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How to start and run a successful
consulting business?
Practical guide
2
In this presentation I will show you
how to start and run consulting
business. You will find here a lot of
practical tips
3
Source of ideas for consulting business
We will start by showing were you can find ideas for
consulting business
4
Source of ideas for consulting business
Getting your first customers Pricing Tools
Later we will discuss ways in which you can get new
customers, what tools you can use and how you should set
up the pricing
5
Source of ideas for consulting business
Getting your first customers Pricing Tools
Scaling of the business
Add-on business
Once you are done with the basics I will show you how to
scale the business and what add-ons you can have
6
Source of ideas for consulting business
Getting your first customers Pricing Tools
Scaling of the business
Add-on business
1-man show
freelancer
As a separate part we will discuss the small consulting
practices (1-man show / freelancers)
7
What I will show in part of extensive on-line course where you
can get all additional resources including Excels
Click to check my course
How to start and run a successful consulting
business?
$190
$50
8
Introduction
9
The essence of consulting
10
What is consulting?
11
With consulting you can reach things that were out of your
reach
Consulting  Professional help in achieving certain goal
 Way to fill-in the gaps
=
12
You maybe surprised but actually there are plenty of good
reasons why companies hire “overpaid” consultants
They want to get better /
faster / more efficient
They do not have certain
competence /skill
They lack capacity to do
something
Sudden unrealistic deadlines
Required by owner or
regulator
Turn arounds
They need independent view
One-off events
13
Consultants help you move
faster in the right direction
14
Around what you can
build consulting?
15
You can build your consulting around specific customer
segment
Around segment
Examples
16
….or around service / product
Around segment
Examples
Around service / product
17
Some companies use a mix of those 2 tactics
Around segment
Examples
Around service / product
18
Where you can get idea for your
consulting businesses?
19
Satisfy your own need
20
If you have already some business existing, you can create consulting to
help you solve your problem. First you create internal department to take
care of your need Old business
New department
21
Once you get the proper quality of service and profitability you
grow it and separate into stand alone
business
Old business
Consulting business
22
There are plenty of nice examples of such companies
Old business
Consulting business
Examples of such businesses
 Consulting on Adwords / facebook / SEO /
content marketing that you needed to
master and there was no decent provider
 Consulting to support the sales of
software, (including SaaS) that you have
produced
 Consulting to support good usage,
maintenance of your B2B product
(machine, production line)
23
For this method to work you need to have certain
things occurring
 You are one of the best / first users
 You have easy access to the underlying good
 You have some cost advantage because you buy
in bulk
 The specific underlying good / service is
complicated to master or changes fast
 Customer do not want to make out of the
knowledge you are providing competitive
advantage
24
Carving out
25
You can also create consulting business by carving out a
department from existing company Current
departments
26
You have to identify the department that you will transform
into stand alone business and start running
it as a separate business unit
Old departments
Carved out part
that will be
changed into
consulting
27
Once it is big enough you can make it into separate entity
Old departments
Carved out part
that will be
changed into
consulting
28
There are plenty of nice examples of applying this strategy
Examples of such businesses
 Marketing departments
 Sales department
 Analytics / Market Research / Pricing
departments
 R&D departments
 Technical support
 Shared Service Center
 Project Management
Old departments
Carved out part
that will be
changed into
consulting
29
For this method to work you need to have certain things
occur
 People in the specific departments have very
volatile utilization
 Running the department requires huge
investment into people, trainings and software
 Department has become relatively big and the
company does not have skills in running a
consulting company
 The demand of the company for the service
offered by the department is irregular
30
Cloning
31
One of the ways to clone is to clone 1:1 the whole business
Examples of such businesses
 Consulting on Adwords / facebook / SEO /
content marketing that you needed to
master and there was no decent provider
 Consulting to support the sales of
software, (including SaaS) that you have
produced
 Consulting to support good usage,
maintenance of your B2B product
(machine, production line)
32
For this method to work there are number of factors that
may improve the odds
 Market is mature and ready for specific
consulting services
 There are foreign companies that are
used to this type of service
 The group you are targeting is
sufficiently big to support a business
 There are no cultural barriers to using
consulting
 Fees are acceptable
 Low level of government in the economy
33
You can also clone the idea and adjust it to a different
segment / group of customers
34
For this method to work there are number of factors that
may improve the odds
 Market is mature and ready for specific consulting
services
 The group / market to which you are switching has
to be big enough to support a business
 The consulting companies you are coping for
some reason have low incentive to enter specific
market (low size, their strategy that assumes
focus etc.)
 There is a niche that is not served well by current
consulting companies
35
Walk away and
become independent
36
In same cases the consulting business is created by a bit
forceful division Other departments in your old
company
Your departments
37
You either join another big corporation or you build your own
business Other departments in your old
company
Your departments
Other departments in the new
company
38
There are plenty of good examples for both cases
Examples of such businesses
 Department in banks
 Group of people / department in
consulting – usually serving specific group
of customers or 1 type of service
 Department from training company
 Department from software company
Other departments in your old
company
Your departments
Other departments in the new
company
39
If you have some business you can creating consulting to help
you solve your problem
Examples of such businesses
 Department in banks
 Group of people / department in
consulting – usually serving specific group
of customers or 1 type of service
 Department from training company
 Department from software company
Other departments in your old
company
Your departments
Other departments in the new
company
40
For this method to work there are number of factors that
may improve the odds
 The customer will follow you
 You take all the competence from your previous
company
 The company you join has almost none of your
competence
 The company you join has customer to whom you can
sell your product
 You can take the references
 Low threat of second-wave division
 You have sufficient money gathered to survive the dry
season and projects sliding
41
Product / service to
consulting
42
You can create a consulting on the basis of existing product or
service
Agency
Implementation consulting
company
Implementation consulting
(set-up, purchase, run)
43
For this method to work there are number of factors that
may improve the odds
 Product or service is complicated and changes a lot
 The customer has no resources to master it
 It is a one-off
 You have better access to the producer of the product
/ service
 You have the support of the producer
44
For more go to our extensive on-line course where you can get
all additional resources including Excels
Click to check my course
How to start and run a successful consulting
business?
$190
$50
45
Business model of a service
company
46
Introduction to service
companies
47
Service companies in general are all about converting your
workers time into money
Man-hours
48
There are some general rules that you should follow
Measure man-hours
Measure tasks
Stay productive and
efficient
Make sure supply matches
demand
Forecast and create
demand
Manage supply ahead of
time
Make sure that margins are
OK
49
Business model of a
consulting company in Excel
50
The typical model of a service model can be presented using
this logic
 % Utilization# hours
available
# of billable
hours
Revenues
Gross
Margin
Operational
Profit
Net Profit
 Hourly fee
 HQ costs
 Bonuses
 Interest
 % Gross
Margin
 Wages
51
Getting first customers
52
Steal customers
53
The easiest way to get the customer is to steal them from
your competitors
54
As a first step you have to show the customer somehow your offer,
especially when the relation between the customer and current consulting
company is about to end
55
If you are successful in your move you will get a launching /
reference customer
56
There are number of situation when you can pull it off
successfully
When you can pull it off
 Carve out
 Walk away with customers
 Buy out the customer
 Bribe the customer
 Use external pressure on competitor or
the customer
57
Take over director / partner
from a competitive company
58
You can try to establish a consulting company by convincing a
senior personal with a good relation with customers to join
you
When you can pull it off
 There is internal reason for the departure
(i.e. the director does not fill happy in the
company)
 He can walk away with customers
 There are no legal problems with
implementing the switch of customers
 There is no barrier related to the brand of
the company you are breaking apart
 The partner you taken over has to be able
to generate new customers as well
 There may be legal reasons for this move
to be favored by the consulting company
(i.e. they cannot keep certain business by
law)
Other departments in your old
company
The department / director you
want to join you
59
Use marketplaces
60
For some consulting services you can start with marketplaces
Step 1
 Find the right marketplace
for you
Step 2
 Do great job for a small
task
Step 3
 Try to move away from
marketplace and expand
the contract
61
You can try number of different type of markteplaces
Graphics Startups related Lawyers
General for
freelancer
62
Marketplaces are a good solution in a number of situations
You are offering simple service
You are targeting smaller customers
You need some reference
You are not that much into making
big money
Services where you have thousands
of customers
There is potential for longer
cooperation outside the
marketplace
63
Content Marketing
64
For some consulting services you can get customers by proper
content marketing
Step 1 – Generate Traffic
 Create content
 Generate traffic to your
blog
Step 2 – Get their emails
 Convert it to email list
Step 3 – Convert them
 Convert the list directly to
sales via short funnel or
long funnel
65
Content marketing is not easy and requires some things to be
successful
Your target group has to actively
look for info how to improve
Your target group should be present
in one of the social media
Your target group should be
identifiable by search terms or some
criteria
You have to create high value
content and unique
Content marketing takes time
Content marketing not always leads
to direct conversion
66
There are plenty of tools that you can use for content
marketing
Creation of content Traffic generationMarket research
67
Here is an example of content marketing used for one of our
brands
Post on the blog
Distribution
Recycling of content
Request for
proposal
Sales
68
Event Marketing
69
For more stubborn you have to go for events marketing
Step 1 – Create opportunity
 Organize or join events
 Create content that will
establish you as an expert
Step 2 – Take advantage of
opportunity
 Network during the events
 Set fixed targets in
number of business cards
that you have to acquire
Step 3 – Fast conversion
 Do the follow-up in the
next weeks: send them
your content, meet with
them, call them
 Hustle
70
For this method to work there are number of factors that
may improve the odds
 The ticket (value of potential contract) has to big
enough
 You have to have a high density of potential
customer in the event
 You have to be active - listen and provide value
and only after that try to sell (if he can become to
his benefit your customer)
 Test the short and the long funnel to see what
works better
71
Trainings Marketing
72
Similar yet more subtle to event methods is to go for
trainings
Step 1 - Attract
 Organize free open
training for your target
group
 The training has to have
unique content to
establish you as an expert
 You have to actively reach
them
Step 2 - Soft conversion
 Convert them to paid
trainings – advanced
version of the free
trainings
Step 3 - Hard conversion
 Convert them to
consulting services
73
Cold Calling
74
Unavoidable is trying cold calling
Step 1- Preparation
 Find source of leads
 Prepare – choose the right
sequence and the target group
you want to reach
 This is a first hypotheses that
you will change during your
tries
 Prepare all necessary tools:
script, ready made emails and
materials, CRM
Step 2-Cold calling
 Execute and modify till you get
to predictable stable model of
sales
Step 3 - Conversion
 Convert meetings into request
for proposals (RFP)
 Convert RFP to projects
75
In cod calling you have to have a sequence of events that you
will follow
Cold visit
Mail /
Cold email
Warm call Meeting Sales
Cold
email
Cold call
Warm
email
Warm
call
Meeting Sales
Example 1
Example 2
76
Cold email with
a piece of your
content and CTA
Cold email with
a piece of your
content and CTA
Cold email with
a piece of your
content and CTA
Cold email with
and invitation to
a first meeting
Meeting
Invitation to
free training
Convert to paid
training
Convert to
consulting
services
In cod calling you have to have a sequence of events that you
will follow
77
For more go to our extensive on-line course where you can get
all additional resources including real examples from our
practice
Click to check my course
How to start and run a successful consulting
business?
$190
$50
78
1 – man show
79
As in every service you try to turn time into money
80
If you are a 1-man show you have to carefully use your time
as it limited
Number of
available
hours
%
Utilization
Fee per
hour
Additional
revenues
170 30% 200 3 000
81
There are number of ways in which you can increase
the available hours Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
 You hire new employees, partners, co-workers
New
employees
Description When can be used
 Good solution when the growth is permanent
 There are new customers or product added
 In the case of entry-level recruitment there has to be
some career path for
 The employees should be less expensive than you or bring
new customers
 You have to have training system
 You subcontract part of the work to other
freelancers or a company
Subcontractors
 Good choice when the jump in projects is just temporary
 Good choice when you do not have the skills and
knowledge and you do not want to specialize in it
 You divide the work to be done into parts.
 The easier part, more repetitive you give to
virtual assistants
Virtual
Assistants
 Very good when the assistant is much cheaper than you
 Good choice when the assistant can create things that you
can sell
 Good choice both for temporary as well permanent
growth
82
Overall Labour Efficiency how much work there is in the work
?
Workday
Time that you can devote
Time left for real workLack of work
100%
54%
OLE =
100 %
54 %
x
x
98%
Work
98%
37%
No work due to
organizational
issues
Movement
70%
Work well done
70 %
Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
83
The biggest return you will get from improving your utility
Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
 Automate whatever you can so you have more
time to sell
Automation
Description Examples
 Emailing /Newsletters – Mail Chimp / GetResponse /
FreshMail
 Automation of small tasks i.e. twitting, putting some data
into table etc – Zapier, IFTTT
 Social Media – Buffer / Hubspot
 Calculators on your webpages
 Marketing Automation - Mail Chimp / GetResponse /
FreshMail / SalesManago / InfusionSoft / Hubspot
 Resousres on your webpage / YouTubie / Slidesharze /
Dropboxie
Improve the
efficiency of
team work
and the
cooperation
with
customers
 Improve the efficiency of teamwork and also the
way in which you communicate and exchange
info with customers
 Getting Things Done
 CRM – Google Sheet / Insightly / Close.io
 Task management tools: Trello / Nozbe / Leankit / Asana
/ Smartsheet
 Avoid email communication– Google Sheet / Slack /
asana
 Working on virtual space– Google Drive / Dropbox / 1-
Drive
84
The biggest return you will get from improving utility
Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
 You have to minimize the time you spend
travelling
Fewer
movements
and travels
and better
organization
Description Example
 Remote calls and conferences– Hangout s/ Skype
 Webinars
 Working on virtual space– Google Drive /
Dropbox / 1-Drive
 Round trips across the country to visit customers
Outsourcing /
specialization
 Find somebody to whom you can
outsource the repetitive part of you work
especially if he is better at it
 Interns
 Assistants
 Virtual Assistance
 Subcontractors
Standards,
templates and
modules
 Create you work on the basis of modules,
template and standards.
 In this way you will be able to reuse them
 Specialize in one product
 Templates and standards i.e. Excel analysis, sales
presentation, proposal etc.
 Turn non-standard presentation into modules in
which 80% are standard modules
85
Think also how to increase your price
Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
 You change the pricing depending on your
situation, availability resources and
demand
Dynamic
Pricing
Description When to use
 Use it when there is a big seasonality in demand
 Use it to sell in advance of time – similar to first
minutes
 Useful when you want to hide difference in the
price of similar service among customers – then
you have a price list and a bunch of different
discounts that blur the vision
 You can start earning depending on the
performance / success
 You can have installments
 You can have a complicated system of
different fees for different things
Change the
price formula
 Useful when you do not want to show the fee per
consultant that incidentally may be higher than
the Board Members’ salaries
 Introduce subscription
Switch to
subscription
model
 When you want to increase the demand for your
service
 When you have to compete with the in-house
departments
 When there are a lot of small task that you do not
want to negotiate separately
86
Last but not least create additional products
Liczba
dostępnych
godzin
lalka Stawka Godzinna
Dodatkowe
przychody
Books / e-books /
reports
On-line courses Off-line courses
Webinar PodcastFilms on youtube Audiobook
Affiliation
E-commerce Physical products –
i.e. games
Sponsoring
87
It is worth to have 1 main KPI that will let you say whether you
are heading in the right direction
Total time devote
to it
Total net income
from all sources
200 h
50 000 USD
250 USD / h
88
Tools you need in a consulting
company
89
Introduction to tools
90
List of the most important tools for consultant
Analyze Present Sales & Marketing
Knowledge
Management
Market research Team management
91
Standardize everything
92
Why it makes sense to standardize?
Easy to go through what
you have done so far
You can reuse your
products
Less versions to manage
Brain works faster with
standards
You can find faster what
you need
93
How to decide whether to standardize
Used by manyOften used
Last for longer time
Standardize
94
Below you will find examples of things standardized in
consulting and a typical company
Folder structure
Consulting
Naming of files
Proposals to customers
Typical company
Agreements
Deliverables
Analyses
Main processes
Internal documents
External documents
Main process
Dress code
Language of
communication
95
There are some rules for standardizing that you should follow
Use few standards
Internal standards
higher than external
Round up to closes
standard
Communicate standards
Teach standards
96
Create templates
97
Templates can save you a lot of time. They are area almost
ready made pieces of work that need some changes to be
used. It is great for repetitive work
98
How to decide whether to make templates
Often UsedCan be reused
Time-consuming
Template
99
Define what you should create templates for. In consulting we use
a lot of templates to make the repetitive work less time consuming
Sales presentation
Consulting
Emails
Data request
Project Time sheets
Proposal
Agreement
Folder structure
Deliverable
presentation
Dimensions
 For every product, branch
 All standard emails: about meetings, data request, workshop, sales emails,
thank you email
 For every product (project type) and branch – Word
 For every product (project type) – Word
 For every product (project type) – Word
 For every product (project type) and branch in Excel
 Library of standard slides with typical analyses to choose from
 For every product (project type) and branch – Excel
100
Create modules
101
Modules is something that helps you go beyond templates
and used them in a situation that seem not easy to be
standardized
102
Creating modules enables you to turn even things that
Sales
presentation
About the company (history, experience, offices)
Problem description
Proposed solution
Pricing
Team
Contact Details
Rather standard
Unique
103
Power Point presentations
104
What rules should be used for Power Point Presentations
Use the template
1 slide = 1 message
Agenda
Executive summary
Excel analysis for every
slide
Sources
Dates
Backup
Next version rule
Show money
105
The kids market will be slowly growing as a result of GDP
growth
3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144
2 804
2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407
1 328
1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380Total
Source: Euromonitor
Toys
Hardware
Fashion
Market size
In milions of EUR
106
Market size
In millions of EUR
3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144
2 804
2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407
1 328
1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380
Total
Source: Euromonitor
Toys
Hardware
Fashion
 The kids
market will
develop in will
be slowly
growing as a
result of GDP
growth
107
Market size
In millions of EUR
3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144
2 804
2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407
1 328
1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380
Total
Source: Euromonitor
Toys
Hardware
Fashion
 The kids
market will
develop in will
be slowly
growing as a
result of GDP
growth
The kids market will develop in will be slowly growing as a result of GDP
growth
108
Rules for Excel
109
What rules should be used when building analysis in Excel
Usage of colors
Consistency between
sheets
Pyramid principle
1-source rule
Repetition of variables
Shortcuts
No mouse
Description
Data source
Master sheet
110
The most useful functions
Basic functions
Financial /
Mathematical
Others
 SUMIF / SUMIFS
 COUNTIF / COUNTIFS
 HLOOKUP
 VLOOKUP
 MATCH
 SUMPRODUCT
 IF
 AND / OR
 IFERROR
 AVERAGEIF
 LEFT / RIGHT / MID
 FIND
 CONCATENATE
 YEAR / MONTH / DAY
 ROUND / ROUNDUP /
ROUNDDOWN
 TODAY
 VALUE
 WEEKDAY
 RAND / RANDBETWEEN
 MOD
 NPV
 IRR
 ABS
 MAX / MIN
 CORREL
 Pivot
 Slicer
 Relative addresses
 Formats
 Hyperlink
 Remove Duplicates
 Filters
 Sorting
 Data Validation
 Trace Dependents / Precedent
 Analysis Tool Pack
111
Create universal
structure of folders
112
In most cases in consulting you will be doing a lot of different
project and you may loose a track of what you have done
Supply chain
General audit
Cost cutting
Sales Force Management
Marketing improvement
Cost cutting
Supply chain
Supply chain
Sales Force Management
Sales Force Management
Marketing improvement
General audit
Supply chain
 After a few project you will be
lost – you will not remember
what was done on what project
 Consulting and many services
are bout managing knowledge
 If you organize the knowledge
properly you can reuse it on
other projects
 Therefore create universal
structure of folders
113
Below an example of structure used for consulting project
Customer
folder
Project A
folder
Admin
Legal
PBC
Area A
Area B
Deliverables
114
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115
Pricing
116
How you can price
consulting projects
117
The most useful pricing models are….
Fixed fee
 Difficult to define scope
 Non-standard project
 Scope evolvingTimes & Materials
 Simple projects
 Projects with big buffers
 Projects where you want to hide the fees
Success / performance
fee
 When performance can be measured by external KPIs
 To supplement previous methods
Limits
 To limit certain spending's esp. in the case of time and
materials limits (floors an caps are used)
Per usage
 This is used in many technical industries where you
cannot control the immediate result of the consulting
so link it with the usage / availability of certain
resource
DescriptionExample
 $ 100 K
Markups
 Markups can be a part of fixed fee structure and times
and materials
 Markup is put on purchases done by consulting
company for the project
 $ 200/h
 Traveling costs
 Food costs
 % of Target achieved
 $ 100 K for achieving
certain goal
 $ 200/h but no more
than $ 100 K
 $ 10/flight hour
 $ 20 K/plane
 15% on costs incurred
118
Dynamic pricing
119
In dynamic pricing you identify the low seasons and try to sell them at
lower price or at higher price
25%
50%
75%
100%
88%
63%
13%
43%
88%
83%
63%
50%
1 2 3 4 5 6 7 8 9 10 11 12
Low season
120
There are 2 conflicted approached to treat low seasons
Emergency approach
 You keep the people during low seasons
waiting for desperate customers that needs
the project now
 Since you have the resources you can help him
yet the price goes up significantly
 Such a structure can be a part of your regular
contract – at certain time during the year,
month, week you charge the client with higher
price or above certain number of man-hours;
for shorter reaction time
The logic behind
Price in low season with
respect to high season
 150%-200%
Fire sale approach
 In this approach you sale with discount
because the resources will be lost if not used
 50-80%
121
Managing consulting company
122
Organizational structure and
responsibilities
123
Partner
Director
Project
Manager
BA A
Project
Manager
A BA BA
Director
Project
Manager
BA BA
Project
Manager
A BA BA
Consulting companies operate using pretty flat structure…..
Market Research Department
Visual Department
Knowledge Base Department
124
Partner
Director
Project
Manager
Project
Manager
Director
Project
Manager
Project
Manager
Some of them even the Business Analyst and Associate keep
in a pool without fixed assignment to specific director or PM
Market Research Department
Visual Department
Knowledge Base Department
Business Analyst and Associate Pool
125
Partner
Executive
Director
Director
Project
Manager
BA Senior BA
Assistant BA
Project
Manager
BA BA BA
Director
Project
Manager
BA BA
Project
Manager
BA BA BA
Obviously bigger company tend to overcomplicate the
structure
126
What is the role of business analyst?
Business
Analyst
Associate
Senior
Associate (PM)
Director Partner
Consulting companies
McKinsey
Business
Analyst
Senior
Business
Analyst
Associate
Senior
Associate (PM)
Engagement
Manager
Associate
Principal
PrincipalDirector
127
Typical structure of a project
128
Below you will find some example of project duration for
projects done in management consulting
Business
Analyst
Associate
Senior
Associate (PM)
Director Partner
 Operational
Audit
Type of
project
Duration in
months
 3-5 1-3  1-2  1  0.2
 Performance
improvement
– 1 area
 2-3 1-3  1  1
 Strategy
project
 3-5 3-6  1  1  0.2
 Turn around  5-10 9-24  2-3  1  0.4  0.2
129
Rotation
130
Rotation is one of the nightmares of a consulting company. It will
differ on every position
Business
Analyst
Associate
Senior
Associate (PM)
Director Partner
 How long you
stay in years?
Category
 2-3  2-4  3-6  3-6
 % of people
that leave at
certain stage
 ?
 10-20%  20-30%  30-60%  10-30%  20%
131
Preparation for scaling
132
Introduction
133
At some point you will want to cross the bridge from your small
kingdom and rule the world
134
Recruitment
135
In the beginning you will be competing for the best
candidates from the best universities
Universities
Established consulting
brands You
136
Most management consulting workers are recruited from
business schools or exact science departments
Business Schools and
Department of
Economics
% of all candidates
 70%
% of all workers
 50%
Exact science (math,
physics, computer
science
 15%  30%
Medicine  5%  10%
Others  10%  10%
137
You can use number of methods to recruit
Comments
% of candidates
recruited
Direct recruitment to
specific position
 You have to build the whole recruitment process
 Usually it consists of logical – analytical test (GMAT
level) + interviews with your employees – 3-9
 Usually you recruit for entry-level positions
 50-70%
Internships
 They have to go through at least the part of the normal
recruitment – tests and 1-2 interviews
 Helps you test in real life the candidates
 You have to give them real work and not making coffee
 10-30%
Closer cooperation with
students and student
organizations
 You can either recruit directly to specific position or to
internship
 It can be an event, ambassador program, cases solved
with students
 10-30%
Closer cooperation with
the universities
 You can either recruit directly to specific position or to
internship
 It can be event, lecture, joint conference, projects done
together.
 10-30%
138
What improves your odds of getting good candidates for
entry level position?
 Let them do real work
 Train them better and faster than other
 Make sure that after working for you they got great jobs
 Stay in touch with your alumni
 Take advantage of stronger brands of your customers
 Put them to work for your customers
 Work hand-in-hand with student organization to actively
search for the best candidates
 Go to universities with lower rankings
139
Trainings
140
To create proper training you have to take care of number of
issues
Targeted end-profile of a
employee on every level
Time
 Option 1: 1-2 months a year
 Option 2: 1 day a week
Forms of training
 Lectures
 Practical exercises esp. oriented at mastering certain consulting skills: Excel,
communicating with slides etc.
 Workshops devote to certain area, skill, industry, trend
 Case studies
 Lesson learnt
Resources
 Money
 Coaches / Mentors
Sales Marketing Operations Programming
 Current level
 Target level
141
For more go to our extensive on-line course where you can get
all additional resources including real examples from our
practice
Click to check my course
How to start and run a successful consulting
business?
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142
Check my presentation on on-line models to understand
them properly
Market research
Practical guide for startups and entrepreneurs
presentation
143
Check my extensive presentation on productivity hacks to see
how you can me 10x more productive
Management consultant
productivity hacks
How to be lazy and still get things done
presentation
144
Check my presentation on on-line models to understand
them properly
Business models
Practical guide for startups and entrepreneurs
presentation
145
Check my presentation on on-line models to understand
them properly
How to open a successful
restaurant
A practical guide
presentation
146
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www
147
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How to start and run consulting firm fast and efficiently

  • 1. 1 How to start and run a successful consulting business? Practical guide
  • 2. 2 In this presentation I will show you how to start and run consulting business. You will find here a lot of practical tips
  • 3. 3 Source of ideas for consulting business We will start by showing were you can find ideas for consulting business
  • 4. 4 Source of ideas for consulting business Getting your first customers Pricing Tools Later we will discuss ways in which you can get new customers, what tools you can use and how you should set up the pricing
  • 5. 5 Source of ideas for consulting business Getting your first customers Pricing Tools Scaling of the business Add-on business Once you are done with the basics I will show you how to scale the business and what add-ons you can have
  • 6. 6 Source of ideas for consulting business Getting your first customers Pricing Tools Scaling of the business Add-on business 1-man show freelancer As a separate part we will discuss the small consulting practices (1-man show / freelancers)
  • 7. 7 What I will show in part of extensive on-line course where you can get all additional resources including Excels Click to check my course How to start and run a successful consulting business? $190 $50
  • 9. 9 The essence of consulting
  • 11. 11 With consulting you can reach things that were out of your reach Consulting  Professional help in achieving certain goal  Way to fill-in the gaps =
  • 12. 12 You maybe surprised but actually there are plenty of good reasons why companies hire “overpaid” consultants They want to get better / faster / more efficient They do not have certain competence /skill They lack capacity to do something Sudden unrealistic deadlines Required by owner or regulator Turn arounds They need independent view One-off events
  • 13. 13 Consultants help you move faster in the right direction
  • 14. 14 Around what you can build consulting?
  • 15. 15 You can build your consulting around specific customer segment Around segment Examples
  • 16. 16 ….or around service / product Around segment Examples Around service / product
  • 17. 17 Some companies use a mix of those 2 tactics Around segment Examples Around service / product
  • 18. 18 Where you can get idea for your consulting businesses?
  • 20. 20 If you have already some business existing, you can create consulting to help you solve your problem. First you create internal department to take care of your need Old business New department
  • 21. 21 Once you get the proper quality of service and profitability you grow it and separate into stand alone business Old business Consulting business
  • 22. 22 There are plenty of nice examples of such companies Old business Consulting business Examples of such businesses  Consulting on Adwords / facebook / SEO / content marketing that you needed to master and there was no decent provider  Consulting to support the sales of software, (including SaaS) that you have produced  Consulting to support good usage, maintenance of your B2B product (machine, production line)
  • 23. 23 For this method to work you need to have certain things occurring  You are one of the best / first users  You have easy access to the underlying good  You have some cost advantage because you buy in bulk  The specific underlying good / service is complicated to master or changes fast  Customer do not want to make out of the knowledge you are providing competitive advantage
  • 25. 25 You can also create consulting business by carving out a department from existing company Current departments
  • 26. 26 You have to identify the department that you will transform into stand alone business and start running it as a separate business unit Old departments Carved out part that will be changed into consulting
  • 27. 27 Once it is big enough you can make it into separate entity Old departments Carved out part that will be changed into consulting
  • 28. 28 There are plenty of nice examples of applying this strategy Examples of such businesses  Marketing departments  Sales department  Analytics / Market Research / Pricing departments  R&D departments  Technical support  Shared Service Center  Project Management Old departments Carved out part that will be changed into consulting
  • 29. 29 For this method to work you need to have certain things occur  People in the specific departments have very volatile utilization  Running the department requires huge investment into people, trainings and software  Department has become relatively big and the company does not have skills in running a consulting company  The demand of the company for the service offered by the department is irregular
  • 31. 31 One of the ways to clone is to clone 1:1 the whole business Examples of such businesses  Consulting on Adwords / facebook / SEO / content marketing that you needed to master and there was no decent provider  Consulting to support the sales of software, (including SaaS) that you have produced  Consulting to support good usage, maintenance of your B2B product (machine, production line)
  • 32. 32 For this method to work there are number of factors that may improve the odds  Market is mature and ready for specific consulting services  There are foreign companies that are used to this type of service  The group you are targeting is sufficiently big to support a business  There are no cultural barriers to using consulting  Fees are acceptable  Low level of government in the economy
  • 33. 33 You can also clone the idea and adjust it to a different segment / group of customers
  • 34. 34 For this method to work there are number of factors that may improve the odds  Market is mature and ready for specific consulting services  The group / market to which you are switching has to be big enough to support a business  The consulting companies you are coping for some reason have low incentive to enter specific market (low size, their strategy that assumes focus etc.)  There is a niche that is not served well by current consulting companies
  • 35. 35 Walk away and become independent
  • 36. 36 In same cases the consulting business is created by a bit forceful division Other departments in your old company Your departments
  • 37. 37 You either join another big corporation or you build your own business Other departments in your old company Your departments Other departments in the new company
  • 38. 38 There are plenty of good examples for both cases Examples of such businesses  Department in banks  Group of people / department in consulting – usually serving specific group of customers or 1 type of service  Department from training company  Department from software company Other departments in your old company Your departments Other departments in the new company
  • 39. 39 If you have some business you can creating consulting to help you solve your problem Examples of such businesses  Department in banks  Group of people / department in consulting – usually serving specific group of customers or 1 type of service  Department from training company  Department from software company Other departments in your old company Your departments Other departments in the new company
  • 40. 40 For this method to work there are number of factors that may improve the odds  The customer will follow you  You take all the competence from your previous company  The company you join has almost none of your competence  The company you join has customer to whom you can sell your product  You can take the references  Low threat of second-wave division  You have sufficient money gathered to survive the dry season and projects sliding
  • 41. 41 Product / service to consulting
  • 42. 42 You can create a consulting on the basis of existing product or service Agency Implementation consulting company Implementation consulting (set-up, purchase, run)
  • 43. 43 For this method to work there are number of factors that may improve the odds  Product or service is complicated and changes a lot  The customer has no resources to master it  It is a one-off  You have better access to the producer of the product / service  You have the support of the producer
  • 44. 44 For more go to our extensive on-line course where you can get all additional resources including Excels Click to check my course How to start and run a successful consulting business? $190 $50
  • 45. 45 Business model of a service company
  • 47. 47 Service companies in general are all about converting your workers time into money Man-hours
  • 48. 48 There are some general rules that you should follow Measure man-hours Measure tasks Stay productive and efficient Make sure supply matches demand Forecast and create demand Manage supply ahead of time Make sure that margins are OK
  • 49. 49 Business model of a consulting company in Excel
  • 50. 50 The typical model of a service model can be presented using this logic  % Utilization# hours available # of billable hours Revenues Gross Margin Operational Profit Net Profit  Hourly fee  HQ costs  Bonuses  Interest  % Gross Margin  Wages
  • 53. 53 The easiest way to get the customer is to steal them from your competitors
  • 54. 54 As a first step you have to show the customer somehow your offer, especially when the relation between the customer and current consulting company is about to end
  • 55. 55 If you are successful in your move you will get a launching / reference customer
  • 56. 56 There are number of situation when you can pull it off successfully When you can pull it off  Carve out  Walk away with customers  Buy out the customer  Bribe the customer  Use external pressure on competitor or the customer
  • 57. 57 Take over director / partner from a competitive company
  • 58. 58 You can try to establish a consulting company by convincing a senior personal with a good relation with customers to join you When you can pull it off  There is internal reason for the departure (i.e. the director does not fill happy in the company)  He can walk away with customers  There are no legal problems with implementing the switch of customers  There is no barrier related to the brand of the company you are breaking apart  The partner you taken over has to be able to generate new customers as well  There may be legal reasons for this move to be favored by the consulting company (i.e. they cannot keep certain business by law) Other departments in your old company The department / director you want to join you
  • 60. 60 For some consulting services you can start with marketplaces Step 1  Find the right marketplace for you Step 2  Do great job for a small task Step 3  Try to move away from marketplace and expand the contract
  • 61. 61 You can try number of different type of markteplaces Graphics Startups related Lawyers General for freelancer
  • 62. 62 Marketplaces are a good solution in a number of situations You are offering simple service You are targeting smaller customers You need some reference You are not that much into making big money Services where you have thousands of customers There is potential for longer cooperation outside the marketplace
  • 64. 64 For some consulting services you can get customers by proper content marketing Step 1 – Generate Traffic  Create content  Generate traffic to your blog Step 2 – Get their emails  Convert it to email list Step 3 – Convert them  Convert the list directly to sales via short funnel or long funnel
  • 65. 65 Content marketing is not easy and requires some things to be successful Your target group has to actively look for info how to improve Your target group should be present in one of the social media Your target group should be identifiable by search terms or some criteria You have to create high value content and unique Content marketing takes time Content marketing not always leads to direct conversion
  • 66. 66 There are plenty of tools that you can use for content marketing Creation of content Traffic generationMarket research
  • 67. 67 Here is an example of content marketing used for one of our brands Post on the blog Distribution Recycling of content Request for proposal Sales
  • 69. 69 For more stubborn you have to go for events marketing Step 1 – Create opportunity  Organize or join events  Create content that will establish you as an expert Step 2 – Take advantage of opportunity  Network during the events  Set fixed targets in number of business cards that you have to acquire Step 3 – Fast conversion  Do the follow-up in the next weeks: send them your content, meet with them, call them  Hustle
  • 70. 70 For this method to work there are number of factors that may improve the odds  The ticket (value of potential contract) has to big enough  You have to have a high density of potential customer in the event  You have to be active - listen and provide value and only after that try to sell (if he can become to his benefit your customer)  Test the short and the long funnel to see what works better
  • 72. 72 Similar yet more subtle to event methods is to go for trainings Step 1 - Attract  Organize free open training for your target group  The training has to have unique content to establish you as an expert  You have to actively reach them Step 2 - Soft conversion  Convert them to paid trainings – advanced version of the free trainings Step 3 - Hard conversion  Convert them to consulting services
  • 74. 74 Unavoidable is trying cold calling Step 1- Preparation  Find source of leads  Prepare – choose the right sequence and the target group you want to reach  This is a first hypotheses that you will change during your tries  Prepare all necessary tools: script, ready made emails and materials, CRM Step 2-Cold calling  Execute and modify till you get to predictable stable model of sales Step 3 - Conversion  Convert meetings into request for proposals (RFP)  Convert RFP to projects
  • 75. 75 In cod calling you have to have a sequence of events that you will follow Cold visit Mail / Cold email Warm call Meeting Sales Cold email Cold call Warm email Warm call Meeting Sales Example 1 Example 2
  • 76. 76 Cold email with a piece of your content and CTA Cold email with a piece of your content and CTA Cold email with a piece of your content and CTA Cold email with and invitation to a first meeting Meeting Invitation to free training Convert to paid training Convert to consulting services In cod calling you have to have a sequence of events that you will follow
  • 77. 77 For more go to our extensive on-line course where you can get all additional resources including real examples from our practice Click to check my course How to start and run a successful consulting business? $190 $50
  • 78. 78 1 – man show
  • 79. 79 As in every service you try to turn time into money
  • 80. 80 If you are a 1-man show you have to carefully use your time as it limited Number of available hours % Utilization Fee per hour Additional revenues 170 30% 200 3 000
  • 81. 81 There are number of ways in which you can increase the available hours Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody  You hire new employees, partners, co-workers New employees Description When can be used  Good solution when the growth is permanent  There are new customers or product added  In the case of entry-level recruitment there has to be some career path for  The employees should be less expensive than you or bring new customers  You have to have training system  You subcontract part of the work to other freelancers or a company Subcontractors  Good choice when the jump in projects is just temporary  Good choice when you do not have the skills and knowledge and you do not want to specialize in it  You divide the work to be done into parts.  The easier part, more repetitive you give to virtual assistants Virtual Assistants  Very good when the assistant is much cheaper than you  Good choice when the assistant can create things that you can sell  Good choice both for temporary as well permanent growth
  • 82. 82 Overall Labour Efficiency how much work there is in the work ? Workday Time that you can devote Time left for real workLack of work 100% 54% OLE = 100 % 54 % x x 98% Work 98% 37% No work due to organizational issues Movement 70% Work well done 70 % Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody
  • 83. 83 The biggest return you will get from improving your utility Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody  Automate whatever you can so you have more time to sell Automation Description Examples  Emailing /Newsletters – Mail Chimp / GetResponse / FreshMail  Automation of small tasks i.e. twitting, putting some data into table etc – Zapier, IFTTT  Social Media – Buffer / Hubspot  Calculators on your webpages  Marketing Automation - Mail Chimp / GetResponse / FreshMail / SalesManago / InfusionSoft / Hubspot  Resousres on your webpage / YouTubie / Slidesharze / Dropboxie Improve the efficiency of team work and the cooperation with customers  Improve the efficiency of teamwork and also the way in which you communicate and exchange info with customers  Getting Things Done  CRM – Google Sheet / Insightly / Close.io  Task management tools: Trello / Nozbe / Leankit / Asana / Smartsheet  Avoid email communication– Google Sheet / Slack / asana  Working on virtual space– Google Drive / Dropbox / 1- Drive
  • 84. 84 The biggest return you will get from improving utility Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody  You have to minimize the time you spend travelling Fewer movements and travels and better organization Description Example  Remote calls and conferences– Hangout s/ Skype  Webinars  Working on virtual space– Google Drive / Dropbox / 1-Drive  Round trips across the country to visit customers Outsourcing / specialization  Find somebody to whom you can outsource the repetitive part of you work especially if he is better at it  Interns  Assistants  Virtual Assistance  Subcontractors Standards, templates and modules  Create you work on the basis of modules, template and standards.  In this way you will be able to reuse them  Specialize in one product  Templates and standards i.e. Excel analysis, sales presentation, proposal etc.  Turn non-standard presentation into modules in which 80% are standard modules
  • 85. 85 Think also how to increase your price Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody  You change the pricing depending on your situation, availability resources and demand Dynamic Pricing Description When to use  Use it when there is a big seasonality in demand  Use it to sell in advance of time – similar to first minutes  Useful when you want to hide difference in the price of similar service among customers – then you have a price list and a bunch of different discounts that blur the vision  You can start earning depending on the performance / success  You can have installments  You can have a complicated system of different fees for different things Change the price formula  Useful when you do not want to show the fee per consultant that incidentally may be higher than the Board Members’ salaries  Introduce subscription Switch to subscription model  When you want to increase the demand for your service  When you have to compete with the in-house departments  When there are a lot of small task that you do not want to negotiate separately
  • 86. 86 Last but not least create additional products Liczba dostępnych godzin lalka Stawka Godzinna Dodatkowe przychody Books / e-books / reports On-line courses Off-line courses Webinar PodcastFilms on youtube Audiobook Affiliation E-commerce Physical products – i.e. games Sponsoring
  • 87. 87 It is worth to have 1 main KPI that will let you say whether you are heading in the right direction Total time devote to it Total net income from all sources 200 h 50 000 USD 250 USD / h
  • 88. 88 Tools you need in a consulting company
  • 90. 90 List of the most important tools for consultant Analyze Present Sales & Marketing Knowledge Management Market research Team management
  • 92. 92 Why it makes sense to standardize? Easy to go through what you have done so far You can reuse your products Less versions to manage Brain works faster with standards You can find faster what you need
  • 93. 93 How to decide whether to standardize Used by manyOften used Last for longer time Standardize
  • 94. 94 Below you will find examples of things standardized in consulting and a typical company Folder structure Consulting Naming of files Proposals to customers Typical company Agreements Deliverables Analyses Main processes Internal documents External documents Main process Dress code Language of communication
  • 95. 95 There are some rules for standardizing that you should follow Use few standards Internal standards higher than external Round up to closes standard Communicate standards Teach standards
  • 97. 97 Templates can save you a lot of time. They are area almost ready made pieces of work that need some changes to be used. It is great for repetitive work
  • 98. 98 How to decide whether to make templates Often UsedCan be reused Time-consuming Template
  • 99. 99 Define what you should create templates for. In consulting we use a lot of templates to make the repetitive work less time consuming Sales presentation Consulting Emails Data request Project Time sheets Proposal Agreement Folder structure Deliverable presentation Dimensions  For every product, branch  All standard emails: about meetings, data request, workshop, sales emails, thank you email  For every product (project type) and branch – Word  For every product (project type) – Word  For every product (project type) – Word  For every product (project type) and branch in Excel  Library of standard slides with typical analyses to choose from  For every product (project type) and branch – Excel
  • 101. 101 Modules is something that helps you go beyond templates and used them in a situation that seem not easy to be standardized
  • 102. 102 Creating modules enables you to turn even things that Sales presentation About the company (history, experience, offices) Problem description Proposed solution Pricing Team Contact Details Rather standard Unique
  • 104. 104 What rules should be used for Power Point Presentations Use the template 1 slide = 1 message Agenda Executive summary Excel analysis for every slide Sources Dates Backup Next version rule Show money
  • 105. 105 The kids market will be slowly growing as a result of GDP growth 3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144 2 804 2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407 1 328 1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380Total Source: Euromonitor Toys Hardware Fashion Market size In milions of EUR
  • 106. 106 Market size In millions of EUR 3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144 2 804 2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407 1 328 1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380 Total Source: Euromonitor Toys Hardware Fashion  The kids market will develop in will be slowly growing as a result of GDP growth
  • 107. 107 Market size In millions of EUR 3 247 3 480 3 473 3 503 3 537 3 583 3 626 3 689 3 750 3 806 3 857 3 911 3 965 4 011 4 055 4 104 4 144 2 804 2 862 2 855 2 880 2 908 2 946 2 981 3 033 3 084 3 130 3 171 3 216 3 260 3 298 3 334 3 374 3 407 1 328 1 392 1 389 1 401 1 415 1 433 1 450 1 476 1 500 1 523 1 543 1 565 1 586 1 605 1 622 1 641 1 658 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 8 058 8 198 8 334 8 459 8 570 8 692 8 811 8 914 9 012 9 119 9 2097 9637 8597 7857 7177 7347 380 Total Source: Euromonitor Toys Hardware Fashion  The kids market will develop in will be slowly growing as a result of GDP growth The kids market will develop in will be slowly growing as a result of GDP growth
  • 109. 109 What rules should be used when building analysis in Excel Usage of colors Consistency between sheets Pyramid principle 1-source rule Repetition of variables Shortcuts No mouse Description Data source Master sheet
  • 110. 110 The most useful functions Basic functions Financial / Mathematical Others  SUMIF / SUMIFS  COUNTIF / COUNTIFS  HLOOKUP  VLOOKUP  MATCH  SUMPRODUCT  IF  AND / OR  IFERROR  AVERAGEIF  LEFT / RIGHT / MID  FIND  CONCATENATE  YEAR / MONTH / DAY  ROUND / ROUNDUP / ROUNDDOWN  TODAY  VALUE  WEEKDAY  RAND / RANDBETWEEN  MOD  NPV  IRR  ABS  MAX / MIN  CORREL  Pivot  Slicer  Relative addresses  Formats  Hyperlink  Remove Duplicates  Filters  Sorting  Data Validation  Trace Dependents / Precedent  Analysis Tool Pack
  • 112. 112 In most cases in consulting you will be doing a lot of different project and you may loose a track of what you have done Supply chain General audit Cost cutting Sales Force Management Marketing improvement Cost cutting Supply chain Supply chain Sales Force Management Sales Force Management Marketing improvement General audit Supply chain  After a few project you will be lost – you will not remember what was done on what project  Consulting and many services are bout managing knowledge  If you organize the knowledge properly you can reuse it on other projects  Therefore create universal structure of folders
  • 113. 113 Below an example of structure used for consulting project Customer folder Project A folder Admin Legal PBC Area A Area B Deliverables
  • 114. 114 For more go to our extensive on-line course where you can get all additional resources including real examples from our practice Click to check my course How to start and run a successful consulting business? $190 $50
  • 116. 116 How you can price consulting projects
  • 117. 117 The most useful pricing models are…. Fixed fee  Difficult to define scope  Non-standard project  Scope evolvingTimes & Materials  Simple projects  Projects with big buffers  Projects where you want to hide the fees Success / performance fee  When performance can be measured by external KPIs  To supplement previous methods Limits  To limit certain spending's esp. in the case of time and materials limits (floors an caps are used) Per usage  This is used in many technical industries where you cannot control the immediate result of the consulting so link it with the usage / availability of certain resource DescriptionExample  $ 100 K Markups  Markups can be a part of fixed fee structure and times and materials  Markup is put on purchases done by consulting company for the project  $ 200/h  Traveling costs  Food costs  % of Target achieved  $ 100 K for achieving certain goal  $ 200/h but no more than $ 100 K  $ 10/flight hour  $ 20 K/plane  15% on costs incurred
  • 119. 119 In dynamic pricing you identify the low seasons and try to sell them at lower price or at higher price 25% 50% 75% 100% 88% 63% 13% 43% 88% 83% 63% 50% 1 2 3 4 5 6 7 8 9 10 11 12 Low season
  • 120. 120 There are 2 conflicted approached to treat low seasons Emergency approach  You keep the people during low seasons waiting for desperate customers that needs the project now  Since you have the resources you can help him yet the price goes up significantly  Such a structure can be a part of your regular contract – at certain time during the year, month, week you charge the client with higher price or above certain number of man-hours; for shorter reaction time The logic behind Price in low season with respect to high season  150%-200% Fire sale approach  In this approach you sale with discount because the resources will be lost if not used  50-80%
  • 123. 123 Partner Director Project Manager BA A Project Manager A BA BA Director Project Manager BA BA Project Manager A BA BA Consulting companies operate using pretty flat structure….. Market Research Department Visual Department Knowledge Base Department
  • 124. 124 Partner Director Project Manager Project Manager Director Project Manager Project Manager Some of them even the Business Analyst and Associate keep in a pool without fixed assignment to specific director or PM Market Research Department Visual Department Knowledge Base Department Business Analyst and Associate Pool
  • 125. 125 Partner Executive Director Director Project Manager BA Senior BA Assistant BA Project Manager BA BA BA Director Project Manager BA BA Project Manager BA BA BA Obviously bigger company tend to overcomplicate the structure
  • 126. 126 What is the role of business analyst? Business Analyst Associate Senior Associate (PM) Director Partner Consulting companies McKinsey Business Analyst Senior Business Analyst Associate Senior Associate (PM) Engagement Manager Associate Principal PrincipalDirector
  • 128. 128 Below you will find some example of project duration for projects done in management consulting Business Analyst Associate Senior Associate (PM) Director Partner  Operational Audit Type of project Duration in months  3-5 1-3  1-2  1  0.2  Performance improvement – 1 area  2-3 1-3  1  1  Strategy project  3-5 3-6  1  1  0.2  Turn around  5-10 9-24  2-3  1  0.4  0.2
  • 130. 130 Rotation is one of the nightmares of a consulting company. It will differ on every position Business Analyst Associate Senior Associate (PM) Director Partner  How long you stay in years? Category  2-3  2-4  3-6  3-6  % of people that leave at certain stage  ?  10-20%  20-30%  30-60%  10-30%  20%
  • 133. 133 At some point you will want to cross the bridge from your small kingdom and rule the world
  • 135. 135 In the beginning you will be competing for the best candidates from the best universities Universities Established consulting brands You
  • 136. 136 Most management consulting workers are recruited from business schools or exact science departments Business Schools and Department of Economics % of all candidates  70% % of all workers  50% Exact science (math, physics, computer science  15%  30% Medicine  5%  10% Others  10%  10%
  • 137. 137 You can use number of methods to recruit Comments % of candidates recruited Direct recruitment to specific position  You have to build the whole recruitment process  Usually it consists of logical – analytical test (GMAT level) + interviews with your employees – 3-9  Usually you recruit for entry-level positions  50-70% Internships  They have to go through at least the part of the normal recruitment – tests and 1-2 interviews  Helps you test in real life the candidates  You have to give them real work and not making coffee  10-30% Closer cooperation with students and student organizations  You can either recruit directly to specific position or to internship  It can be an event, ambassador program, cases solved with students  10-30% Closer cooperation with the universities  You can either recruit directly to specific position or to internship  It can be event, lecture, joint conference, projects done together.  10-30%
  • 138. 138 What improves your odds of getting good candidates for entry level position?  Let them do real work  Train them better and faster than other  Make sure that after working for you they got great jobs  Stay in touch with your alumni  Take advantage of stronger brands of your customers  Put them to work for your customers  Work hand-in-hand with student organization to actively search for the best candidates  Go to universities with lower rankings
  • 140. 140 To create proper training you have to take care of number of issues Targeted end-profile of a employee on every level Time  Option 1: 1-2 months a year  Option 2: 1 day a week Forms of training  Lectures  Practical exercises esp. oriented at mastering certain consulting skills: Excel, communicating with slides etc.  Workshops devote to certain area, skill, industry, trend  Case studies  Lesson learnt Resources  Money  Coaches / Mentors Sales Marketing Operations Programming  Current level  Target level
  • 141. 141 For more go to our extensive on-line course where you can get all additional resources including real examples from our practice Click to check my course How to start and run a successful consulting business? $190 $50
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  • 147. 147 For more go to our extensive on-line course where you can get all additional resources including real examples from our practice Click to check my course How to start and run a successful consulting business? $190 $50