The other day I was discussing business expansion with a couple of our consulting-company clients. Like many consultants, their business efforts were focused 100% on getting new clients. But is that the only way to think about the consulting business? Is that model always sustainable, especially in constantly changing economic conditions? Are there other ways to think about Business IT Consulting growth?
Today’s article begins a multi-part series that looks at the many options to expand (or stabilize) an existing consulting business. We’ll be discussing how to do more with the clients you have and provide practical suggestions to help expand your Business IT Consulting business.
But first, let’s look at a “traditional” consulting model:
- Start the business
- Get a client, or several clients (Optimally, steps 1 and 2 are reversed. Always better to start a business with clients, then to go looking for them later.)
- Deliver service and bill as much as possible
- Get paid
- Do more projects with the current client and/or get new clients
- Repeat over and over again
A simplified list to be sure, but that is more or less what happens in the day-to-day life of many consulting firms. What happens if things are slow and it’s taking a long time to book new clients? What if your pipeline isn’t full with ready and waiting clients, checkbooks in hand? Or, what if your consulting business is struggling and just needs to stay afloat a bit longer while finalizing other opportunities?
Enter “business expansion strategies”
A business expansion strategy is really anything that ultimately improves your bottom line, or keeps your bottom line from sinking lower in the case of troubled times. A short list of available expansion techniques includes
- Expanding existing client relationships (today’s topic)
- Expanding existing service offerings and adding new ones
- Creating mobile apps, web apps or traditional software
- Creating information products eBooks, physical books, online courseware, webinars, etc.)
- Creating membership sites
- Other “traditional” business strategies, such as acquisition, partnerships, buying stakes in other companies and the like
Expanding existing client relationships
Of the many available expansion options, “expanding existing client relationships” is generally the easiest. Simply put, you’re getting more value from your existing client investments. New client acquisition and maintenance costs are a major portion of the consulting profession, so it makes sense to get the most out of your existing relationships. As with any business strategy, there are advantages and disadvantages:
Advantages and disadvantages of expanding existing client relationships
Disadvantages of expanding existing client relationships
Expanding existing relationships is generally very beneficial. But like anything, there are downsides. Here are a few:
- For personal or business reasons, the relationship may not e in your best interest, or the client’s. As a BIG Results Consultant, you always have to ask yourself “what’s best for the client?”
- Sticking with existing clients can tie up valuable limited resources. If your resources are tied up with existing projects, you might be forgoing (opportunity cost…) other more lucrative or interesting projects.
- You risk professional stagnation spending too long in the same environment. However, if the client is large and/or diverse enough in its environment, then working with some clients can be more dynamic than working with many smaller ones.
Advantages of expanding existing client relationships
- Mutual working relationship — both parties are well known to one another.
- Paperwork is (usually) already in place.
- Payment systems are (presumably) in place, and money is flowing from client to consultant.
- Money continues to flow. New clients have substantial setup costs and depending on your billing arrangement, may be 45 to 90 days or more into your work delivery, before receiving payments.
- Mutual understanding and existing working relationship can speed up the value delivery.
- The more work you do for existing clients means the less you have to try to do for untested, unknown clients
- It’s generally easier to identify new opportunities within existing client relationships.
Tips for expanding existing client relationships
Here are a few tips for expanding existing client relationships:
- Deliver massive value. That is the BIG Results Consulting way. Always, always, ALWAYS think about how you can deliver “just a little more” value to the work the client is already paying you to do. Yes, some clients may take advantage of this — but if clients take too much advantage without reciprocation, do you want to be be expanding your relationship with them anyway?
- Ask lots of questions, including my favorite “have you thought about…”, or “have you considered…?” questions.
- Look for the win/win opportunities. What are the obvious work streams that would benefit both you and your client? For example, if your client is considering datacenter consolidation, consider offering an impact analysis. Whether or not the client chooses you or your firm to participate in the project, the analysis provides additional work for your firm and is a genuine service to the client.
- Whenever possible, work on getting projects that involve multiple departments. Most enterprise-grade IT project these days involve multiple departments, whole divisions or even multiple companies. You want to be well-known as the “go-to person” (or company) throughout the company. If one division of the company slows down, there are often others that have new project needs.
- Look for the low-hanging fruit. Examples include things such as minor feature enhancements and creating automation scripts to further automate or optimize work you are already doing.
- Keep your ears open and “to the ground;” this is for two reasons:
- to identify new opportunities
- to act as an early warning system if there are any client-side issues which may affect your project or longevity…
- Answer any and all questions, quickly and in as much detail as possible. If you don’t have the answer, volunteer to “get it as soon as possible” Put another way, you WANT to be that indispensable “go to person”
- Follow all of the BIG Results Consulting best practices for site conduct and project delivery (coming soon!) Set the bar high and reach for it each and every day.
Summary and and next steps
In this article, we’ve discussed some of the challenges of being dependent solely on a steady stream of new clients. I’ve suggested some action steps to expand or stabilize your consulting business through your existing client base. In Expanding your coaching business without new clients – Part 2 of the series, we’ll discuss a new strategy for expanding your business — expanding service offerings and developing new ones! Stay tuned for Part 2.