Can a professional services firm / consulting firm be fastlaned?

[exige]

Lately I've been thinking more and more about just starting my own firm. But can a consulting firm be "fastlaned"?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[AmyQ]

It depends on the type of professional services firm you hope to open. Accounting/law firms rarely sell for much.

Seth Godin addressed people opening up consulting firms in a podcast. He said that people will work for a big firm like McKinsey and think that if McKinsey can charge $800 an hour for their consulting services, they can set up their own shop and sell their services for $400 an hour. The problem is they don't realize what executives are actually buying and their one man shop doesn't sell the product.

CEO's and VP's aren't usually paying for the expertise of the consultant. They are buying an insurance policy to use with their board. If the plan goes wrong, the executive can say that they followed the advice of the most prestigious consulting firm in the world.

 

[exige]

This would be IT/software as opposed to management consulting. It would be easy for me to set up shop, but the challenge always seems to be how to scale / work on as opposed to in the business.

 

[exige]

To add some more meat to this.

Basically in technology consulting there's 3 main models:

- Staffing - brokering gigs for independent contractors, or hiring FTE's on W-2 and placing them to fill positions
- Solution/project based consulting - custom software development, design/architecture and implementation of solutions
- VAR - value-added reseller, selling some off the shelf solution as well as services for implementation, customization, systems integration

Additionally lately I've seen a lot of firms trying to get into "managed services".

All of these trade time for money and are slowlane, at least if you're an FTE resource. If you're the guy at the top though, you're trading _other_ people's time for money...

Every firm I've been involved with has struggled with how to scale, expand, decouple from boom/bust cycles, etc.

At the moment I'm stuck in #1. I was given a deal with a sales/biz dev type comp plan, but then stuck long term as a staff aug resource. Which means none of the biz dev opps are coming my way and thus I have no ability to actually realize any of it. In reality I think they're just blowing smoke my way to appease me and keep me billing ;-)

So I've become incredibly frustrated. I could go independent, spin up my own firm, and at least short term be putting a lot more $ in my pocket doing exactly the same thing I'm doing today, because I won't be stuck with a low base salary and no commissions/bonuses.

The problem is to transition it from "slowlane" to "fastlane" is looking like a long long road when undercapitalized.

Don't get me wrong, its ok money, but every day I feel like I am wasting time and I hate being taken advantage of.

The way to do it to me seems to be to use the consulting arm to cash-flow finance products, and leverage the products to add credibility and feed back into the consulting arm. It seems most firms also go after the "branded methodology".

Then I started thinking I wonder if anyone has franchised out an IT consulting firm.

I have a totally different fastlane idea around self-publishing and growing a brand, but in the meantime I'm still struggling with what to do with the above and if its even worth the energy.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.