Yesterday I challenged you to identify the bottleneck or limiting factor in growing your consulting business. Some readers shared their answers, which I added to the list I update after each new client engagement.
This list is divided into three categories, based on my CCS methodology:
- Creating demand.
- Capturing demand.
- Serving and satisfying demand.
You can find below some of the most common issues that block the growth of consulting firms.
This isn't by any means a "complete" list - we can (and should) get more granular and look at sub-components and root causes when solving any of these. Still, it’s proven helpful for me as a starting point for identifying growth issues in many consulting businesses.
This is how you drive awareness, generate interest in your offerings, and get people to believe you could improve or transform their business. Common limits:
- Lack of a high-level marketing strategy (can't prioritize and guide initiatives).
- Broad and generic positioning for the firm (selling everything to everyone).
- Lack of documented targeting criteria (making it impossible for partners to objectively name their dream clients and narrow the positioning).
- Unfocused visibility-building strategy and lead generation mix (trying to run too many initiatives at the same time, making them shallow and short-lived).
- Inconsistent implementation or underinvesting in business development (leading to an insufficient number of new relationships and opportunities).
- Poor digital presence (lack of, outdated, or inactive marketing platforms for visibility and trust-building).
- Lack of proactive demand generation (firm only captures existing demand, and can't generate interest and urgency for their offerings).
- Selling to a broke market (rare, but there might be no money for consulting in the chosen niche or market vertical)
This is how you qualify prospects, address concerns, and win new businesses, transforming interest into revenue. Common limits:
- Weak offerings and lack of a solid service design process (trying to sell people what you have, not what they want).
- Lack of business development training (partners don't have the mindset, skillset, or toolset to lead the development process).
- Low accountability (lack of clear target KPIs, transparency and communication among partners, or process to align business development efforts).
- Poor pricing models, strategy, and behaviors (pricing based on time or materials, presenting only one proposed solution, self-negotiating, etc.).
- Narrow and steep offering mix (lack of productized services or lower-priced engagements for new clients, lack of premium offerings to upsell and retain current clients).
- Lack of strategy to grow existing client relationships (current clients don't know how else you can help, no relationships or visibility among other teams or business units).
- Lack of or poor use of business systems and tools to support sales (CRM, task management, analytics, time management, administration).
Serving & Satisfying Demand
This is how you successfully deliver projects and engagements, and generate more demand in the process. Common limits:
- Lack of a commonly agreed success indicator for engagements (allowing you to measure progress and impact, and increasing perceived value for clients).
- No documented methodology to deliver engagements (hurting your ability to consistently overdeliver on your promises, and reducing your margin and capacity).
- Lack of documented values or operating principles (reflect how you and your team act when you need to make tough choices and decisions).
- Shortage of skilled people (internal staff, trusted contractors, or collaborators needed to perform client work).
- Internal team dynamics (poor leadership, hiring practices, and culture).
- Outdated technology (overreliance on manual work, recurring issues with data storage and security, clear opportunities to automate tasks).
- Poorly documented processes (no standard operating procedures for tasks that are either recurring or delegated/outsourced).
- Lack of retention and network nurturing (strategy and implementation).
As the saying goes, "All models are wrong, but some are useful."
More than 95% of the growth bottlenecks I found in boutique consulting firms are included in this list. It's not complete, but a good tool to understand the big picture before diving into strategic and tactical work.
Take 15 minutes and ask yourself:
- What's the current limiting factor for your consulting business?
- How can I solve this limit? Is it enough for me to temporarily direct more resources to it, or do I need to create systems to ensure this issue doesn't happen again?