Magazine article Training & Development

How to Build Your Consulting Business

Magazine article Training & Development

How to Build Your Consulting Business

Article excerpt

In 1983, I left a secure job as an accountant with Price Waterhouse to start a computer training business. I began in a small office with little furniture and no clients, but I was sure I'd succeed. I placed an ad in the New York Times and waited for the phone to ring. And waited. It was so bad I thought I might go out of business. But I adapted, survived, and thrived. Here's what I learned along the way.

Get a focus

Many of us start a business assuming that everyone is our target market. I got into the computer training business early when it was just starting to grow, so I assumed that everyone needed computer training. Even if that assumption had been true, which it wasn't, it wouldn't have yielded the best results. Instead, the goal should be to select customers that will maximize your return-on-investment.

I also learned the importance of time; there are only 24 hours in a day. Your goal should be to generate the greatest sales volume possible in the time you have to invest. That means you must find prospects who are most likely to buy large quantities of your service. You can do that by defining your target market properly.

My original target market definition was simple and crude, but extremely effective: all companies within four blocks of my office in midtown Manhattan. I designed a one-page flyer and hired models to pass out copies on busy street corners. I had a good response, and my business began to grow.

Here are several ways to define your target market.

Demographics. Choose a factor that best defines buying potential in your industry. In my former lousiness, I looked at the number of personal computers at a single location. In my current business, sales training, I look at gross sales. Speakers and trainers might choose the number of employees in an organization because more employees can mean additional speaking and training opportunities.

You can refine your target market definition by either researching the best demographics further or by adding demographic variables. The first goal should be to get a solid indication of buying potential, not guarantee that every customer in your target market will be a "great" customer.

Geography. Consider a geographic restriction. In computer training, for example, it was clear that companies in San Francisco probably wouldn't buy from a provider in New York. Likewise, companies in my region would be more likely to buy from providers located in the tri-state area than in San Francisco.

Target audience segmentation. Another option is to segment your target market. Clarify your target market definition, identify accounts (companies with which you'll do business), and assign priorities to those accounts. Select a boundary that separates the desired accounts in your target market from the ones that should be left out.

The boundary we selected, all corporate locations with 100 or more PCs, weeded out small purchasers from large ones.

After you identify the low end of your target market, label the other accounts as high priority, moderate priority, and low priority. That way, you can place the appropriate emphasis on each segment, with the greatest emphasis on high-priority accounts.

Here's how we segmented our target market:

* High priority included any organization within 10 miles of our office with more than 250 PCs.

* Moderate priority included any organization with more than 250 PCs that was outside of a 10-mile radius (but still within a 100-mile radius) or any organization within 10 miles with 100 to 250 PCs.

* Low priority included any organization with 100 to 250 PCs that was outside of the 10-mile radius but still within a 100-mile radius.

Your target market should include organizations that are most likely to buy large quantities of your service. We used geographic restrictions to define most likely and number of PCs to define large quantities. …

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