I have been a consultant for a few years and this is tougher than I imagined. After thinking about my years as an executive, I am coming to the conclusion that selling hours is a hard road to financial success. Is there a secret I am missing?
Producing any commodity that has both limited supply and that is arguably substitutable is a hard way to make money. You only have so many hours available to advise clients and there are any number of other consultants who provide similar services, even if you assert that no one is like you. As I suspect was true with your former company, the prospect of financial success comes from higher prices for unique (i.e., highly valued) services that you sell each hour, or through a scalable and/or extensible set of consulting offerings.
Scalable means that you break the hourly barrier by producing multiple units for a fixed input of resources (hours in your case), maybe by creating a book, webinar, seminars, intellectual property or other product you can create once and sell repeatedly. Extensible means taking into consideration a path for future development, growth, evolution and expansion. Although extensibility is most commonly used in terms of software engineering, it can apply to consulting where you design your services to accommodate adding complementary services and products (e.g., training courses that can be augmented with modules to expand the range or comprehensiveness of your practice).Tip:
It is hard to break out of the hours trap but work on your business design with principles like scalability and extensibility in mind, along with other principles that might lead to higher value services, such as frugality, transparency, (future) regulatory conformance, and others that fit with your more output for your limited input.© 2010 Institute of Management Consultants USA