How to earn a £100,000 income from consulting

If you’d like a six-figure income without the fixed costs of employing people or leasing property, one business that can deliver it is consulting – using your intellect and experience to provide a solution to someone’s business problem.

I’m not talking about the ‘professional consulting’ you buy from Bain or Accenture; slick-suited attaché-snappers with MBAs are only one slice of the business of providing advice. Consulting to me is anything where you can say: this is the business problem; this is a desired outcome; I offer you a way of getting from problem to outcome. And there are thousands of varieties of it.

If your skills are already there, it’s perfectly possible to make £100,000 a year by following a few simple rules and putting in the numbers. Here’s one way to do it.

Your first job is to decide what you’re selling. Is it marketing consultancy? Management consultancy? Accountancy? Copywriting? Can you draw pictures? Write catchy tunes? To start out you’ve got to have at least one recognised skill that you’ve been using professionally to deliver value at work for five years minimum.

If you don’t have one, get a job in the industry that interests you, then read this article again in five years.

Next, decide who you want to sell to. Open Excel and map out 12 profiles of companies that are in the market for your services, preferably the type of companies you’ve worked with over the last five years. Label these profiles Jan, Feb, Mar and so on in columns, then plot the criteria across the cells below.

A profile can be any clearly-defined set of criteria which would describe 100 or more companies in your catchment area. Perhaps advertising agencies of 10 or more people in London. Or medical clinics with 2 or more orthodontists. Or mortgage brokers with turnover above £500K. If you can’t decide who’s in the market for your services, you’re probably not ready to be in business yet.

You’ve now got a clear idea of a) what you’re selling, and b) who you’re selling it to. Now onto the pointy bit: what you do to get customers. Here’s the downer: to make this work, you’ve got to do it every day, without fail, no matter how early or late it is.

Each day, set yourself a your task of finding five companies in your market – five companies open to your pitch that’d benefit from your services but aren’t doing so at present. Plan to approach the first of your 12 profiles in January, and so on. This will take about one hour a day, every weekday, forever. Some sort of CRM tool to keep track of who you’re contacting is very useful – I use Salesforce.com.

(Five… and ONLY five, please. It’s a figure low enough that you’ll still treat each new contact as a valuable human being, not a piece of data. And treating them as individuals will show through in whatever you write or say to them.)

Next, write a letter to each of their five Managing Directors. It can be a form letter, but you must PERSONALISE each letter. And not just with the director’s name. Make sure one paragraph and the PS is about his company alone. Mention his turnover, or a new product, or a recent quote he provided to a journalist. You’re not broadcasting to 25 companies a week; you are addressing each Managing Director individually.

The letter must be absolutely honest about your abilities, clear about what you could bring to his company, and take up a single page of A4. Include a call to action – ‘Can I visit you on Monday?’ is the right sort of thing.

The target is to get one Managing Director of those five to agree to a phone conversation and one in five of those to agree to a visit. That’s one visit a week.

Between one and two weeks after sending each letter, phone the MD. Not to sell, just to ask if they got it and remembered it. (Most won’t; expect to send copies.) Only two in five will be available, ever; expect to make 6-12 calls to reach each. When I talk to them, I don’t ‘sell’; I ask what they thought of the letter – whether they think I talked about them in an appealing way. Let them talk, giving you insight. Then – if they seem a strong prospect for your services – ask if you can visit.

When you make the first visit, you’re not selling either. You’re presenting a business option to the Managing Director that might be worth his while. The way you do this is to take along an example of something you’ve done for another company.

“Company X is about the same size as you. We discovered 1 in 100 visits to their website resulted in a sales call. So I proposed to add one web page on a useful subject to their site each week, with the goal of raising pageviews fourfold within one year. Their conversion rate was 25% and average sale £900, so that activity added 1000 visits each month, resulting in 10 fresh leads a month and 300 additional sales a year…. that’s £270,000 added to turnover. That represented an ROI of approximately 300%.”

Your goal for this meeting is to open the director’s eyes to 2-3 activities or programmes of work you could deliver. Ask if it’d be okay if you costed up a couple of these activities to see what sort of ROI they could deliver; you’re doing this because you’re interested in his business. Once he agrees, leave with thanks. He won’t call back, but he’s demonstrated he’s open to ideas.

Two weeks later, make a follow up call plus a costed example or two of the sort above, custom-created for that company. (You’re recording all this activity in your CRM tool, so you can track how well your drive towards £100K is going.) If you’re on track, one in four of the companies you’ve visited will agree to take you on. It will take several more visits and 5-10 days of unpaid work from you; there will be three months between that first letter and a new client.

When someone agrees to become your client, start thinking about what you’ll charge them. And not before.

Your fees should always be based on what they’ll get out of you, not what you’d like to charge. It’s not your client’s job to decide what’s profitable for you. Start with the value you feel able to bring to the client, and work backwards. If handling a mailing programme for a kitchenware retailer will deliver 100 sales a month of £250, your fees and costs should be below £5K a month. Is that worth your while?

Here’s one way to decide: use ‘Chunk Theory‘ – what unit of output represents the minimum volume of work you’d get out of bed for? In this case, your chunk may be £1250 – the amount you’re charging for mailing and managing 1000 or so kitchenwares buyers each week. Once you’ve decided on your chunk size, stick to it across all clients; decide what job of work you can do for them for precisely one chunk and use this as a constant in your projections.

If your chunk size is £1250, you need to complete 80 chunks a year across your client base to hit your sales target; maybe four clients worth 20 chunks a year each? You’ll soon see if it’s reasonable or not.

Keep at it. In six months you’ll have made 600 contacts and visited 24 companies. You’ll have three clients on your books and three more realistically coming online in the next three months. You’ll also be attuned to thinking in terms of your client’s ROI, not profit in your pocket; your profit is a consequence, not a goal.

So make your best effort to track the ROI for your client and report it monthly and honestly. If it’ll take a year of segmenting and splitting to get to that 300% ROI, make that clear; after all, you want long-term client relationships, not quick wins. Act as if you’re on their team and demonstrate your concern for THEIR business, not your own.

Lastly, remember that each client has a natural lifespan; for me it’s around two years, after which they’re capable of doing whatever I’ve done for them inhouse or they can no longer justify a budget for something that’s working smoothly. I say goodbye, and stay on good terms with all of them. This isn’t a bad thing; it keeps your business lively.

So keep mailing 5 new prospects a day, count your chunks, and make sure you’re completing enough chunks a week to stay on schedule. And six months from today, your annual revenues will top £100,000.

When it’ll be time to start thinking about £200,000.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s