Seeking Aggressive Growth for Your 1-Man Consulting Practice? Forget 400 Clients. 4 Will Do.
Yes, you need only 4 high-ticket high-value long-term clients.
The origination of this article is a question. Here it is.
When it comes to growing our 1-Man consulting practice, or any business, we think volume is the answer. Yes, that is one answer.
One of the many.
And that may not be your preferred answer. I get that.
It begets the next logical question. How can we grow and scale our 1-Man consulting practice without adding clients?
I think we can draw one corollary to high-ticket sales.
To Get High-Value Clients, We Must First Understand High-Ticket Sales.
Understanding how we can increase sales revenue from a mathematical standpoint is easy. The formula goes like this.
Price per product * Number of Products sold = Total Revenue
This formula tells us everything we need to know about scaling revenue. Our path towards revenue heaven is determined by our mastery of 2 variables.
- Price per product
- Number of products sold
The price per product is easy to understand. Imagine that you sell your candy at 1 dollar a pop, and I sell mine at $5. That means you must close 5 transactions to match 1 of mine.
We do not have to sell the same kind of chocolate candy, by the way. Let us leave the product spectrum aside. From a financial mechanics point of view, I am more energy efficient.
That is good math in terms of dollars and time.
Of course, there is also the quantity dimension. In my opinion, this dimension is highly misunderstood.
We assume that selling more means selling more to new clients. No. That is the perfect recipe for scaling headaches, not our revenue.
The goal is to increase our revenue per existing consulting client.
Solve customer problems and make sure that the customer is representative of a large market and then you will have a pretty good formula.
Think about it. Which one is a better deal?
1 consulting client paying you $100 for 1 project?
Or having 100 consulting clients paying you $1 per project?
Note that the end result is the same. You get paid $100. However, would you choose to deal with 1 client or 100?
The choice is yours.
Understanding How You Sell More to Existing Consulting Clients
You need proximity.
The business ecosystem is a landscape of protracted commercial connections. This is what it looks like.
- Big Business A runs a multi-million client portfolio
- It runs marketing campaigns for their clients
- They outsource work to small businesses to lower their cost of service
- Small Business B takes on projects they can excel
- And then, they outsource parts of the project to Freelancers C, D, E, and F.
There are many reasons for engaging external vendors, outsourcing agents, and consultants. Lack of in-house headcount, cost competitiveness of small businesses and freelancers, and time sensitivity of deadlines are the most common ones.
If you study this macro background carefully, you will realize one thing. The ultimate customer is Big Business A.
Big Business A throws out big deals to multiple small businesses.
Small Business B throws out moderate contracts to multiple freelancers.
Your consulting revenue drops as you move further away from the primary source of work. Therefore, this is my question to you.
How close are you to Big Business A?
The Strategy to Get Closer to the Client Decision Makers
If you want to build consulting pipeline longevity with existing clients, you need to stay close to the decision-makers. This approach works for any ideal B2B consulting client profile, big business or small.
Here’s why.
- Decision makers think long term, usually in 3, 5, or 10 years
- They think about growing their business
- They believe in spending for growth
And that maps neatly to our consulting pipeline. A pipeline refers to never-ending contracts from the same client for different aspects of their business.
How do you convince them to give you a pipeline of never-ending work? You must paint the future for them, step by step. Take, for instance, the pipeline of consulting work I am working on currently.
Consulting Contract # 1: Study the production lines and identify long-duration activities.
Consulting Contract # 2: Redesign workstations so all operators have what they need.
Consulting Contract # 3: Assess and implement software for time savings.
Decision makers appreciate big picture thinking accompanied by execution feasibility. They must believe that the next step (read: consulting projects) is a logical extension of the current one.
And when they do, they start to regard you as a strategic partner. That means more opportunities, discussions, and other projects. The cycle spirals positively upwards.
You will get more consulting contracts from your existing client portfolio. 2 metrics work in your favor.
Customer acquisition cost declines over time.
Customer lifetime value increases with time.
Revenue increases + No additional costs = Increase Profitability
This is the point where you no longer need 400 1-time transactions. Instead, you will start hunting and nurturing 4 high-ticket, high-volume, long-term clients.
Why 4, you may ask? Why not 5 or 6 or 7?
Because I am currently working with 4 of such clients. And it works well for me.
Parting Keynote
You do not need 400 clients as a 1-Man consultant.
If you do, your headaches increase exponentially. It becomes hard to keep track of client requirements and how you can service them optimally.
We need to rethink how we can scale our 1-Man consulting practice realistically. The way to do that is to identify high-value consulting clients and build a pipeline of work with them.
Future-oriented strategic thinking is necessary. You want to go for a low client base, multiple transactions, with endless opportunities for upselling and cross-sell.
That is pretty much it.
As a content contributor, I write my observations from daily life and my business exposure. Because our life experience is the bedrock of our unique perspectives.
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