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Conventional Business Consultancy
By Dr. Mark D. Yateswww.businessconsultancyonestopshop.com
 
Taken from The Art Of Business War Book by Dr. Mark D. Yates
Historically the following business model formula is followed by most new consultantsand a high percentage of long term consultants.
Step 1:
Graduate from training programme.
Step 2:
Purchase business leads, usually a minimum order of 10 leads at a ratebeginning at £65 rising up to £125 per lead. Taking the lowest price figure this equals£650.00 at your cost.
Step 3:
Split these leads down into one per day over a 10 day period.
Step 4:
Conduct 2 hours research and preparation about each client’s visit at your cost.
Step 5:
Travel to each client’s business, usually within a 50 mile radius at your cost.
Step 6:
Spend 2 to 4 hours identifying your prospective client’s business needs andadvising etc, at your cost.
Step 7:
Drive home & spend another 2 hours writing up your notes at your cost.
Step 8:
Repeat this procedure 9 more times at your own cost. Total time invested 10 days. Fees received NONE. You have provided this service FREEof charge. Total work income lost 10 days at £500 per day, (which is a very low daily rate,) you havelost £5,000. Total price of your leads = £650.00.Fuel & expenses = approx’ £350.00 Total cost to you = £6,000.Average conversion rate of FREE service clients into fee paying clients is approximatelyone in ten, if you’re lucky.If this isn’t a sorry enough window into how to run a bad consultancy business, buckle upbecause it gets worse.If your bill out rate is £500 per day then you have to work another 10 days for your oneout of 10 converted clients before you recoup your initial investment.Now if I was to play the Devil’s Advocate for a moment and I was one of your 10 FREEprospective client’s then the two questions I would be asking you as the business growthconsultant is:1. “Why would I ever dream of paying for your business advice when your own personalbusiness model is so seriously flawed?”2. “Are you going to suggest that I follow your lead and give away 10 days of my timeFREE to my customers in the hope of converting 1 out of 10 into fee paying customers.”Now I’m fully aware that as consultants we have to fail periodically in order to maintain astate of awareness of opportunities for improvement and continuous professional
 
development but to say this business model is outrageous would be the understatementof the decade.In my experience of talking to hundreds of business consultants and listening to evenmore business owner directors, one thing shines through in glorious transparency withthis flawed business model and it’s this; ‘ very, very few business owners attach anyperceived value to a business consultant who offer his or her consultancy services FREEof charge.’ This means that you are further pre-programmed for failure when turning uptrying to close a consultancy business deal with the business owner. Now as in all thingsthere are exceptions to this rule and I personally know of some serious heavyweightconsultants who close about 20% to 30% of these consultations but these top closers arein 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 abusiness. 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 thisway you are going to need an escape route sooner than you think.As business growth specialists the reason for establishing business relationships whichresult 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 perceivedvalue 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 spend2 to 3 hours of preparation for your service FREE of charge. Then ask them to travel upto 50 miles to visit you at home or your office FREE of time charge and ask THEM TO PAYfor their own fuel to visit you. Then ask them to provide you with up to 2 to 4 hours of their time as they diagnose your problems and then explain how to fix it FREE of charge. Then ask them to go back to their workplace and spend another 2 to 4 hours FREE of charge to draft out a written consultation report for you. If you think the average JoePlumber or Joe Mechanic would even consider this on the slim chance that he or she willeventually convert 1 in 10 of these FREE service customers into paying clients, then Ihave just one thing to say to you. Please forward me their details as I have a leaky tapand a knocking sound coming from my car engine and it would be so nice to get themrepaired 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 advocateto new consultancy graduates. The old saying of, “if you keep doing what you are doing, you’ll keep getting what you’regetting” rings true. If this is the premise on which you plan to grow your consultancybusiness then you are by definition pre-programmed for failure. The percentage rate forsuccess is minimal and the small percentage of clients you might eventually hook willend 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 holidayperiods. 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 eventduties to help grow their business. This leaves 154 actual working days in which to
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