New question from a reader:
"Danilo, so happy to have found this blog. Quick q: We've already started to discuss and set goals for 2023, the most important of them being total sales. How do you approach this? Should the goal be increasing our sales by 10%, 20%, X (any other subjective number)? Should we use an industry benchmark? Should we follow our gut and be incredibly ambitious?"
I've replied and will continue this discussion privately with this consultancy's partners. But there's one reason why I'm sharing his message here: I believe this is the wrong question to ask.
Boutique consulting firms should inverse the order. Before setting goals on how many sales you want to make, focus on making the right sales.
Here's an excellent analogy by Michael Boricki:
The simplest way to explain this is to imagine what would happen to your body if you ate cheeseburgers for 12 months. You would probably not like the outcome. Your body, life, routines, and more will need to adjust to accommodate your new diet.
In the same way, your consulting practice will contort itself to deliver the types of projects you are selling and delivering.
If you mostly sell short and low-priced projects, you will have to constantly find and win new clients every couple of weeks just to keep your lights on.
Yesterday, I've met a D&I consultant that was exactly in this situation. His main offering consisted of a quick, 2-week training. He had to find new clients all the time since the same company rarely hired more than one training.
He's stressed (as I would be), but it's inevitable. The type of work he is selling ended up shaping the whole business: his positioning, staff, assets, cost structure. And making this business grow profitably is very difficult to do.
For him, it doesn't really matter how many projects he states as a goal for next year. He is making the wrong kind of sales.
If you want to grow your consulting practice, you need to focus on selling the types of projects that will allow for that growth. Long-term growth requires stability - with a stable cash flow, you can make a big investment for the future. Without it, you can't.
The next time you sit down to set sales goals, remember to first review your offering mix. Selling many of the wrong projects will take you nowhere.