The Business Behind Consulting ◾ 117
confident, talented individual, being the consultant he wanted to be and
doing the work he loved doing.
Remember, your reputation and track record represent intangible yet hard-
earned and vital assets in consulting. Creating a reputation for uniqueness,
difference, and high-value results is a springboard for charging value-based
fees, for rendering the intangible tangible, and contributing to presence and
profit. A powerful PCP and a sterling reputation deliver powerful value.
The Consultant as an Investor
Consulting, as we have seen, has the potential to generate very significant
revenues. In that context, it is possible to identify four discreet levels of
financial positioning through which a successful consultant moves as their
career progresses (Figure 5.4).
At the first level, as an employee, you have limited control over your cash
flow. You take your pay every two weeks or every month as is customary
and seek bonuses or raises to try to supplement that cash flow. Your tax
position is largely a given; you pay at high marginal levels with little scope
for improvement.
As you move into self-employment, you have greater opportunity to drive
cash flow into your business. You have the autonomy to seek opportunity
and ascend the pyramid to become the business owner, where, once again,
your potential to source opportunity and additional cash flow is further
enhanced.
Business owner
Self-employed
Employed
Investor
Fluid revenue
and cash-flow
Fixed revenue
limit
ed cash-flow
xed
rev
enu
e
Figure 5.4 Investor pyramid.
118 ◾ Odyssey—The Business of Consulting
As you progress towards the top of the pyramid and become a consultant
investor, you can take the profits you have generated through your experi-
ence and expertise and invest them in the stock market, in real estate, or
other businesses and, thereby, develop a passive income to complement
your earnings as a consultant. The central objective here is to become the
investor: The money works for you! You harness the cash flow in your busi-
ness to make third-party investments, which deliver an investment income
while you engage your passion in the consulting business.
The Value of the Generalist and the Specialist
Clients today want every consultant to have the generalist skills of their best
general manager and at the same time the in-depth knowledge of a techni-
cal specialist. This presents a dilemma to the Odyssey consultant. On the
one hand, the more specialized your approach, the smaller the market you
will have available to you. On the other hand, the more generalist you are,
the less credible you might appear in the eyes of the client. The following
sections present the four approaches you can take to help bridge this gap.
Specialize
We live in a society that produces and prefers specialists. Overspecializing in
consulting, however, will buy you a ticket on the feast and famine roller coaster.
Moreover, the business world is changing so rapidly that even maintaining your
particular specialization is frequently a challenge. How do you deal with expec-
tations from clients? As an Odyssey consultant, go with the notion that you are a
specialist. Create your business model and messaging in a way that your one-
person practice specializes in whatever the client requirement is. Your specialty
might be human resources, but if you also develop managerial skills, you can
bring in and coordinate the overall intervention, contracting resources from
other specialists (technology, finance, etc.) as necessary.
Be Clear about Your Difference
Your area of excellence is your competitive advantage. Differentiate yourself
as an Odyssey consultant by maintaining the uniqueness of your portfolio of
solutions and personal branding. Think about the perceptions you wish to
create, about how you will leave a lasting impression in your client’s mind.
The Business Behind Consulting ◾ 119
Demonstrate through your marketing and promotion your differentiators,
presence, and consistency.
Who you are, your character and personality, your look, what you do,
and how you do it when you are on site with the client separate the amateur
from the professional in the field of consulting.
Define Your Ideal Clients
Segmentation is the act of systematically identifying your Ideal Client mix.
Resist the temptation to market your portfolio of solutions to everyone,
everywhere. Some consultants like travelling long journeys by air and by car
to meet their clients. The reality is that if you are spending time collecting
air miles, you are not spending time finding or serving clients. Yes, it is a
global village and international assignments are exciting, but it is a matter of
doing a thorough cost–benefit analysis and deciding whether the assignment
is actually worth it or whether it is just an expensive ego trip.
It often makes more sense to operate locally, to target and handpick
clients who value what you do and are prepared to pay the consulting fees
that you deserve for the value that you create.
Any business is better than no business is an old maxim. This is self-limiting
thinking. Learn to say no. Your motto must be “the right business, the right
client, the right revenue.” Your time and talent deserve better. You can be just
as busy generating total fees of $200,000 as generating fees of $1 million.
Focus, Focus, Focus
Your ability to focus and concentrate all of your marketing, promotion, and
intellectual efforts on building relationships with your Ideal Clients is the
essence of Odyssey consulting. Expending time and effort in the wrong
market segments with low-value clients imposes a ceiling on your potential
to grow and develop your consulting practice. Be crystal clear and totally
focused in your thinking and actions:
◾ What is your purpose?
◾ What are you really good at?
◾ What do you love to do?
◾ What is your key talent?
◾ What are your core competencies?
◾ What is your value-driven proposition?
120 ◾ Odyssey—The Business of Consulting
Odyssey in Action I
Mark Debinski, Bluewater Advisory & Bluewater Search, Sykesville, Maryland
Before You Do the Business, You’ve Got to Find It
The reason I’m such a staunch supporter of the planning and budgeting pro-
cess is that I’ve seen so often what can happen when you don’t do it. When
I first started consulting, I had two partners: myself, a legacy senior consul-
tant that had been around for a long time, and one other guy—Bob—who
had been a banker for twenty years.
We put a fee share arrangement in place. You “eat what you kill.” When
you sold work, a portion went to the house for overhead and marketing, and
the rest was yours.
Bob he was on board with everything verbally. Then, at the end of the
first month he got a check for $2,000.
He was shocked. “Two thousand dollars? I can’t live on two thousand
dollars. I’ve got kids getting ready for college!”
“Bob,” I said, “what were you thinking?”
It quickly emerged that he had never fully processed the fact that you
need to sell work and then do the work and then get paid for the work.
There was never going to be an automatic paycheck that would show up on
time and for the right amount every second week.
One of the things I’ve found with many consultants I’ve met is that while
they may have the competencies while they may understand the “knowledge
transfer” piece the “actual running a business” piece? That’s lacking.
I have people contacting me on a weekly basis, telling me that they’ve
decided to become a consultant. Often, I get the impression that they think
they’re doing me a favor because they want to join my team.
Typically, I say, “Well I’m flattered. Tell me how much business are you bring-
ing with you and how much business do you plan to do in the first year?”
Then there’s a pregnant pause, followed by something like, “Oh, well, I
know that you’re really busy and I just figured and I would come and work
with your clients …”
There’s a real misconception by many consultants about the rainmaking
portion of the business development: pricing it properly, closing the deal,
then seeing it through a conclusion.
First off, you need to develop a plan around where you’re going to get
business. You need to understand the sell cycle. I might have an initial
The Business Behind Consulting ◾ 121
meeting with a prospect, but it could be two months, three months, or six
months after that conversation before that client is ready to fully engage.
You work on their time frame, not yours.
I have a friend that’s starting a consultancy right now, and I’ve given him
all of my budgeting and planning tools, but he hasn’t used them. Instead, he’s
filling his calendar with coffee meetings, breakfast meetings, dinner meet-
ings, and all of that. I call it the shotgun approach and it won’t work. He hasn’t
developed a strategy around where the low-hanging fruit is, where he’s going
to get the business.
When I started out, I didn’t have the luxury of being able to fail. I had
worked in various organizations for twenty years, but it had always been
my plan to become a consultant. From the very beginning, I wanted to be
my own boss. I wanted to make a lot of money, and I wanted to havethe
freedom to do things like go to my girls’ track meets. I wanted to have
theopportunity for high income and freedom, freedom of the wheres and
the whens. That doesn’t mean that I don’t work crazy hours—I do—but I
find the harmony in the flexibility that comes with being a consultant.
I’m the sole earner in our household. We have a fairly expensive lifestyle
simply because of schools and elder care and all those things that go with
raising a family. For me, the consequences of failure would have been very,
very serious.
And so it wasn’t a question of “Can I make a good deal of money?” It was
this: “If I’m going to do this, I have to make a good deal of money.”
I had been in business for two years before I went through Odyssey.
Afterwards, my revenues increased five- or sixfold.
What Odyssey did was it helped me get clarity around what I was good at,
what areas of consulting I enjoyed, and where I could make the most money. It
showed me how to work—in Odyssey parlance—at Levels 3 and 4, how to find
the right prospects, and how to create a strategy for getting in front of them.
Odyssey in Action II
Vicki Lauter, Managing Partner, Strategic Human Insights, Atlanta, Georgia
The Test Comes When You Quote Your Price
When I started back in 2001, my business was retained executive search for
the healthcare industry. I had worked in that area in Accenture, and in Ernst
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