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.