07 Feb Deadly Business Consulting Mistakes
Are You Making These Mistakes?
Over the years we have watched many consultants come and go and some who just keep a stagnant income and never break the ceiling with their incomes. Being transparent, we also made some mistakes along our consulting journeys. As mentors to business consultants and the co-founders of Business Consultant Institute, we stand for helping other consultants have success in their businesses. The kind of seven figure business success we are experiencing.
This article contains the 5 top mistakes consultants make and then solutions for each. Read this and breathe it in so you don’t make these deadly mistakes and either go out of business or just never get ahead in your consulting business.
Mistake 1: Stop Marketing Because They Landed a Contract
You must always be marketing. If you stop marketing when you get a contract then you have no pipeline if/when the contract ends. We all know that sometimes contracts end way before we expect them to. We have seen too many consultants who rely on one contract or one client and then the client terminates and the consultant has no other prospects to offer their services to. That creates an income gap until you start up your marketing engine and bring in another client and this is a slow process. No matter how busy you are or full you think you are you are in the business of marketing your consulting services – always.
Mistake 2: Work With Clients Without Formal Contracts
You absolutely need to have formally signed contracts that are very clear and spell out all responsibilities and payment terms. We constantly see consultants who have oral agreements or poorly written agreements and they end up getting burned by clients. No matter how much you believe that the client will keep their word only a legal contract enforces this. We recommend you engage a business attorney for drawing up legal agreements. Don’t skimp on paying a good attorney to create these agreements for you because you can end up paying dearly on the back end.
Mistake 3: Scope Creep
Scope creep is where a client begins adding in additional service requests. Some of these requests might be small so at first, you might be inclined just to say yes to them. Pretty soon the client has added more and more to your project time and you aren’t adhering to the written contract and you end up spending a lot more time on the client engagement without being reimbursed for these extra services. Always be adhere to what the contract says as the scope of the agreement. This way if a client requests additional time or additional services that aren’t part of the written contract you can guide the client conversation back to the agreement. It is very important that you have the skills of managing client behavior and avoid scope creep because this can be very costly when you are exchanging time for money and/or providing deliverables without being compensated.
Mistake 4: One Income Stream
This is on of the most critical mistakes that has consultants stagnant in their incomes and stuck with a consulting model that is based on always trading time for money. When you only do consulting and do not expand to multiple streams of income you only have one source. If that source dries up, your business is over. Also, if you only do consulting you have no passive income flowing in and only make money in exchange for time. This is the reason we advise our mastermind and private clients to always have many streams of income. The highest paid consultants we know, do what we have done and our doing in our successful consulting businesses … speaking, training, writing, coaching, etc. We have financial security plus enjoy passive income so that money flows in even when we aren’t with a client doing a consulting project. We highly recommend you create multiple streams of income that supplement your consulting business.
Mistake 5: Low Consulting Fees
We are always interested to hear the various rates our clients come to us charging as their consulting fees. If you are like them we bet you have priced your fees without really considering the extrinsic and intrinsic value you create. What is the result you are delivering for your clients? How much value does that result really have for them? Are you solving their biggest challenge and helping them achieve their goals? If you can answer these questions and are super clear on the result you deliver then you will have a successful consulting business. You must know how to speak to clients about the value they receive instead of the time on a project must be able to steer the conversation away from trading time for money to creating a valuable result worth them investing in. We constantly have our clients raise their fees because they aren’t in line with the value their solutions offer and they didn’t know how to present that value in a compelling way to their prospective clients to command premium pricing.
As two top consultants who now devote time to helping others become elite consultants and high earning consultants we love business consulting and know this is a very rewarding career. However, if you don’t avoid these mistakes and truly have a way to navigate through each challenge, then you will discover, like other consultants have, you can burn yourself out trading time for money, you can create a false ceiling in your business, and you will never have a scalable business and you are creating a job vs. owning a successful business.
Study this article and decide to get a mentor or into a mentoring or mastermind to learn how to avoid all of these mistakes.When you do you will not only serve your clients better, you will be in business consulting a long time without burning yourself out and you will make the living you desire and deserve.
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