Executive Coaching & Consulting
One of the most difficult challenges for consultants, especially those trying to break into the profession, is how to get started without starving. I launched my first consulting practice in England at age 26. Since then, I’ve jump-started new professional service practices to success several times, and advised others on how to do the same. My favorite way to do this is through channel sales.
Most consultants have suggested that the way to get started is from the bottom up: beat the street (or telephone) with cold-calling, networking, speaking engagements, website building, and publishing. These methods can work, but all share one common drawback: they take too long.
Starting a consulting practice is a full-time job. If you are cold-calling, marketing, or speaking while holding down a full-time job to pay your bills, you’ll quickly find yourself in a never-ending cycle of frustration: no time or energy left at the end of your long day to engage in the activities needed to grow your new business, and not enough new business to quit your day job. But if you quit your day job immediately to prospect new clients, you could starve before landing your first contract. So, what’s the answer? Leverage the sales force of some who is already successfully selling professional services full-time, but needs help filling the demand.
In traditional marketing-speak, a channel is an entity that already has an existing customer base, and a way to reach new prospective customers reliably. Most retail stores, for example, are actually a channel for the manufacturers of the brands of goods that are sold. Best Buy is a retail channel for electronics manufacturers like Sony, Samsung, Microsoft, Dell. Apple products are sold in Best Buy and other retail stores, but Apple also opened it’s own retail store chain. Apple Stores are not a channel by my definition, they are simply a retail sales and distribution mechanism, since Apple has to spend it’s own money and resources to attract customers into Apple Stores. That’s the equivalent of you beating the streets to drum up your own new business. I find it best to avoid this activity while starting up a practice; leverage the sales and marketing efforts of others who already have done that heavy lifting.
In the professional services world, people often trade services as channel partners. When I was running a large mobile software development firm, we used both in-house computer programmers, and outsource vendors around the globe. We were channel partners; we provided the sales, marketing, project management, and designs, while the vendors built the actual code at rates cheaper than we could do it in-house. This leverage gave us greater margins, and gave our subcontracted partners a steady flow of business. You can do the same with your consulting expertise.
How do you find these channel partners? Actually, they are all around you. Many consultants mistakenly view other successful consultants merely as competition- the enemy. In fact, your competitors could be your greatest source of business!
Here are my quick-start tips for channel sales:
You should be networking with people in your industry- at trade shows, industry conferences, local business groups, and online (see my articles, or come to one of my seminars on how to leverage LinkedIN for maximum benefit, especially if you’re not a glad-handing extravert). Find the companies and people in your field that are most successful, and approach them about forming a channel partnership. There is no need to be secretive; if you are successful in your business, they will know who you are soon enough.
The benefit you propose to them is this: you can provide their customers consulting services under their brand as a business-to-business subcontracting partner. Doing so means that they don’t have to pay benefits, payroll taxes, or commit to a long-term employee relationship. In exchange, you can often negotiate a good rate, but one that still allows them to make a decent profit. It’s a win-win, because you are leveraging their sales force and customer relationships, while they are leveraging your expertise and labor. I find that small firms specializing in high-margin customers need such help the most, since their revenues are constrained by the number of quality consultants they can bill out at any one time. But I have used this channel partnership strategy effectively with one-man shops, mid-sized boutique firms, and global Fortune 500 companies.
Some of the biggest companies, in fact, need you the most. Microsoft, for example, offers a great deal of help for small technical consulting firms that wish to deliver expert training or installation help to MS customers. Individuals at these firms take exams and become “Microsoft Certified Partners.” This gives the smaller firm additional credibility in the eyes of customers, and allows them to leverage Microsoft’s enormous customer base and marketing force. Conversely, it gives the Redmond giant a global army of low- or no-cost trained professionals, meaning that business customers can take comfort in the fact that they will always be able to find local support consultants when they need help.
So if you’re psychologically ready to launch your own practice, but are struggling on the sales end of of things, consider turbo-charging your business by finding channel partners who have the opposite problem, and need quality consultants to service their customers. You may quickly find yourself with more business than you can handle.