This article is written and owned by Dr Mark Yates
To become an entrepreneur consultant you need to understand
the entrepreneurial characteristics required to commence
your own business consultancy. It is also worth
understanding the top 8 secrets from the international
business guru before starting consulting, as business gurus
advise these top 8 secrets are essential entrepreneur
management & entrepreneur consulting strategies to avoid.
Every small business guru knows these are mistakes.
Historically the following business model formula and
entrepreneurial characteristics are followed by most new
consultants when starting consulting and a high percentage
of long term consultants seeking a position in entrepreneur
management.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 1: Graduate from
training programme.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 2: Purchase business
leads, usually a minimum order of 10 leads at a rate
beginning at £65 rising up to £125 per lead.
Taking the lowest price figure this equals £650.00 at
your cost.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 3: Split these leads
down into one per day over a 10 day period.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 4: Conduct 2 hours
research and preparation about each client’s visit at your
cost.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 5: Travel to each client’s
business, usually within a 50 mile radius at your cost.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 6: Spend 2 to 4 hours
identifying your prospective client’s business needs and
advising etc, at your cost.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 7: Drive home & spend
another 2 hours writing up your notes at your cost.
Entrepreneur Consultant Top 8 Secrets From The
International Business Guru Step 8: Repeat this procedure 9
more times at your own cost.
1. Total time invested 10 days. Fees received NONE. You
have provided this service FREE of charge.
2. Total work income lost 10 days at £500 per day,
(which is a very low daily rate,) You have lost £5,000.
3. Total price of your leads = £650.00.
4. Fuel & expenses = approx’ £350.00
5. Total cost to you = £6,000.
6. Average conversion rate of FREE service clients into fee
paying clients is approximately 1%.
If this isn’t a sorry enough window into how to run a bad
consultancy business, buckle up because it gets worse.
If your bill out rate is £500 per day then you have to
work another 10 days for your one out of 10 converted
client before you recoup your initial investment.
If I was to play the Devil’s Advocate for a moment and I
was one of your 10 FREE prospective entrepreneur management
then the two questions I would be asking you as your
business consultancy and business growth consultant is.
1. “why would I ever dream of paying for your entrepreneur
consulting business advice when your own personal business
model is so seriously flawed?”
2. “Are you going to suggest that I follow your lead and
give away 10 days of my time FREE to my customers in the
hope of converting 1 out of 10 into fee paying customers.”
Most business gurus would agree this is not the best
suggestion when starting consulting. Even a small business
guru would suggest it’s not the best entrepreneurial
characteristics to offer a client.
Now I’m fully aware that as consultants we have to fail
periodically in order to maintain a state of awareness of
opportunities for improvement and continuous professional
development but to say this business model is outrageous
would be the understatement of the decade.
In my experience of talking to hundreds of business
consultants and listening to even more business owner
directors, one thing shines through in glorious
transparency with this flawed business model and it’s this;
‘very, very few business owners attach any perceived value
to a business consultant who offer his or her consultancy
services FREE of charge.’ This means that you are further
pre-programmed for failure when turning up trying to close
a consultancy business deal with the business owner.
Now as in all things there are exceptions to this rule and
I personally know of some serious heavyweight consultants
who close about 20% to 30% of these consultations but these
top closers are in the absolute minority.
I never take any consulting contract at a reduced fee and
would never dream of contemplating taking a contract as a
loss leader in order to get my foot in the door of a
business. This flies in the face of what we are aiming to
achieve because the clichéd ‘foot in the door’ never
has an escape route, and trust me if you conduct business
this way you are going to need an escape route sooner than
you think.
As business growth specialists the reason for establishing
business relationships which result in high buyer
commitment is to establish a high fee structure.
The secret to agreeing high fees are to base your fees on
the client’s perceived value of your professional
assistance. If you turn up for FREE then the client has no
perceived value of you or the skills and services you offer.
Are you CRAZY? Next time you need a plumber or a mechanic,
ask them if they’ll spend 2 to 3 hours of preparation for
your service FREE of charge. Of course the mere suggestion
of them being asked to provide their services FREE of
charge is ludicrous. However this is what business
consultancy training schools advocate to new consultancy
graduates.
The old saying of, “if you keep doing what you are doing,
you’ll keep getting what you’re getting” rings true. If
this is the premise on which you plan to grow your
consultancy business then you are by definition
pre-programmed for failure.
The percentage rate for success is minimal and the small
percentage of clients you might eventually hook will end up
paying for all your prior FREE consultation services.
If we analyse the bigger picture and work on the basis of a
working year consisting of 220 working days after deducting
weekends, bank holidays and conventional holiday periods.
Most business consultants indicate they prefer to be booked
out at work for 70% of the time, leaving the remaining 30%
for marketing, promotional and networking event duties to
help grow their business. This leaves 154 actual working
days in which to generate your entire annual salary.
If your charge out rate is £500 every day (which I
suggest is the absolute bare minimum, then your maximum
annual earning potential is £77,000 and that’s if you
maintain a full 70% workload.
It’s obvious that charging business consultancy fees on a
Per Diem basis this is another flawed business model.
Factor in providing 10 days FREE of charge and the costs of
buying your business leads and this reduces your annual
income by £6,000 for every further 10 days of FREE
consultancy you deliver.
It may appear obvious now it’s written down, however a wise
business man once told me that none of us ever took
‘obvious 1, or obvious 2′ at school or college. I know of
several business consultants who frequently purchase blocks
of 10 business leads at a time.
The very best piece of advice I can offer you when starting
consulting is that if you charge a business consultancy Per
Diem rate, then you are placing emphasis on the activity
you intend supplying, and not the results you intend to
achieve.
In respect to entrepreneur consulting you are
pre-programming yourself for failure, and this is one of
the entrepreneurial characteristics which increase the
likelihood of entrepreneur management failure with their
own business.
Most business gurus including a small business guru that at
the end of your client’s fiscal year, the measure of your
success will not be considered on the number of days you’ve
worked, you will be measured on the results you have
achieved for your client’s business.
Over the years I have always approached business
consultancy from a perspective of helping my clients to
become wealthy, irrespective of what type of relationship
or system I adopt. I call this entrepreneur consulting and
my entrepreneurial characteristics form the foundation of
my entrepreneur management systems.
My secondary aim is to establish an enduring relationship
with my client. Given I am very selective about who I
choose to work with, and that some of my business
consultancy clients still utilise my services after 15
years, I guess my philosophy has been successful. Taken
from The Art Of Business War Book by the International
Business Guru.
—————————————————-
Dr. Mark D. Yates The International Business Guru & Growth
Consultant grows businesses fast in a long term
sustainability method. His dynamic business model delivers
exponential growth, increased turnover & profit margins. He
delivers business support to small, medium & large
businesses in 42 countries. To claim his FREE business case
files visit him at =>
http://www.businessconsultancyonestopshop.com or e-mail him
at drmarkdyates@aol.com
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