How to Make Small Business Consulting Profitable

For a beginning, let’s ask ourselves the question: Is small business consulting profitable? The answer would be a resounding “Yes,” from all corners of the world. So, why are you unable to make it work, and in the process help small businesses with your unique experience and approaches?

You are a business consultant, not the direct worker

The most common mix-up faced by small business consultants is that rather than remaining as business advisors, they end up as direct service providers. They end up handling the major workload of the business process where they were expected only to provide advice, and the client ends up with a steep bill. In place of mutual satisfaction, you now have mutual dissatisfaction. The results are unwelcome on both sides – but they happen all too often, where in small business consulting, the consultant fails to maintain the position of a consultant.

There are three possible outcomes in such situations – the client pays up and remains upset with you, the client doesn’t pay your bills and you are upset with the client, or both parties reach an unhappy compromise.

After a few such mix-ups, you become convinced that there is no profitability in small business consulting. But you know, that’s not true. The reality is your approach needs to be transparent and needs to change case by case.

In certain cases, time-schedule, lack of resources on part of the client, or other exigencies may call for you to provide most of the work as a direct service provider. But in such cases, the client needs to understand from the very beginning that the instant situation needs a service provider with your experience, more than it needs small business consulting. The client needs to have a clear idea of the bills that may be chalked up if you were providing direct service, or the client is free to hire another direct service provider, to save the day. Even providing that little advice is sufficient for you to bill as a consultant, because the client was unable to recognize the situation. What you are doing is small business consulting, and not creating a fallible situation.

Why small business consulting mix-ups happen with such regularity

The oldest and most traditional businesses in providing small business consulting have traditionally modeled themselves as consultant-cum-service providers, take for example, law firms, or Accountant firms. Each of these sectors are used to small business clients coming to them at the last moment or when the situation is precarious for them, and according to the laws of maximizing business opportunities, they have set up systems to provide service alternatives ready at hand. In fact, in many such traditional firms, service delivery starts first, and then it turns to consulting.

However, in the era of information technology, the number of alternatives available even to small businesses are hundred times more than the time when CPAs or law firms began establishing their business models. Consequently, with the availability of greater choice of service providers, and ability to compare between alternatives, the chances of client dissatisfaction multiply. This is why, in today’s small business consulting, it is sufficient to point out the necessity of direct service delivery to a client, without embroiling yourself, or pushing your own agenda of direct service.

In a globalized service providing market, you can never outbid the “I’m cheaper than you can ever be” brigade, and don’t even think of that. To make small business consulting profitable, stick to your guns and be a consultant primarily, and act as direct service provider only when the client asks you, and only when you can afford to do so at the client’s rates.