Automating Business Consultancy
The Runagood® Experience
When I first had the idea of automating business consultancy to make it affordable for any business, I was easily able to identify the repetitive work in every project I’d done. It goes like this: first, you find out where the business is today by posing 30 simple questions to the owner and comparing the answers to a database of 6 business benchmarks (acquired from work done with 1m small businesses).
That generates a report showing how much revenue is being lost by each and its impact on value. Next the system generates a plan showing what actions will close the gaps to raise revenue, profits and value, and connects the business with a dated schedule of activity to follow. 30 minutes from end to end, online.
The concept and invention bit were relatively simple
Once this large software investment was complete, our operational costs became negligible, bringing the ability to price our services at £1 per day, meaning marketing would be a ‘shoe-in’ at 99% discount on typical consultant charge of £500 per day.
We put it out online and spending £300 per month on AdWords soon got 00’s of businesses using it. Trouble was, they only did enough to get the free report and didn’t bother with the plan and actions which is where we would turn on the monthly charge to get revenue and give them value.
Users didn’t behave as expected
Having questioned these users it became plain they had little understanding of business principles and didn’t see the point of having a plan or a belief that there are ways to make their business perform better. They were operationally competent at producing their products and services but largely deficient in the skills needed for managing their: marketing; systems; people; finance.
They were relying on word of mouth for new customers, happily ignorant of business systems, taking a matey approach to people management and relying on the bank statement and accountant for financial management.
This is a group that I know so well from 22 years of helping government with small business improvement programmes. This is the 95% that are ‘hard to reach’ and have to be cajoled into taking action.
If you have something new you need to educate your users in how to use it
So, reaching back into historic experience I considered how to get consultants and accountants engaged as intermediaries, able to explain and coach a small business owner through these automated processes to the point of taking paid action.
Cutting a margin for them meant raising end user pricing to £5-£10 per day, but still well within what small businesses pay during a year to respond to problems that arise. We ran several focus groups and experienced strong support. The consultants said it was a great way to widen the numbers of clients they could profitably work with whilst the accountants said they needed to get into ‘whole business’ advisory work and the Runagood® system was the perfect answer.
We rebuilt our delivery system and websites to reflect the new intermediary roles and aimed our marketing at consultants and accountants with the promise that they would be able to work with any size of business profitably, greatly widening their appeal. In 2019 we trained 120 and equipped them with the software.
Which is where we encountered the next roadblock having challenged them afterwards as to why they were not getting beyond using the first part of our system.
The consultants explained they were not comfortable working online. They wanted to physically visit each prospect and then use our Business Dashboard® on them to determine if they we were able to afford their usual £500 day rate.
The accountants said they felt uncomfortable at predicting the future for a client’s business and being held responsible if it didn’t work out.
What your users say they will do isn’t the same as what they actually do
In both cases, we were able to establish that neither consultants nor accountants actually liked microbusinesses, nor understood them, so had not attempted to work with them. They had poor past experiences (ie brain picking and not paying for advice) and as a result were focused on the top 6% of businesses that can and do pay £500+ per day. A very competitive market.
They did not believe that the other 94% were worth pursuing and didn’t know how to reach them anyway. In fact, worse, it turned out they were not marketing themselves at all beyond attending networking events and hoping for referrals and introductions. They happily volunteered that they weren’t helping themselves.
They also went on to say they thought that microbusinesses needed a consultancy approach that was different to that used with medium / large firms and were unsure how it needs to work. Probably more detailed than they would like or know how to do.
Your users want ‘magic bullets’ instead of working at what they should be doing
To get them using our technology it became clear that we first needed to give our Partners new skills, deeper resources and the confidence in using them to:
Find new clients (marketing & selling – the subject of our first blog see here)
Advise the whole of their businesses (consultancy – the subject of our last blog here)
Work fast to get prices low and profits high (harnessing technology - the subject of this blog)
So, we developed a Foundation Programme based on these 3 stages
The new marketing function that we established in Session 1 is now bringing in new business prospects ready to consider receiving business advisory services.
The practice has now attained demonstrable B2B marketing competence.
The consultancy skills that were trained in Session 2 have provided the knowledge and confidence to analyse any business, providing practical feedback and performance and value improvement options to its owner, using Business Dashboard® technology assessment technology.
The Practice has now attained demonstrable competence in basic consultancy with real businesses with whom it has used stage 1 of Runagood® technology.
Session 3 is to gain practical operation with the new skills and technology:
Implementing full-on the new marketing, consultancy and technology skills to secure new clients ready to pay for performance and value improvement project implementations.
Weekly coaching to trainees until they demonstrate (or otherwise) that they can work at speed for prices that are affordable and profitable, with real clients, proof of their new skills and confidence.
Final review session after 4/6 weeks of Session 3 when we meet up to consider the practice’s prospects and desirability of migrating to a full Runagood® partnership. In this we look at the working track record, collaboration, adherence to deadlines, time expended, revenue forecast, likely ROI and attitude.
If the decision is no, we part as good friends, to stay in touch.
If the decision is yes, we enter a Runagood® Partnership agreement and draw up a full training programme for use, after which we release, the remaining software products that follow the Business Dashboard®, ie: Business Forecasting; Planning; Methods; Action steps; templates. And it works!
Summary
In these 3 blogs I’ve covered the lifecycle of introducing a new service product, the experience of taking it to market, the lessons learned and how to get there in the end.
These were the key lessons:
If you believe in the idea – don’t give up – it will work, one day
Learn from what goes wrong – the market is a tough teacher that has to be listened to
Be willing to adapt to market reaction – but give each change time before judging it
Let potential clients & partners try it – under supervision
Listen to what they say – and be seen to take it on board
Only sell it to clients and partners who accept your values – they are your public face
Written by Duncan Collins, Founder of https://www.runagood.com/