building a management consulting firm

Copyright 2008 Allen H. Kupetz

Building Your OwnManagement Consulting Firm


It’s never too late to bewho you might have been.

- George Elliot


What is a Consultant?

“A consultant is a person in a position to have some

influence over an individual, a group, or an organization, but who has no direct power

to make changes or implement programs.”


What is Management Consulting?

Process Consulting• General knowledge of business• Strategic (e.g., OB, business strategy)• “The forest” / define the vision

Expert Consulting• Specific skill set• Tactical (e.g., IT, accounting, legal, biz-dev)• “The trees” / solve a problem


What Kind of Consulting is for You?

Process Consulting or Expert Consulting

• What is your brand?

• What are your core skill sets?

• What would make sense for a company to outsource rather than hire?


The indispensable first step togetting the things you want out oflife is this: decide what you want.

- Ben Stein


The Business of Consulting

1. Client Acquisition

2. How Much Do I Charge?

3. The Contract

4. Building a Team

5. Milestones

6. Deliverables

7. Follow-on Business


1. The Challenge of Client Acquisition

I don’t know who you are.I don’t know your company.

I don’t know your company’s product.I don’t know what your company stands for.

I don’t know your company’s customers.I don’t know your company’s reputation.

Now, what was it you wanted to sell me?

McGraw-Hill Publications


Hints for Client Acquisition

• Don’t quit your day job (i.e., use your salary to fund your business)

• Make your boss your first customer

• Focus on an “anchor tenant”

• Snow White and the Seven Dwarfs


2. How Much Do I Charge?

• Calculate your costs HOURLY,

but don’t bill HOURLY

• What would it cost them to do it themselves?

• Exact terms must be in the contract

• T&E is not a profit center

• The “BMW effect”


3. The Contract

• Negotiations• Language• Expenses• Payment Terms• Venue for Resolution


4. The Challenge of Building a Team


Your Client is on Your Team


5. Milestones

• Don’t forget the steps between Start and Finish:

• Are we on the right track?• Can you help us with ... ?• Have your needs changed?• Interim payments?• Expenses?• Format of the deliverable?


6. Deliverables

Not just when you get paid, but a chance to start the process

of winning your next contract.


Don’t give otherswhat they don’t want.

- Japanese proverb


7. Follow-on Business

• Continuing last time or something new? • Don’t work for free • Don’t assume all terms will be the same • New contract


The reverse side alsohas its reverse side.

- Japanese proverb


“Each consulting project, whether it lasts 10 minutes or 10 months, goes through five phases.

The steps in each phase are sequential; if you skip one or assume it has been taken care

of, you are headed for trouble.”


Flawless Consulting: Five Phases

1. Entry and Contracting

“When consultants talk about their disasters, their conclusion is usually that the project was faulty in the initial contracting stage.”



2. Discovery and Dialogue

“Consultants need to come up with their own sense of the problem.”



3. Feedback and Decision to Act

“The consultant is always in the position of reducing a large amount of data to a manageable number of issues.”



4. Engagement and Implementation

“For larger change efforts, the consultant may be deeply involved. Some projects start implementation with an education event.”



5. Extension, Recycle, or Termination

“If the implementation was either a huge success or a failure, termination on this project may be in the offing.”


Of all the strategies,to know when to quitmay be the best.

- Chinese proverb


Questions?


“The Mayans lost to the Aztecs, the Romans lost to the Barbarians, and the French lost to the Vietnamese.

In each case the losers had superior technology, but the victors had more troops.”

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building a management consulting firm

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