Recurring Income from Client Problem Solving
How many business owners want to admit to having a problem they can’t solve? After all, they’ve had the courage and enterprise to start and run a business so some justifiable pride in what’s been achieved. They don’t take kindly to being told they have a problem, especially when they have one!
Yet so much consultant marketing opens with “We/I solve your problems”. The implication being that you aren’t competent to run your own business.
Many times, I’ve attended a first meeting with a business owner who knowing that I’m a consultant opens with “I don’t have any problems”. So, the defensive wall is up before I’ve opened my mouth.
I then face an hour of reassuring words and relationship building before I can get them opening up enough to figure out if s/he indeed has any problems (which they must, because they agreed to see me).
So, there’s a really big obstacle for us consultants. Our advent is viewed defensively by business owners, who may want our help but don’t trust us.
What’s going on here?
Well, rather a lot, because from their point of view, they are not wishing to:
Admit to having a problem (as we’ve seen)
Let colleagues see that I don’t know what to do
Give colleagues the impression that I think they don’t know what they are doing
Incur high costs – consultant bills are legendary
Lose control of the business to a bossy consultant
Waste precious time if the consultant doesn’t fix it
Create a potential dispute
Given that lot, how do consultants ever get work?
Not easily…
So, let’s look at the reasons a business owner will wish to engage a consultant:
S/he really does have a problem that s/he can’t solve and it’s urgent
S/he wants something to work better that needs more expertise than s/he has
An urgent need to make something work better
Temporary lack of internal resources to deal with operational business issues
And here is how the business owner chooses a consultant:
Recommendation – usually from a trusted source, such as their accountant
Prospecting phone call from a consultant that is perfect timing
Attended a course / seminar and liked the trainer
Met a consultant at a business networking event
Reassured by the less threatening description of ‘mentor’ or ‘coach’
Lengthy questioning to try to get the consultant to spell out the exact solution
Checking with previous clients of the consultant
So, having finally chosen the consultant (aka mentor / coach) either through sheer urgency for a quick fix or after much reflection about a performance improvement issue, the final questions boil down to time and cost.
This is the trickiest part of all.
The client has bought into the consultant’s competence but now wants a fixed and minimal cost and diversion of time. By contrast, the consultant wants a rewarding revenue from the generous amount of time s/he needs to produce an impressive result.
These requirements directly conflict and are at the root of the tension which is always there.
How is this resolved?
Broadly, it will be a negotiation that results in fixing the project’s cost, time and outcomes which usually takes the form of stage payments against an activity schedule. In general business consultancy, these will follow a path of research, benchmarking, SWOT analysis, improvement plan, training, implementation.
In practice, the client will always feel the fee to be too expensive whilst the consultant will feel it’s not enough to do the job properly. So, the client will be looking for ways to get some early wins so s/he can understand enough to take over and finish the contract early. Meanwhile, the consultant is faced with the dilemma of either limiting time input which endangers quality or putting in the required time to do it right whilst looking for other issues in the business that would persuade the client to extend the project.
So, what chance of recurring income from client problem solving?
Accountancy work generates recurring revenue because of an ongoing need that businesses have to comply with the law and the certainty that by placing the work in the hands of a qualified accountant, they are guaranteed safety and freedom from hassle.
And accountants can use a lot of clever software to automate compliance work which keeps costs low, usually spun out at a manageable monthly debit.
But recurring income from business consultancy just doesn’t happen. It’s a service that is elective, purchased reluctantly, and terminated at the earliest opportunity, as we’ve seen.
And consultants have no software to automate their work and bring down costs to a level that doesn’t stand out like a sore thumb on the client’s bank statement.
Neither does the consultant provide the accountant’s reassurance of professional qualifications, a code of practice and an institute with the power to set and enforce standards and uphold ethics.
To change all that, several things would need to happen:
Consultancy costs come down to not more than those of accountancy work
Consultant months of time are reduced to hours and minutes
Client time on the project doesn’t intrude into the running of the business
Tangible results are guaranteed
Every aspect of the business is covered
Long term goals are agreed for the business and its owner
Continuous co-working partnership between consultant and client to achieve these
Code of ethics
Recourse to a higher authority in the event of problems
And how could such a miracle come to pass?
Well after 22 years of advisory work that reached one million owner-managed businesses and involved the training and development of 5000 consultants, I was forced to ‘think out of the box’ when the government money stopped and small businesses couldn’t afford to pay £500 a day for consultancy from their own pockets.
£1m later, the result has been automation software that reduces the time-consuming parts of a full consultancy project to from months to minutes.
This has opened a new UK market for 5.8m microbusinesses able to afford continuous and competent business advice that makes a permanent difference. And with it an opportunity for accountants to become their trusted all-purpose business advisor.
See how Runagood® Technology can transform your practice here
By Duncan Collins
Founder of Runagood.com Ltd