seeking book recommendations - consulting

Pete · 12th Sep, 2010

Some guys I know have a small engineering consulting business - and they are going fine.

They might benefit from reading some good books on running a small consulting business.

Are there some really good books that you can recommend? Either on consulting or small business generally?

Thank you

Player · 12th Sep, 2010

The E-Myth (revisited) by Michael Gerber is a business classic, however it's applicability to engineering is dubious as it relates more to systemising a business to run without it's owner's labour......viz, setting something up as a franchise. This is difficult IMHO with a task/role/process that involves a high level of qualification. The more training/education/qualification involved, the more the discretion, hence negating the systemisation process. Making a widget or hamburger or loaf of bread for a franchise relies on less educated personnel and less discretion. Engineering is a person selling their time type of affair, however some clues may be gleaned from it.

A few others that may help in consulting and also some biz development are:

500 Award Winning Small Business Secrets by Geoff Grist
350 Ways to Grow you Small Business by Peter Switzer
Million Dollar Consulting by Alan Weiss

The ones above may be dated now. I found them useful b/w 5-10 years ago. I am ceratin there will be many different titles that others can also recommend. Try some of the titles by Brad Sugars. They may be worth a look.

At the end of the as with most job roles where one is involved with "selling their time" the more valuable one can become (or be perceived to become) to their clients the higher the fee one can command.

Pete · 12th Sep, 2010

thank you, Player

regards

WinstonWolfe · 12th Sep, 2010

Where specifically do you think they can do better?

- systems
consider a business consultant to help with systems optimization. In my advertising days, we got a lot of benefit out of accountants who have worked as auditors. Their knowledge of systems was deepest back then. THings may have changed since.

business analysts can vary dramatically in quality. They generally come in and do a 6 sigma or similar analysis. If they use one, make sure they've got a commerce/accounting/business degree of some sort and preferably a MBA as well.

they might always consider a post grad diploma in business. though hard to do when you are small and runnnig the show.

- business plan and market expansion
explore govt assistance. DFAT are good if they are doing work overseas but are increasingly charging fees for everything. Qld has a Department of Employment, Economic development, and Innovation that you can approach for help with business plans, new ideas, and expansion of markets. They also have a good database of other businesses who are helpful. I've used them and found the networking side of it useful.

- succession planning
there's specialists in this field. This guy educates the financial planning industry around Australia and may be able to recommend someone local.

- mindset and positive mental attitude
probably a good idea to read a few books first. biographies are a good start. Which will inspire is a personal thing. At the end of the day, emulating someone else generally requires a similar personality. Would be hard for an introvert to emulate an extravert.

Some highly regarded titles.
Michael Gerber has written a few books since the E-myth.
Eckhardt Tolle's The Power of Now has inspired many.
Steven Covey : 7 Habits of highly effective people.
Norman Vincent Peale: The power of positive thinking. This was one of the first books in the genre.
Zig Ziglar: See You at the Top
Jack Welch : Straight from the Gut.
I've enjoyed Richard Branson's books.

Pete · 13th Sep, 2010

Thank you, Winston.

"Where specifically do you think they can do better?" Good question.

Ummm.. Understanding what is a reasonable margin / markup / profit.

I think a few basic books might help. After thinking about it overnight, I think too that some discussions with someone else who has already had success (not super success, just reasonable) in the same field would be good. I've even thought of someone we know.

They are doing fine, btw. I think though with a little more knowledge and minor adjustments they can do better, and they deserve to.

cheers

WinstonWolfe · 13th Sep, 2010

Yes, if they can talk with successful consultants in the field, who are prepared to share costings, that would be horse's mouth stuff.

The approach generally used for markup or hourly billing rate is to work backwards from a desired financial goal:

That goal should be to ensure eventually:

- salaries and benefits at least match one's market value to large employers in the sector. This includes time off for professional development and payment for 'overtime' hours, competitive super contributions. Many new start ups, especially those working on an hourly rate overestimate the hours they have to do billed work. 4 wks holidays, 2 wks sick leave, 2 wks public holidays, 2 weeks professional dev't leaves 42 weeks to cover 52 weeks of overheads.

- overheads (income protection and life insurances, leases, support staff - turnover, training, temps for holiday cover; assets leases and/or deprec, consumables, etc) are adequately covered.

- a reasonable return on capital invested.

- company profit to cover the additional risk of small business vs med/large. small business is more susceptible to the economic cycle, and a premium is paid for credit.

- Often, but not always, start ups undercut competition to improve volume and poach clients from competitors. A start up should have defined growth targets before starting, and clarity on ramping up hourly rates, barriers to entry of competition, price sensitivity in sector, stickiness of clients.

- a range of public and private sector clients can be beneficial - when one slows during the economic cycle, the other ramps up. In my experience, public sector clients are stickier once trust is established.

- often, a small business has to be prepared to drop margins in more challenging times. The ideal though is to have superior service and product, so that one doesn't have to. In most fields, superior communication skills count.

- the disadvantages of consultancies is there's restricted scope to scale growth and profits, and often after all those years of operation, you don't have a company that can be sold for healthy goodwill.

Anyway hopefully the boys won't end up like this: