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Running a successful consultancy business involves processing work efficiently and understanding exactly what’s happening in the business and why. Here we list 7 tips that will add value to any consultancy firm.
1. Know your “Work in Progress” and Forecast to ensure resources can deliver
It’s critical to maintain quality of service to your clients. Running a good consultancy businesses is all about resource management and you need to have sufficient resources to serve your clients well. Managing your current ‘Work in Progress’ workload along with having a pulse on ‘upcoming opportunities’ and their likelihood of materialising are critical. With a good understanding of your existing resource capacity and future resource requirements, you will be able to make good decisions around appropriate staffing levels.
Additionally having a grasp of your Work In Progress and forecast also allows marketing to do it’s job to ensure an even work flow throughout the year. This will help you avoid boom/bust cycles. Improved systems and processes will help you level out your workflow throughout the year.
2. Value your scope commitment
Valuing you scope commitment to your clients along with ensuring scope is managed well are key. If your client has asked for A, B & C you need to ensure you task for these items and have them completed. If the client starts asking for D & E without covering the cost of this (as not shown in our proposal offering) you then start devaluing your time and profit.
This scope creep is key to avoid. If an architect requests your services and resources to deliver a tender in a month and they delay this upon reward by 2 months this then impacts upon the resource management forecast negatively.
3. Be clear on the deliverables and ‘deliver early’
Be clear on the deliverables required by the client and the project team and ‘deliver early’. Having a system to manage key due dates (sub-tasks) within a project and ensuring these are met are very important.
If your key due dates are slipping you will impact upon other consultants receiving needed information to complete their scope which in turn creates a chain reaction of unreliability. Be ahead of the curve… scope tasks and tick them off ahead of schedule.
4. Review your experiences and your clients
Reviewing your experience with your clients is important. It’s easy to get caught up in the work without focusing on the cash flow and finance side of your client relationships. If you have a few key clients who are notorious for the following:
- Late Payment – always overdue on invoices
- Typically not loyal and will award you on low fee (your competitors thus win when their fee is lower than yours. This is not a mutually beneficial business relationship. If they don’t go to support you then it may not be worth it.)
- Always request fee proposals with little notice.
If you are experiencing above have a look at how much revenue this client is providing along with their ‘days late in payment’ and work out if the opportunity cost of keeping them as a client is greater than losing them. ‘Close one door… open up 3’.
5. Simplify your Systems
Ensure your Admin and Business Management Tools are streamlined and simple. ‘Simplify to Amplify’. Spend more of your time on high value tasks such as growing your business and improving your service offering. Keep it Simple.
6. Understand your Metrics
Ensure you have a handle on a key stats for your business to offer transparency and consistency. Some important metrics include:
- Conversion rate on proposals submitted
- Average days payment against submitted invoices
- Cash Flow forecast vs. Actual Cash Flow
- Ability to see your workflow against current resources, i.e. you have 600 hours of work committed in the next 3 months. How many staff do you have to complete this and are they skilled to deliver? Do you need to hire?
7. Gather Feedback
- Constantly review your internal processes and find ways to simplify.
- Review your clients. Are they good to work for and invested in your business?
- Gather client feedback – Are you doing enough to deliver exceptionally well? Find out… pick up the phone and ask your client.