There are many benefits associated with intentionally growing our consulting and/or training firms. Without reduced dependence on the individual owner, it is usually impossible to sell the company for a reasonable price. There is the thrill of achievement, the feeling of accomplishment, and the joy of having created something bigger than yourself. Growing a professional services firm brings the synergy of colleagues, reduced isolation, and the availability of trusted backup. There’s the promise of higher compensation, profits, and more vacation time. The size of your firm does matter to many client organizations. It is clearly easier to attract desirable clients and projects when your prospects don’t have to worry that their project will stall if/when you get busy or develop an illness. The benefit I have valued the most over the years is the first hand experience with the challenges faced by my clients. Academic learning (even from Wharton) only takes you so far.
Yes, of course we can grow our practices through subcontractors and alliances. I have found that these methods are more advantageous to firms that are not really seeking sustained growth and have a “respond-to-requests” strategy. Investment in your own team is particularly important if your firm has a unique approach or niche. Even with licensing, there are clear risks associated with teaching subcontractors proprietary methodology.
It’s easy for leader(s) of consulting and/or training firms to SAY that we want our firms to grow. It’s another to actually do it. For the past 30 years, I have been helping companies (including over 100 professional service firms) achieve accelerated (some say aggressive) growth with sustained profitability® . My clients seek a minimum of 50% growth per year. I have become convinced that real growth requires the development of a completely different mindset.
This is by no means an exhaustive list, but here are:
12 Ways You Can Tell If You Have a Mindset That Would Interfere with Achieving Intentional Growth
1. Do you view the roles of Director of Investor Relations, Recruitment Director, Professional Development Director, Facility/Equipment Manager, Legal, Acquisitions Director, IT Manager, and Research & Development Director as unnecessary or dormant roles? Are you convinced that YOU will just address those areas on a few occasions across the life of your business and certainly won’t need full time assistance? If you do see the value in these functions, do you question whether you should bring in people with proven expertise?
2. Do you think that being the only owner is superior to having multiple partners? If you have considered having a partner, do you assume that you must retain 51% no matter what?
3. Do you think that business development (marketing, sales, repeat business) should be handled only by the individual consultant or trainer handling an account? Do you question the value of tracking sales projections, the average size of contracts, conversion and closing percentages, and the duration of the buying cycle?
4. Are you reluctant to invite experienced people to join your firm because you can’t imagine how you will afford to pay them? If you are tempted to bring in someone with experience, would you be reluctant to ask for a business proposal and stay stuck in boss/employee interviews?
5. Are you reluctant to establish a real board of directors? If you did establish a board, would you think in terms of an advisory committee or select only people who would tell you what you want to hear instead of what you need to be told? Is it difficult to imagine yourself presenting information about your business to a group of experienced, bright people who will hold you accountable for leadership, progress in building the value of the company and for profits?
6. Are you reluctant to continue to invest in the business after you have earned college tuition for your children and live in a nice house on the hill overlooking a lake?
7. If you view yourself as the lead practitioner, are you hesitant to hire another person to serve as President or CEO of the firm? If you have considered sharing the leadership, would you prefer a less experienced, deferential person? Do you assume no one could complement your focus on clients with a competent focus on the company and its people?
8. Do you assume you would never need state of the art technology, including complex relational databases, video conferencing and true e commerce?
9. Do you view the role of team leader as strictly client focused rather than related to building capacity, teaching skills, and ensuring smooth succession? Do you provide compensation and incentives based only on sales, billable time, and/or customer satisfaction? Do you assume that “not much will have changed” between the previous and current employee evaluations (if you do them at all)?
10. Do you measure projects and revenue in thousands instead of millions? Do you resist the shift to thinking in terms of ratios and percentages instead of dollars? Do you hesitate to share financial information with other people in the firm? Are you the only person who will ever have control over the budget and/or operating account of the business?
11. Do you view outside investors as “vulture capitalists”? Is it difficult to imagine doing something on a scale that would be warrant the attention of and be attractive to outside investors?
12. Do you find yourself backing off when an idea will involve lawyers? Do you still think that you’ll only ever need one attorney and he/she should be able to handle anything you bring to them? Are you reluctant to take a chance on having employees because you dread an employee-related lawsuit? Does the vocabulary related to growth strategies sound like a foreign legalese language that you don’t really want to learn (acquisitions, mergers, roll ups, an IPO, an ESOP, franchising, licensing, geographic expansion, increased channel control, joint venture, etc.)