So you are a Business Advisor but how do you make money?
I mean really make money?
You know, I am not talking about charging a day rate of £1,000, (I bet £500 is closer to the average), I am talking about making money while you work in your day job; or are asleep!
What I am actually describing is the concept of a ‘silent income stream’. – a variation on the utopic idea of the ‘box in the corner that makes me money while I sleep’. – Sounds great to most people.
But does it exist for real?
You see it is the dream of many successful (and less successful for that matter) Business Advisors, Management Consultants and Independent Sales Reps, -most of whom in reality are faced with the Hunter-Farmer conundrum:
‘When I’m hunting I am not farming, and when I’m farming I don’t have time to hunt.’
Translated: ‘When I am marketing myself and looking for new clients, I am not earning fees, and when I am working on a client project, I don’t have the time to be prospecting for the next one.’
It’s a real problem and is one that creates a natural limit to what an independent business advisor can earn.
For example: Let’s say you are working on a full time client project (5 days a week) at an average day rate of £500. – In theory, you should earn around £10,000 per month; fantastic!
BUT, the reality is starkly different. Most clients will pay based on a fixed monthly budget (rather than your day rate). This is inevitably lower that your day rate and could have the effect of discounting your rate by as much as 70%.
So then the math’s looks like: (500 x 30/100) x 20 = £3,000
Big difference. – Should you take the contract? – Only you can answer that but part of the answer will be driven by what other work you have, or other clients, or other revenue streams generally.
The 2nd conundrum is that if you don’t have any other live client work then you may have to work all month for this client for £3,000 (just to pay the bills if for no other reason).
But if you are spending all your month working (farming), how do you find the time to approach new clients? (hunting).
There are ways to fix the problem.
One way is to be able to offer multiple services to each client. – You do not necessarily have to deliver all these services yourself… in fact you probably can’t. But it is common practice for business advisors to refer business to other consultants, specialists or advisors and to expect a percentage of the associated revenue as a referral fee.
The problem is, you have to remember all of the specialist skills of all of your professional contacts all of the time. – Not practical.
What if you could use technology to help you?
Wouldn’t it be cool if you were able to offer a range of services (and skills) to your clients immediately and to be able to pass that referral on to a high quality service provider at the ‘click of a private button’?
It still wouldn’t answer the ‘Hunter-Farmer conundrum’, but it might increase your average revenue per client which in turn could give you more flexibility to dictate your Farming-Hunting time balance. – Tell the client you can only do 3 or 4 days - … from a position of strength.
So is this possible? – how can technology help?
Well there are a number of ways to use technology and marketing programs to achieve this goal.
As a starting point, have a look at a solution I am passionate about:
I am not selling to you here, I am passionate about solving the Farming-Hunting Conundrum for Business Advisors Consultants and Independent Reps. – So passionate I have done something about it.
In my next ramble I will explain just how out of date, professional networking systems really are today, and how new technology and new thinking is changing this for the better.
In the meantime, please do get in touch if you would like to connect with me.