Instead of focusing on the small business owner, I´m going to address the consultant who serves the small business owner. According to the US Dept of Labor and Statistics, service providers comprise about 40% of the small businesses in the US. Yet so few consultants know how to go out, pitch and attract small business clients.
Chris Grant, CEO of Virginia-based Wealthgate is someone I recently met through an associate. He offered me an early draft of the manuscript for his book. The first chapter of which is available. His two year old business is poised to make a quarter of a million this year, and its all from small business clients. From one small business owner to another, I queried him on his tips for starting and operating a successful biz, and then added my own editorial comments for those consultant/readers.
What makes you unique in the world of small business consulting?
While my formal consulting practice is less than 3 years old, I have over 12 years of consulting experience. My firm is unusual in that there is both deep competency in technology (& technology implementation/integration) as well as sound business logic (understanding). Our approach is to design effective solutions to complex business problems, and that sometimes means bringing in other niche consulting sources that I’m strategically partnered with to get the engagement done and done right-the first time out the gate.
Translation:he is stating his ‘value proposition”; that he can be strategic and tactical, broad and deep, whereas most consultants are either really good at being strategic or tactical but not usually both. Consultants who can really execute on this value prop can charge the most money, followed by strategic only, then tactical being the least profitable.
What do did you face starting the business?
While I enjoy the variety and intensity of consulting with small-businesses, it is an extremely challenging niche. No two small businesses are alike, shifting priorities, shifting levels of urgency and importance which can impact an engagement, project creep. At times, I feel it might be easier to predict and control say a hurricane or thunder!
Translation:hard but pays really well
How do you mitigate the risk in picking your clients?
I mitigate risk by focusing on businesses with enough liquidity and internal competency to understand, procure and appreciate the engagement in question. I also limit my engagements that involve (or is approved) by C/Owner level people. I also attempt to smooth out the frequency of engagement work by aligning/collaborating with other consulting firms that specialize in complementary areas such as accounting (CPA), marketing, PR, branding, sales training, etc. Currently, 100% of the firm’s engagement work comes from direct referral from past clients or my pool of professional services colleagues. For me, collaborative engagements are far more enjoyable than the solo engagement.
Translation: get the buy-in from the C-level executive, partner with other firms to help execute on client programs. It’s the only way he can scale to meet big projects.
What role did partner(s) play in growing business?
Given the diversity of services offered by my firm, channel partner marketing/referral systems are the most consistent, effective and profitable means of procuring a client. WealthGate is currently preparing to serve an international clientele. Without question, partnering is a major factor in the firm’s growing success here in the U.S. and in the future abroad.
Translation: you need local players abroad, and conversely, when an international group needs a US resource, Wealthgate is ready.
Did you: trade for services to get up and running?
Yes! I’ve done free strategy work, business plan development and business modeling in exchange for business services I needed either directly for the firm or for a prospect and/or client. Bartering services (at least for internal consumption) is very common, although I’m careful not to burn too many non-billable hours.
Translation: he’s open to considering client projects or partner work for trade, stock or other incentives. Look for consultants that are willing to share some risk and reward–they are more incentivized. I’ve taken many clients on over the years in this capacity–it makes one a lot more dedicated to the work that’s for sure.
Did you: offer a revenue percentage on the back end?
In the international expansion plan, I have planned to offer revenue percentages on the back end. I also provide referrals for common customers. When I’ve offered money as compensation, it is always declined.
Translation: Commissions, bonuses, stock or even fees based on meeting milestones can all be used in place of a retainer.
Any problems with the partnerships as a business development tool?
All of my current partnerships/alliances are working perfectly, problem-free. Everyone is careful in managing time, expectations and avoiding "abusing" favors and whatnot.
Translation: sure. Wait until tomorrow.
Any bad partner experiences at all?
In one situation, where I had percentage, the owner feared losing control of his business and who was totally resistant to "sharing the wealth" ended up unwinding the sale, lost half his core creative team and ended up selling out to one of his key clients, who owns and runs a VC firm. The deal resulted in his receiving a cash payment, reduction of %equity owned, and loss of control as to the company’s market/focus and activities. But I got nothing.
Translation: learning lesson. Up front contractual terms that protect the consultant against this type of thing is similar to a protective clause in a reverse stock split. i only had to learn that lesson once as well. Too bad is cost me several years worth of salary.
Tips or words of advice to the audience/Lessons Learned:
Obsess about creating/delivering value to both yourself (quality of life) and your customers (partners, employees, clients, etc). Don’t be afraid to partner with other businesses, but like with a marriage, choose that partner with care.. ASK for referrals from everyone who knows the value you bring and ask often.
Translation: never lose focus on the objectives of the project, and that clients can not be taken for granted.