Black Girls Consult TOO!
The Black Girls Consult Too! podcast provides a business resource for women in consulting, especially women of color, to successfully navigate a hyper-masculine, highly competitive industry. It demystifies how to start and grow a thriving consulting business by simplifying the process and helping to avoid common pitfalls that can derail even the best ideas. Each episode is crafted to dive deep into consulting practice, business strategy, mindset, and more. For more information, visit www.excelatconsulting.com/podcast.
Black Girls Consult TOO!
Episode 115: Pivoting to Profit: Reframing Success in Your Consulting Business
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Have you ever wondered why your booming consulting business isn't reflecting the same success on your bank statement? This episode is your wake-up call to pivot from mere revenue-focused pursuits to true profitability. We will dissect an essential shift that many overlook - the difference between money coming in and the wealth you retain.
In this episode, we dive into:
- The crucial elements that drive your consulting business beyond just revenue generation;
- Insights into understanding the key levers of your business model;
- And the importance of having a holistic view to achieve profitability.
By comprehending the complexities of building a profitable consulting business, you'll learn how to prioritize and focus on what truly matters daily, especially when resources are limited. We'll explore strategies to adjust for these factors, helping you maximize profitability, leverage opportunities, and scale your business for sustainable growth. Prepare to tackle the cycle of 'perpetual need' head-on and redefine success through a profitability lens.
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They say, the odds are stacked against us as women, especially women of color, trying to thrive in the consulting world. But rather than wait for a seat at the table that may never come, what if we build our own tables? What if we channeled our talents into guiding each other towards the success we deserve? Welcome to the Black Girls Consulting Podcast. I'm your host, dr Angelina Davis, and I've walked the path from healthcare consultant to a mentor for women like you, ambitious, unstoppable and ready to make waves in the consulting world. This podcast is your go-to spot for all things entrepreneurial consulting. For us as women, especially women of color, think of it as your weekly coffee date with a friend who's here to dish out real talk on building a solid business, elevating your thought leadership and mastering that all important mindset. And let's not forget we're doing all of this while balancing day jobs, family life and running teams. Yes, we can do it all. So if you're ready to dive into how you can grow a thriving consultancy or get strategies and insights that actually fit your busy lifestyle, then you're in the right place. Grab your coffee, tea or, hey, even a glass of wine, I won't judge and let's get started.
Speaker 1:Hello, hello, hello. Welcome to the Black Girls Consulting Podcast. I'm your host, dr Angelina Davis, and today we are going to be talking about money. Look, I have been waiting to have this conversation because this topic has been coming up a lot recently in a lot of different settings and situations, and I think that money is something that we all are very aware of. Right, we're running businesses and we're building businesses, so money has to be a central focus, and often, when we see the possibility of being able to land more clients or a really lucrative contract, our eyes light up, because that means that more money is going to come into the door. I get it, I understand, but one of the things I've been noticing recently is that a lot of us, as consultants, are losing sight of the difference between generating revenue and creating and generating profit. Those are two vastly different things, and so if we are solely focused on the revenue that we're bringing in, there are a lot of things that we can actually miss in terms of making sure that we're a profitable business, and when this happens, it creates a cycle where we just need more and more and more and more. It's as if the minute we land the client that we have been wishing for and hoping for for the longest, and we get them under our umbrella and we're working with them. Then, all of a sudden, it's not enough. It's not enough because then we realize that there are a lot of other things that need to be covered and paid, and so the revenue meaning that big number that we were chasing didn't really pan out to be what we thought it would be, and so this is why I want us to talk about this today, because there is a vast difference between revenue and profit, and once we are able to shift the way that we think about these things and focus more on profit and profitability of our business, I think we are going to be in a better situation when it comes to achieving longevity and sustaining our business over the long term. And because that needs to be our focus as women in consulting, this is extremely important. So our conversation today is all about how we can shift into profitability over revenue.
Speaker 1:I was actually watching on the news very recently about some of the recent changes that have been happening with Red Lobster, so I don't know if any of you all like Red Lobster. I know some people don't like seafood, but I love seafood. Let me tell you, I love seafood so much. And one of the interesting takes on this whole Red Lobster story and just to catch you up, red Lobster is closing a number of their stores and their restaurants because they are in jeopardy of going into bankruptcy. So they shut down a number of their locations. It was very abrupt and they stated they were closing temporarily. And all of this is based upon their financial standing and their ability to be a profitable business currently in this current market.
Speaker 1:Now, this one take I was listening to was breaking it all down and trying to figure out exactly what had caused most of the financial issues that Red Lobster was facing in more recent years. And one of the things that they cited I know if you all eat there at all, you're going to be very familiar with this offer. But one of the things that they cited is their all you can eat shrimp offer. And I know I have done this before because, like I said, I love seafood and you go in there and they have the special where you can get the all you can eat shrimp and people just sit in there and eat and eat and eat. Well, what they realize is that that one promotion actually cost the business like millions of dollars, and so they are blaming this promotion for somewhat of the beginning of this downfall.
Speaker 1:Right, I thought it was really interesting because, when you're thinking about the promotion and the purpose of having the promotion, it was to get more people in the door and often when they would run this particular offer, it was at seasons where they may have seen a lull in the business and they were trying to get more people to start eating in the restaurant again. And it did work evidently worked too well, but people were literally eating them out of business. And one of the reasons this is problematic or became problematic for them, is because they were focused solely on more customers Like we often focus on more clients and they were thinking about the revenue that they can bring in the door, how much money these people are going to pay when they come and eat in the restaurant, but they were not focused on the profits that would be made and how profitable this promotion would be. And there is a vast difference because, like I said, what happened in this instance is that, yes, they got a lot of people in the door, they were able to sell this particular promotion, they were able to get people to come, so much so that they ended up spending more money than they made, and that often is, unfortunately, a problem that many of us in consulting run into, especially when it comes to corporate contracts. So I want to use this whole story of Red Lobster although it seems like it doesn't relate to what we're talking about, it really really does I want to use their story and tie it into how we often approach landing business in the consulting world.
Speaker 1:A thriving consulting business is built on a solid business foundation and a consulting code that leads you toward your ideal business and your ideal lifestyle, and the great thing about this code is that it works for any type of consulting practice, whether you help clients with professional development, business management, grant writing, IT or something entirely different. This consulting code is not rocket science and is not beyond your reach, and when you crack the code, it can jumpstart the growth of your solo consulting practice and is what you need to know to get started and land your first clients, and nothing more. This is a step-by-step process I wish I had so many years ago, and that's why I wanted to share this with you and how you can do this too. So if you're interested in starting your consulting business and creating a desirable offer to generate leads for your offer and to make sales, then the consulting code is your solution. Visit wwwexcelatconsultingcom for more information. For more information Now I see a lot of ads that go up and advertise how you can land the next big, you know six-figure contract five, six-figure contract and how you can bring all this money in the door with one corporate client, and it sounds amazing and definitely you can do that.
Speaker 1:Let me just let me make that clear before we keep going. You can definitely do that. That is a possibility. So I'm not knocking the fact that this is part of advertising because, let's be real, it's enticing, it's great to hear, it's exciting, it is true, and also, you know, it's something that can be a reality for many of us, if not all of us, who are out here building consulting businesses as women in the field. But one of the things that I like to point out is that, although you can land these contracts, there is a lot on the other side that most people don't mention and don't teach.
Speaker 1:And this is why I want to have this conversation today, because we have to also think not just about the amount of money or revenue that can be generated from a particular client contract, but we also need to think about what it's going to take in order to deliver the outcome, and I've talked about this in episodes in the past, but I wanna dive a little bit deeper into some of the things that we wanna consider when it comes to making sure that the offer that we are going to make and also deliver is truly profitable, and not just one that generates a lot of revenue that then gets eaten up by a lot of expenses, because, remember, profitability is a measure that determines the success or the failure of a company. Now, that is different from profit, which is actually speaking to the exact amount of income or revenue that you've generated, above and beyond the cost of expenses that you have incurred from delivering the service or the offer. But when we think about profitability, we're thinking about the long-term success and, yes, profitability is driven from profits, meaning that we need to make sure that we have money coming in, above and beyond the expenses that we have to pay out, so that we can create a business that is sustainable for the long term, meaning we need money, not just money in terms of what you're going to get from the client, but what you're going to have in the bank once all the bills are paid. That's what we're focused on. So here's how I explain this to my one-on-one clients.
Speaker 1:When you're thinking about building a profitable consulting business, there are a lot of different levers that you can pull when it comes to generating this level of profitability that you desire. So, actually, there are eight total levers that I like to teach. Those include productivity, efficiency, client retention, client attraction, perceived value, client satisfaction, soft skills and expertise. Now, listen, you don't have to remember all of those, because I know that's a lot to remember. What I want you to do instead is focus on a concept that I like to call the umbrellas of profitability, and when you think of it this way, it's going to group some of the levers that you can pull under four different umbrellas that compose all of the different tactics or strategies that you can use to increase profitability in your business.
Speaker 1:So the first umbrella that I wanna talk about is client attraction and retention. Now, when we're thinking about client attraction and retention, this is all about that aspect of getting money in the door. So, when you're thinking about that initial contract, when you see, hey, you can land a $50,000 corporate contract, or you can get consumer clients to sign up for $5,000, $10,000 for six months, three months, whatever it may be. When you hear those numbers, that's the revenue that is going to be generated and that is important because that's generated through being able to attract clients. But then also there's another component to this that, in addition to attracting clients, we have to be able to retain them. So when it comes to just bringing the money in the door this is the first umbrella client attraction and client retention play a huge role. That is because that is your way of actually generating the money that's coming in, generating the revenue overall.
Speaker 1:So in order for us to have successful businesses, we do have to focus on client attraction and client retention, meaning that if you're constantly focused on just attracting more clients, just new clients coming in all of the time, and you have no focus on being able to retain them, you are limiting your profitability, because it's much more difficult to keep landing new clients than it is retaining some of the clients that you have been able to serve in the past. So you have to have the combination of both. This is one of the first things that we want to focus on in just securing the revenue, securing the amount of money that's coming in the door. So that's umbrella one. Now, when we move past that, well, I want you to think about umbrella two.
Speaker 1:This is your hard and soft skills. Listen, consulting is a practice, meaning that consulting is something that we have to continue to work on. We need to stay relevant with current literature. We need to be on top of a lot of the evidence-based practices. We need to know what's happening in our industry. We need to follow what's happening in our industry. We need to follow the trends that are occurring in order to be able to serve our clients to the best of our ability.
Speaker 1:That all falls under hard and soft skills and this, I will tell you, is one of the areas that is often overlooked, especially when it comes to establishing a more profitable business, because it doesn't seem like it directly ties to money, but it does. I want to remind you that consulting is the business of expertise, meaning that you need to have the knowledge, the experience, the training in order to serve the clients that you want to serve, in order to attract them, in order to retain them, meaning that this has to be a focus area of you dedicating time and resources to in order to retain them, meaning that this has to be a focus area of you dedicating time and resources to in order for you to achieve the level of profits and profitability and even revenue generation that you want to achieve. You can't keep attracting new clients or retaining clients if you are not growing yourself. If you don't have more to offer over time, then your clients are going to outgrow you and your services. So you have to continue to evolve and as you evolve, you are able to bring your clients with you. That's part of this whole retention picture. So it means gaining more proficiency in your area that you're hired to do.
Speaker 1:And then the soft skills part listen, that's just why people hire you in the first place. We have to be able to communicate, we have to be able to manage our time, we have to be able to lead others, we need to be able to problem solve, we need to have empathy. All of that is just part of the intangible skills that we have that are vital for our success. They truly, truly are. And when we focus on improving these things our hard skills, meaning our expertise, our actual skills and knowledge base and the soft skills, in terms of the way we're able to communicate. Being able to communicate better so that we can, for instance, sell from stage or be able to land clients more efficiently and effectively, because we know exactly how to communicate with them about the problems that they have, overcoming objections, things of that nature. All of that goes hand in hand with us being able to attract more clients and being able to retain more of the clients that we have. So this also is a lever that we can pull in terms of being able to increase profits and profitability in our business that many of us overlook.
Speaker 1:So if you haven't thought about how you are going to build your expertise, how you're going to grow yourself as a consultant, how you are going to evolve your practice, then you are shooting yourself in the foot. I need you to prioritize this right now, and the reason why I stress this is because I get it. I get it. It is so hard to try and run a business, to market and sell, to serve clients, and to try and think about going to whether it's conferences or reading or taking courses to keep up to speed with what you are doing in your space. That's a lot. It's a lot, and that's one of the reasons why I advocate so strongly for keeping a simple and lean business model, because when we don't do that, then we put ourselves in a position where, in the long term, you limit the amount of money you're able to generate and profits that you're able to generate you will. It will happen because you will find out that larger clients tend to require a lot more work and, as you are thinking about the way that you're able to deliver meaning that you need to elevate your client experience you want to be able to serve them at a level that is commiserate with the amount of money that they're paying you. So when you think about those things, it takes time Creating systems and structures that are manageable, that you can easily implement, that allow you to maintain the work-life harmony that you started your business for. That's important, so I won't harp on that any longer, but I just want this to be a consideration when you're thinking about generating profits in your business that listen hard and soft skills. Being able to maintain that is a key part of building and establishing that profitability.
Speaker 1:Now the third umbrella, and there are four umbrellas, so we're almost to that last one. But the third umbrella is client satisfaction and perceived value. Now, I know it seems like common sense that your clients need to be satisfied with the work that you're doing and that their perception of the value that they're receiving matters. It seems like common sense, but you'd be surprised how often this is overlooked. What I've found is that many people leave this up to chance, and one of the things that I've found to be extremely helpful in my business, especially when I'm working with clients on a one-on-one basis, and even with my courses, I embed a lot of feedback opportunities.
Speaker 1:I'm constantly thinking about where the client is in their journey, whether or not they are achieving their goal and making progress and if they are satisfied, because if you are assessing that along the way, then you can fix it. And it's only when we don't think about these things and we get to the end of the road and then we look for feedback or assessing client satisfaction or their perceived value, that we may find out that we missed the mark. Then you have to fix it, and that's always harder than you assessing that as you go along. But in order for you to do this in the most effective way, you have to do it purposefully. It can be the difference in you creating raving super fans that spread the news of your consulting practice like wildfire and it leading to more and more referrals and more clients coming your way. Or and this is the worst case scenario what we definitely don't want to happen it can lead to a devastating review.
Speaker 1:Listen, a few years ago, I worked with a particular service provider and, I will be honest, the work that I did with this individual was great. I had no problems whatsoever with their timeliness or the services that they provided. It was great. No complaints whatsoever. Still think it was an awesome, awesome offer.
Speaker 1:Now, not long after I work with her, however, another disgruntled client ended up making a post on social media about the poor service that they received, and that triggered a number of other individuals to then come out with their story. Next thing, you know, there was a whole like fest of negativity that was flowing online about this person's services, and I was shocked. I was shocked because clearly, that wasn't my experience, but a lot of people evidently were not satisfied with what they had received, and this is something that ended up. I'm assuming because I haven't seen this service provider in a very, very long time, but I'm assuming that it more than likely destroyed their business, but I'm assuming that it more than likely destroyed their business. That's crazy, because I know that the product that this individual sold was a good one.
Speaker 1:At least from my perspective of many of the things that happened that these other individuals claimed and were reporting on, it was vastly different from my experience, and the last thing that any of us need is a devastating and negative review of our work, especially in the consulting space, because, remember, so much of consulting is based on trust, so protecting our trust and integrity is a key component of us being able to build a more profitable business that is able to generate more revenue through attracting more clients, maintaining more and retaining more clients. All those things go hand in hand, and so this whole aspect of being able to ensure that we have client satisfaction and perceived value is important. Now here's the last one, and this one is probably going to make the most sense to you in terms of being able to increase your profits in the business. It's focusing on umbrella four, which is productivity and efficiency. Now, so far, a lot of our conversation has centered around how we can draw in more clients or how we can be able to land more projects, or more expensive or lucrative projects. I should rather say into our consulting business.
Speaker 1:However, we have to think about what we are paying out, and so this is the expenses part. Now, this starts from the point you are making your offer, meaning, are you creating an offer that you can easily deliver on, or are you making a lot of promises within that offer that is going to require a lot of outside help, because remember that these people have to get paid. So the more contractors you bring on, the more partnerships that you make and things of that nature to deliver on this larger request, then it can eat into your profit margin. That's something you have to be mindful of and think about, and what often happens is that we can get caught up in building what we think is this quote unquote perfect offer that will sell, that we don't focus on ways to streamline and optimize that offer, so it is actually indeed more profitable. That means that we can end up, yes, landing the client for our target rate, but then paying out the vast majority of that and other fees in order to deliver the service.
Speaker 1:That is a huge trap that many, many consultants fall into, and it can be a very costly one, and although it, for our ego, sometimes feels good to say I landed this client and this client paid me $90,000, or it was a $120,000 contract, whatever it may be, it feels good. Our ego feels good because we have one client paying us all that money. We don't have to be stressed about where business is coming from Although that's a whole nother conversation for another day because you do still need to be working on marketing because of the sales cycle, but we'll get to that in another episode. But the thing is, you have to create an offer that you can easily deliver that is going to maintain a high profit margin. In order to do that, you have to optimize your offer itself, but then you need to also think about how you can minimize expenses and operational costs around that offer so it doesn't eat into your profit margin.
Speaker 1:I don't know if this ever happens to you. If you're shopping for a gift, this definitely happens to me around Christmas time, whenever I plan ahead of time and I have my list and I know exactly the gifts that I'm going to get everybody and I'm ordering online and I'm starting a couple of months ahead, then I can get great deals. I mean not just Black Friday, but even other sales that may be ongoing. I've thought it out, I have the perfect gift at the perfect price and I can stick with my budget that I set aside. But when it comes to those years where I get too busy to do that or I forget and I wait until the last minute and next thing, you know, I'm running out to the malls trying to just find anything I overspend. Every time. I regret it every time because in that moment I'm just trying to get it done. I have a deadline. I'm trying to reach this deadline so that everybody can have their gifts under the tree.
Speaker 1:And that same thing happens in our business, because if we have a deadline that we need to meet for our clients and things start to fall through, we're trying to get the job done. We are going to not be as focused on how profitable that aspect is right. You are just trying to get someone to complete the job and that can actually eat into your profit margin. So being able to be more efficient in the way that we deliver our services helps. That ranges from creating systems to being able to use automations effectively Some of the things that we outsource and we pay for. We don't need to be doing all that. We don't need to be doing all that. This is just me just getting real for one moment.
Speaker 1:We outsource a lot of activities and tasks that can be, number one, eliminated or automated, and when we don't take the time out to determine whether or not there's a possibility to either eliminate that aspect meaning, are we offering something that the client doesn't value Then that's one piece of the puzzle. But then also, if we're not automating and using technology to our advantage so that we can limit the amount of money that we're spending in terms of being able to get help in providing this service, then we're doing ourselves a disservice in our business. That can lead to overwhelm, burnout and profit loss. It leads to all of the things. So part of being able to increase this profit margin is to create a business that is more lean. That's definitely what I'm going to always push to my clients keeping a lean and simple business model and then also using a lot of the automations to your advantage to be more efficient, and then also eliminating all of this unnecessary add-ons and deliverables that don't offer additional value to your client.
Speaker 1:So I want us to think about increasing the profits in our business more so than we think about generating revenue, because if you really take into consideration all of these different umbrellas and how you can manipulate the amount of money that you're able to end up with once you have paid out your expenses, meaning that your profits once you look at what is creating the profitability in your business, it makes a huge difference in your likelihood of achieving success and having this business for the long term. You're not just focused on one contract. I want us to shift our focus to the future. How are we going to be the business that creates budgets that can be pre-planned, that is predictable revenue, that's stable, so that you can live comfortably without the stress of trying to always find the next dollar? We want to move away from that. I am encouraging us to move away from that and shift into this whole aspect, where we understand all the levers that we can pull and we're not solely focused on just getting new clients and bringing a big contract in the door, but we're truly focused on bringing business in that is going to allow us to maintain high profit margins so that we can become more profitable over time and therefore create the life that we love. That's the ultimate goal. So I hope this episode has been helpful.
Speaker 1:I always get on like a rant sometimes when it comes to these things, because if this question comes up over and over again or I start seeing people make what I would call like mistakes in terms of how they are focusing solely on revenue but forgetting a lot of these other pieces of the puzzle, then I just want to share it. So bad it's like. Sometimes I look at my phone and I just want to say no, no, no, don't do that. So this is my way of us having this conversation and talking about this in just a real and honest way. There are a lot of things that go into you building a very profitable business over the longterm, and it's not just the money that's coming in the door from one contract. I want us to really think more broadly about this whole concept of building a stable business, and when we are able to do that and build a model that is sustainable, stable and lean and profitable, that is going to be our key to success.
Speaker 1:So if you enjoyed this episode, be sure to share it with a friend. This helps the podcast to grow and, don't forget, I would love it if you can leave your five-star review on Apple Podcasts or rating on Spotify. It helps the podcast to grow and reach new people, and I don't do a good job of always asking for the review, but it definitely will help, if you don't mind, and I can't wait to talk to you again in the next episode. All right, guys, take care and don't forget. Focus on the profits. Bye. Thank you for tuning in to the Black Girls Console 2 podcast. If you enjoyed today's episode, be sure to leave your review on Apple Podcasts. Subscribe and share it with a friend. We're on a mission to increase the success and longevity of women in consulting, and you can help us do just that. Also, I'd love to hear from you, so let's connect at Dr Angelina Davis on Instagram or LinkedIn, and don't forget to visit excel at consultingcom for more information to support your consulting journey. Until next time, keep breaking glass ceiling. All right, take care.
