consulting firm. For instance, new staff, new offerings, new systems.

Set in place clear metrics for success and a predetermined timeline for evaluating anything new at your firm. Make sure to establish an end date for tracking and evaluating.

Other Data

Ironically most consulting firm data outside the vital signs are either collected and analyzed too frequently, leading to low-value, administrative overhead, or too infrequently (i.e. never).

Construct a schedule to periodically review other data. For instance, quarterly, semi-annually or annually, you could assess:

  • Time requirements by project, service line or client
  • Profitability by project, service line or client
  • Administrative overhead
  • Revenue sold by each team member
  • Leverage
  • Client satisfaction
  • Marketing plan completion
  • Size and health of your Network Core
  • Partnership effectiveness
  • Strength of key relationships
  • Joy and personal satisfaction (among your team and you)

The list above is by no means definitive. Please add your thoughts: what other data is useful to review?

  1. Eric Zinyengere
    August 12, 2020 at 7:28 am Reply

    We also track % Repeat Work, % Revenue from Referrals, Personal Development of Team Members

    • David A. Fields
      August 12, 2020 at 7:57 am Reply

      Those are all excellent metrics, Eric. It’s important to understand your sources of business, and a yearly assessment of what drove the past 12 months of revenue can help you refine your visibility-building plan (and also your client experience). Three cheers also for tracking personal development. What’s the metric you use on that one?

      Thanks for kicking off the additions to the list, Eric!

  2. Derek F.
    August 12, 2020 at 9:35 am Reply

    As a T&M oriented firm, we track the time that we had budgeted to a project that was not billed. That represents opportunities that we didn’t use to deliver more value to the client.

    • David A. Fields
      August 12, 2020 at 9:48 am Reply

      That makes a lot of sense, Derek, and it also highlights some of the downsides of T&M fee structures for clients and consultants. When everyone’s eye is on the cost side of the equation (hours, money), then opportunities to maximize value slip by unnoticed.

      I appreciate you contributing a T&M-related metric; very useful for quite a lot of firms.

  3. Elaine
    August 12, 2020 at 10:10 am Reply

    I’m a statistician so I’m big on measurement. I have found that I get about 20% sales from just following up with clients who I don’t seal the deal with on my initial contact. This remains my favorite metric.

    • David A. Fields
      August 12, 2020 at 10:16 am Reply

      Goooo statistics! Between undergrad and graduate school, I took three years of statistics courses. On average, that’s, let’s see… uhm… let’s change the subject.

      More importantly, great contribution, Elaine, and I have a question: what is the statistic you’re tracking? Number of contacts until a deal is closed? (Very few, large consulting projects are closed in a single conversation!)

  4. Catherine
    August 25, 2020 at 8:03 pm Reply

    I still need to get on my network core list, David, from the solo practitioner workshop right as COVID hit. Any thoughts on how to comb through and collect my A1’s efficiently? From there, it’s on to building my 300 🙂

    • David A. Fields
      August 26, 2020 at 10:51 am Reply

      Good on you for attending to your Network Core, Catherine. Serendipitously, today’s article will help you somewhat on that front: How to Rekindle Relationships with Your Consulting Firm’s Buyers

      Simply put, assembling and segmenting your contact list takes work. You can’t delegate it because no one else knows your personal relationships or feelings about an individual contact. I’ve found it’s best to quickly sort out all the Cs – people with whom you don’t have a relationship of note. Take the remaining As and Bs and cull out non decision-makers (or weak influencers) who have only a modest relationship with you. You’re left with the starting point of your Network Core.

      Great question, Catherine–thanks for asking!

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