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What You Need to Spend to Grow Your Consulting Firm

Building a consulting firm requires a wide range of investments. Let’s walk through some of categories of spending required for you to grow your firm.

Time

It’s close to impossible to build a thriving consulting firm with part-time effort.

Most firm leaders invest 50-70+ hours/week into their firms.

However, investing time into your consulting firm does not preclude you from taking time away from your business. The most successful firm-builders do take regular breaks from their consulting practices to enjoy chocolate shakes and vacations.

Actions:

  • Manage your time expectations with yourself and your family.
  • Block out sufficient time to build your consulting firm.
  • Block out (and honor) your vacation time.

Money

You can maximize your take-home pay in the short-term or you can pursue long-term growth. You can’t do both at once.

To grow your consulting firm, you need to invest cash into:

  • Administrative support
  • Systems/technology
  • Upskilling/coaching
  • Delivery capacity (a.k.a. people)
  • Marketing/Visibility-Building

If you’re not investing or you’re under investing in one of those areas, you’ll stall your consulting firm’s growth.

Action:

  • Set aside funds—probably more than you first think—to direct into each of the five investment areas.

Self-Definition

Perhaps the most difficult sacrifice you may be required to make is your self-definition of what you do as a consultant (the tasks required of you) or what your consulting firm does (your target and offering).

Consultants who are willing to adjust their role as their firm grows and to revise their firm’s focus in response to market demand are able to accelerate the success of their consulting firms.

Action:

  • If your consulting firm is not growing as quickly as you’d like, come to grips with the fact that you may need to change what you do!

Mental Energy

Consulting is cerebral, and building a consulting firm is doubly so. If your reserves of mental energy are low, or you use up all your brain power solving crossword puzzles, sudokus and the Collatz conjecture, you may find your consulting firm coasting rather than flourishing.

Action:

  • Schedule regular times to think about your consulting firm, where you’re headed and how to get there. Pro tip: Hot pizza has been proven to enhance mental energy.

Emotional Energy

Your passion, excitement, enthusiasm, patience, willpower and other emotional stores are also limited. Are you directing the right amount to your consulting firm?

If you devote too much emotional energy into your consulting firm, you’ll neglect other, important parts of your life and you’ll burn out.

Conversely, if your consulting firm doesn’t absorb some of your emotional energy, it will wither.

The optimal balance is where the emotional energy you devote outside your consulting firm actually helps create more emotional energy for you to pour into your consulting firm.

Action:

  • Consciously experiment with where you direct your emotional energy and determine the optimal balance for you.

Relationships

The relationships that helped you launch your consulting firm are, in all likelihood, not the ones that will bolster your consulting firm’s growth. Similarly, the relationships that took you to $5m are not the ones that will be most important at $50m.

That’s true for your external relationships (legacy clients) and internal relationships (staff who no longer fit).

Action:

  • Take a hard look at your client roster and your personnel list. Who do you need to walk away from to create room for your consulting firm’s future growth?

Opportunities

Entrepreneurs hate closing the door on opportunities. Yet, to maximize your consulting firm’s growth, that’s exactly what you must do.

You exclude the opportunity to work for anyone and everyone when you choose a niche for your consulting firm’s target market.

You close off numerous opportunities when you narrow the scope of your offerings.

Ironically, that narrowing of your focus is exactly what’s needed to sustain and accelerate success for small consulting firms.

Actions:

  • List all of your consulting firm’s opportunities in terms of markets, offerings, targets and types of clients.
  • Then, explicitly exclude most of them so you can focus on the few best opportunities.

What other investments/spends have helped you to grow your consulting firm?


4 Comments
  1. Michael
    September 15, 2021 at 9:28 am Reply

    Great article.
    The section on relationships also applies to your firm’s offerings or lines of business. The offerings that got you to 5M may not be the ones to get you to 50M. In fact, they may hold you back by taking too much of your firm’s resources and focus. As with legacy clients and legacy personnel, do you have legacy offerings that do not align with your future firm?

    • David A. Fields
      September 15, 2021 at 12:02 pm Reply

      That’s a very, very good point, Michael! That also ties into self-definition. Consulting firms tend to define themselves around their offering–but today’s offering (or entire service line) may need to be dropped for your firm to achieve your vision.

      Thank you for the excellent addition to the idea.

  2. Christian Milaster
    September 15, 2021 at 1:32 pm Reply

    As always, David, inspiring, pragmatic, spot on. Takes 2.5 min to read but could take 2.5 years to get to the 80% of full implementation. Or 2.5 months.

    What other investments have helped me to grow your consulting firm?
    1. Investing in my self-awareness and understanding my personality quirks, then embracing them and optimizing systems and approaches for me.
    2. Using other successful people as inspiration, not as a blueprint for imitation.
    3. Learn to delegate. And practice it.

    • David A. Fields
      September 15, 2021 at 1:44 pm Reply

      Dang, Christian, that’s good! Investing in understanding yourself and then doubling down on the parts of you that are your strengths is an excellent approach. I also love the idea of using others as inspirations and sources of possibility rather than blueprints and dogma.

      And yep, delegate!

      I glad you took the time to make the discussion richer, Christian. Much appreciated.

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