Can you make millions as a consultant? Is a consulting business profitable?
Of course! Many successful entrepreneurs have been able to work as a consultant and grow their business to a million-dollar enterprise. It takes hard work, determination and some help along the way, but it's certainly possible.
With the right growth strategies in place, a solid work ethic and networking, you can grow your consulting business to bring in $1 million in a year. These experts tips will help you to reach your earning potential and business goals.
Raise Your Prices
If you want to build a million-dollar consulting business, you have to know your worth and not be scared to raise your prices. When you command a premium price tag, you establish the expectation that your work is worth that cost.
While raising prices is often scary for business owners who think they’ll lose or price out clients, it’s one of the only ways to bring in more money to your business. There are only so many hours in the day. And it’s important to realize that earning a million dollars as a consultant is a small drop in the bucket when you recognize that the U.S. consulting market is $255 billion a year.
According to Abir Syed, CPA and ecommerce consultant at UpCounting, “There are two approaches to increasing your revenue as a consultant, which you can use in tandem. The first is to increase the amount you bill for your time or work that you do yourself. The second is to increase your capacity by using a team to deliver the work to clients.”
Truly successful business consultants take a multi-pronged approach to making their business grow. They raise their prices, make the business more efficient and hire a team to increase their ability to work with more clients.
Leverage Technology for Flexible Capacity
Time and money are the two most important commodities for growing a business. You can raise your prices, but you can’t create more time. That’s where technology comes in. Paige Arnof-Fenn, founder and CEO of Mavens & Moguls, says, “I have learned to help small businesses to be flexible and open-minded so we can keep working together during the crisis and create more flexible capacity going forward over the next year as the economy reopens.”
While you can’t create more time, technology can help you to become more efficient, which can free up time and working capacity. Technology you can leverage to get more efficient might include:
Hiring a virtual assistant to handle administrative tasks
It’s All About the Client
A mistake many business consultants make is to assume that consulting is about them. In actuality, it’s all about the client. When you’re creating a plan for a new consulting client, you have to personalize the plan to them, not to you. According to Ansh Gupta, founder of Empire Crafter, when done right, a consultant’s “recommendations address the client's issue, not the consultant's approach. Their marketing materials focus on the client's difficulties, conditions and goals, not the consultant's strengths. They even refuse projects if it is in the client's best interest.”
When you make your consulting business all about the client, you increase your value and make it easier to raise prices and bring in more profit.
Network by Listening and Offering to Help
When most people think of networking, they think of talking. Arnof-Fenn has a different perspective: network by listening.
“Make a list of the movers and shakers, people you admire and prospects; ask a few smart open-ended questions; then sit back and take notice. They will be more than happy to tell you what is on their mind. If you listen to what they share with you, there will be plenty of opportunities to help them.”
When you help people around you, they will remember. Helping others makes them more likely to hire you as a consultant and to recommend you to others that they know. When you’re networking, don’t just talk; ask questions and listen.
Automate or Outsource Specific Tasks
As you grow your consulting business into a million-dollar profit-generating machine, time becomes a premium. To save time and make your business more efficient, you must automate and outsource as much as possible so that you can focus on the most important tasks that only you can do.
Tasks that you should consider automating and outsourcing include:
Administrative work such as answering emails and scheduling appointments
Automation tools and hiring a virtual assistant are affordable ways to make your business more efficient. When you automate tasks, you get to focus on helping clients and making money for your business, which boosts your bottom line.
Hire a Team
Charging higher prices and saving time by implementing efficiencies can take you a long way towards growing and improving your consulting business. But, according to Syed, if you really want your consulting business to grow, you must hire a team.
While paying consultants is an expense, having team members to work for and with you will raise your overall profitability. Each employee you hire increases the number of billable hours your company has and the number of clients you can take on at one time. All this adds to your bottom line.
Productize Your Offering
Hiring other consultants to work with your clients might sound easy, but there’s a very important step you must take before you hire and train anyone. You must productize your offering. “And to do that effectively, it's best to narrow down your offering to clients so that the deliverable is somewhat consistent and repeatable from one client to the next,” says Syed. “This can make it easier for you to hire a team to deliver the work because you'll more easily be able to train them if the work isn't always a custom solution that only you can deliver. Productizing your deliverable makes it much easier to scale and is the best way to get to millions.”
Growing your consulting business is all about growing your community. “This advice is not fancy and does not require big budgets, but it does take time,” says Arnof-Fenn. “It is a smart investment to get this right. Authenticity is the key; it has to be and feel real for it to work, I think.”
She also says, “Activities like hosting a podcast or webinar, speaking at a conference when possible, writing articles, building your following on social media all contribute to increasing your awareness with potential customers and building your credibility with a larger community.”
Contribute to Outside, Similar Organizations
When consultants think about establishing themselves as thought leaders, they think about building their brand through their own blogs and social media channels. But, this requires regularity and consistency, which is difficult for many consultants to stick to.
Arnof-Fenn offers a secondary option. “If you are not committed to blogging at regular intervals (weekly/biweekly/monthly), instead of trying to start your own blog or newsletter, try contributing regularly to existing well-trafficked blogs in your industry or newsletters of like-minded organizations reaching the same target audience as you.”
You can establish yourself as a credible thought leader and consultant through guest posts on other people’s sites without having to keep up with regular social media or blog posts.
Increase Your Credibility and Build Trust
A big problem that high-priced consultants face is clients who try to negotiate down the price, which can devalue the project. The best way to avoid negotiation is to show clients your value by building trust.
Ansh Gupta recommends the book the Executive's Guide to Consultants by David A. Fields for great advice. Gupta shares a piece of knowledge he took away from this book: “Fees are usually disputed, so rather than simply explaining the fee or limiting the scope, accept the fee issue and ask, what else? This will raise further questions and fears. Soliciting all objections before addressing any can help you avoid defensiveness and handle them in order of difficulty. This creates time, trust and impetus to overcome fee concerns.”
Arnof-Fenn predicts that “the most trusted leaders and brands will have a big competitive advantage in the new normal that evolves in a post-Corona world. Employees, customers and clients will remember who treated them well during the crisis and they will be rewarded with loyalty from earning that trust during the bad times. The current crisis has provided a stage for our political and business leaders to rise to the occasion. We have learned that it is about touching people in meaningful ways, which may mean being less busy, not more.”
When you build trust with clients, you build loyalty and receive long-term, high-quality relationships with clients in return. This has never been more true than now.
Seek Out Business Mentors
One of the most important strategies for growth as a consulting business is to seek out business mentors. Mentors held you to see potential business problems and to come up with solutions. Mentors are motivators because they’ve already been there and made the mistakes. By working with a mentor, you can avoid the mistakes while still getting the growth.
Growing your consulting business into a million-dollar generating machine is a daunting prospect. But, with a focus on increasing prices, providing high value to clients and becoming more efficient to save time, you can create a high-earning consulting business.
Page is a freelance content marketing writer with experience writing about small business, the future of the workplace and health. She also operates a weekly email newsletter where she shares advice on living an authentic, intentional life. When not writing, you can find Page traveling, fostering older cats and working as a sexual assault advocate.