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6 steps for fast-tracking profitability in your consulting practice

[Written for Replicon blog]

Advice aimed at entrepreneurs and small businesses tends to be heavily product-oriented, but in reality the majority of US small businesses fall under the “Professional, Scientific, Technical, and Other Services” category (excluding public administration) — comprising a total of 8,268,206 small businesses.

Of course, operating your own consulting practice brings with it a host of unique challenges — the value of your “product” can be difficult to quantify, project demand naturally fluctuates, and opportunities for automation and scaling can be limited, among other things. For those looking to get profitable as soon as possible, we compiled a few important steps to take when starting out:

Be intentional with your niche

Waiting for demand to set a focus for you muddles your message, delays your ability to brand, and often won’t give you the clarity you want or need anyway. Take the time to determine exactly what your passion is (and where that intersects with your experience and expertise) and market yourself with that niche in mind from the get-go.

If you’re intentional about establishing what you offer, and who would best benefit from your services, you’ll be able to craft far more effective messaging for your target audience, and design your business with the ideal customer base in mind.

(Actually) differentiate yourself

Consultants can feel like a dime a dozen — even within your own specific niche — so take the time to familiarize yourself with the immediate competition, and determine a few tangible ways your value prop differs from (or improves on) theirs.

Invest some time in social media

Maintaining an active, professional, and informed social media presence takes little time, costs nothing, and helps show prospective (and current) clients that your business is both knowledgeable and current when it comes to the niche you operate in.

Set up a LinkedIn, Facebook, and Twitter page (and consider Google+ as well for SEO purposes), and then spend some time once a week finding relevant articles, studies, etc. to post to your accounts. Automate this process by getting a free account on Hootsuite.

Track projects to keep scope creep at bay

The consulting world is increasingly leaning toward fixed-bid projects, and you don’t want to find yourself losing money by falling victim to the dreaded scope creep. Find a system that works for you to track projects in real-time, so you can anticipate project or cost overrun, and communicate with your client about the changing scope (and thus possibly deadline or cost) of their project as soon as possible.

When starting out, maintaining excellent relationships with clients is paramount to the success of your projects and ultimately the profitability of your firm, so remaining prompt and transparent with project communication and updates will ensure that you remain on the same page, and on their good side.

Add value outside of project work

Part of maintaining good relationships with clients means positioning yourself and your firm as more than just a service provider. Steer away from a purely-transactional relationship by finding creative ways to engage clients outside of project work. Hosting an after-work event for clients, introducing different clients to each other to build partnerships, compiling a regular newsletter of industry-specific news, articles, and studies relevant to your clients, and contributing to a client’s community outreach initiative (financially or otherwise) are all unique ways to prove yourself to be a trusted and valuable asset.

Step up your follow-up game

Don’t let your follow-up fall to the wayside — or worse — get forgotten in the fray. Successful consulting firms invest in customer relationship management systems (CRM) to keep up with client preferences (among other things), and ultimately improve their conversion rate and close more deals. Small firms starting out might not initially feel that such automation is necessary, but it’s better to imbed these processes in how your business operates sooner rather than later, and doing so will help you keep a consolidated database of client information.