If you want your consulting firm to win more clients and deliver higher profit with less labor intensity on your part, where should you invest in the coming year? Popular candidates include development of virtual offerings, lead generation programs, and dark-chocolate covered espresso beans.*
There’s likely a more valuable investment.
Before you read my recommendation, shoo your inner skeptic out the door and prepare to fend off plentiful excuses.
And to help you mentally prop your mind open, remind yourself of the two most important activities your consulting firm performs; i.e., the Consulting Cycle:
Your consulting firm completes other tasks, of course, that keep your firm’s Consulting Cycle spinning. All those other tasks comprise your Infrastructure.
Strong infrastructure frees your most important assets (i.e., you, other leaders and consultants) to spin the Consulting Cycle to new heights like a fireworks girandole.
Your goal is to equip your consulting firm with a massive bias for action.
You achieve that goal by removing any friction that impedes your consultants’ power to win engagements and provide massive, referral-worthy value.
That’s why, if your consulting firm is like most small practices (i.e., under $100m), you should invest much more in your infrastructure.
More specifically, you should invest in low-level staff whose responsibilities wander the border between administrative and consulting tasks.
Small consulting firms consistently under invest in administrative support for their consultants. Perhaps because many consulting firm leaders take (misplaced) pride in announcing, “We operate a very lean organization. We minimize our overhead costs.”
Yes, many of your corporate clients are bloated with administrative overhead. Your consulting firm is not.
A decent rule of thumb is to support every dollar of consulting revenue with 10-15 cents of direct support staff.
In other words, a consultant in your firm who delivers $500k in consulting revenue should receive a $50k-75k support resource.
(Direct support staff excludes other infrastructure costs such as your bookkeeper, legal counsel, etc.)
You’ll find the 10-15% ratio is difficult to maintain—not because the cost is high, but because your consulting firm’s productivity will expand so quickly.
Your well-supported consultant will become 30-50% more productive. Meaning, she can deliver (or sell) $750k in revenue.
Very small consulting firms often resist investing in low-level support. Larger consulting firms forget to backfill as their low-level resources mature into full-fledged, value-producing consultants.
Low-level staff works particularly well in small consulting firms for three reasons, only one of which is obvious:
- You offload the many, many non-productive activities from your most valuable resource(s).
- You onload many new, creative, value-producing activities. It’s amazing the possibilities and opportunities an extra pair of hands creates.
- You enjoy the sidekick effect (explained in this article), which generates much greater discipline, resilience and stick-to-itness.
- (Bonus reason – the low-level support can monitor essential supplies and keep you hopped up on cocoa products.)
In the U.S. you can find excellent people with the right skill sets for $50-75k/year. Often less. You can also split a full-time person between two consultants who collectively deliver $500k.
Bottom line: if you want breakthroughs in the coming months, invest in support for your consulting staff and yourself!
What has your experience with support staff been for your consulting business?
Text and images are © 2024 David A. Fields, all rights reserved.