If you’re an independent consultant or freelancer, chances are you’re always in growth mode. You want to know how to grow a consulting business the right way, so you can earn more money without adding more stress and hassle.
When it comes to ideas for how to grow a consulting business, there are really only four different strategies that work. In this article, we’ll go over these four strategies, and take a look at the pros and cons of each. Here they are, in no particular order:
Strategy #1: Find More Clients
The most common strategy that entrepreneurs take when trying to figure out how to grow a consulting business is finding more clients. This is a two-part strategy: first, you need to engage in sales and marketing to find the clients, and second, you need to service the clients and complete the projects they are paying you to complete for them.
Pros: More clients mean more money for your business. If you produce great work for these new clients and build strong relationships with them, chances are they will continue to use your services and refer you to their colleagues and friends.
Cons: More clients mean more work hours, and you only have a limited number of hours in your day. As you grow your client base, you’ll run the risk of burning out from trying to work too many projects at the same time. Possible solutions include hiring a staff or outsourcing to other contractors (both of which come with their own headaches) or turning away work once your workdays are full.
Strategy #2: Sell More Services Per Client
Another strategy you can take when looking at how to grow a consulting business is keeping the same number of clients but selling more services per client. These can be completely new services, such as when a web designer adds SEO services for his or her clients… or they can be “add on” services, such as when a web designer adds a monthly recurring payment for clients in order to fix any minor glitches that come up over the course of the year.
Pros: This strategy will help you increase the lifetime value of each client, and it is easier to sell more services to the same client than it is to find a brand-new client.
Cons: Just as with adding new clients, adding new services can mean more work hours, and may lead to burn out or the need to outsource or hire staff. There may also be a limit to the number of additional services you can provide in your niche.
Strategy #3: Charge More Per Project
When it comes to the best ideas for how to grow a consulting business, this simple but effective strategy is often overlooked. If you can charge more money per project / client, then your revenue will grow without the need to work any additional hours. In my experience, most solo consultants and freelancers are undercharging for their work. If you’re doing great work, consider raising your rates as a way to grow your income.
Pros: Charging more per project allows you to make more money without working more hours.
Cons: Raising your rates may make some potential clients less likely to hire you. Likewise, as your rates go up, you’ll need to make sure that your work product is of high enough quality to justify your higher rates.
Strategy #4: Create Passive Income Products
The most overlooked strategy for how to grow a consulting business is creating passive income products you can sell alongside your consulting services. By selling e-books, webinars, and online classes teaching people how to get the same results you are getting for your clients, you will be able to put in the work once (creating the product) and sell it over and over again.
Pros: Creating passive income products will allow you to leverage your time by creating something once and selling it over and over again. E-books, webinars, and online classes will also help you gain more authority as a consultant and even help you raise your consulting rates.
Cons: Creating passive income products takes time and effort.
How to Grow a Consulting Business the Right Way
If you want to know how to grow a consulting business the right way, in my experience the answer is a combination of all four of the above strategies.
You need to put some time and effort into finding new clients on a regular basis. You need to think through other services you can offer to your current clients, so that you can increase your revenue per client. You almost certainly should raise your consulting rates… nearly every independent consulting is undercharging for his or her services. And every single consulting – including you – should be developing passive income products to bring in revenue month after month and year after year.