Some of our most loyal readers may recall back in July we released a book called Common Sense Consulting. It was only available for a few days and the demand was incredible. Well, we have a surprise for you. Starting TODAY you can pre-order our newest book, The Consultant Next Door, TODAY. The Consultant Next Door is packed with the wisdom Taylor and Chris learned in their first 5 years of business, distilled down into a few hundred pages. You are not going to want to miss this updated version of the book. For your reading pleasure check out the below excerpt from the first chapter of the book.
“One of the first things I like to take people through is the criteria with which to judge a “good business model.” Not all businesses are equal. What I hope to do in this chapter is show you why they are unequal, and why consulting qualifies as one of the best models around.
There are three main criteria we use to judge the operating performance of a business model:
- Effort: how much work, time, and effort does it take to operate?
- Profit: once running, how efficient is monetization of the business?
- Fragility: how easy or hard is it to be disrupted by external threats such as competitors and economic recessions?
These three pillars give you a good insight into how well a business will perform and (perhaps MORE importantly): for how long it will perform. Our main consultancy services hundreds of thousands of customers and clients each year, many of whom are brand new to consulting.
- Agency owners looking to decrease the “done for you” or “one-on-one” work
- Doctors and medical practitioners wanting to use their expertise in new ways
- Retired athletes trying to create new revenue streams in fields they care about
- Moms and dads who want to build part-time income without sacrificing pace of life
- Trainers and coaches who are tired of the 9-5 grind and want life and wealth on their terms
Consulting can work for everyone.
These are people from all over the world, incredibly diverse in age, talent, backgrounds, and skillsets… but the good news is: consulting can work for everyone.
As a professional consultant who trains other consultants, I can tell you without a doubt that when you set it up properly, a good consulting model will shine in all of the criteria I showed you.
Leveraged effort, so you don’t have to work any more than you want to work… with the right model, you can go from me in 2014 ($30,000 per year salary working 40 hours per week) to me in 2020 (several million per month working 20-30 hours per week). As you can see, with “leverage,” the effort does not necessarily need to increase in proportion to your income.
A good consulting business produces absolutely stunning margins
So you are always keeping more money than you are spending month after month. The key to a great business is not just toppling revenue. As you can imagine, earning $100,000 per year with an expense budget of $120,000 per year is not profitable and you will not improve your lifestyle that way.
Thirdly, if done correctly, consulting carries LOW fragility, meaning: you can easily weather any storm – be it economic downturns, disrupting technology, increased competition, and even health challenges.
Before we get into how to select your specific consulting model, let’s debrief together on why consulting is so powerful. Whilst I outline these key reasons, I’ll show you a few downsides to the consulting model as well. Nothing is 100% perfect, so as you build your consulting business, you’ll want to stay alert to avoid some of the pitfalls outline below.
Pros & Cons of Consulting
Whether you enjoy a good stroll through memory lane or not, learning history has profitable, long-lasting benefits. People misunderstand me on this all the time. They think, somehow, that I was born with an inherited enjoyment for reading history and biographies. That isn’t true, as I was far more into baseball and Royal Rangers growing up than I was reading.
When I got my first degree in college, I was still thinking I would work full-time in the ministry for the rest of my life, as a pastor. Indeed, I got my wish and served on staff at a church for several years.
I didn’t develop this passion for learning until I got into the ministry, and realized it isn’t what I wanted to be doing full-time!
I had a new wife who had always been entrepreneurial. She was stocked with clients as a hairstylist for many years, but when we moved to Memphis, TN for a new staff position – her clientele disappeared. All of a sudden, she was dependent on ME to pay for things that are quite important (like food, shelter, you know the basics).
The problem was, I did not earn enough money from the church to pay for these things to the level she was used to. And I became ravenous. Anything I could learn about business, psychology, and history — I devoured.
In hindsight, I think I was just looking to make sense of how I had gotten so poor, while working harder than almost anyone I knew. I always believed that if I worked hard and was diligent with the money I earned, we’d be okay. But we were not okay! I was working 80 hours most weeks and earning less than $30k per year.
One day I heard John Maxwell talk about how reading can change your life, and I started diving in.
“When you know what you want, the world becomes your library.”
In a recent interview, the legendary hall of fame basketball player Kobe Bryant said, “When you know what you want, the world becomes your library.” All of a sudden, I had a NEW target (to not be poor), and the world truly became my library.
I believe that a big part of the reason people fail in business today is simply because they do not know what they even want. Consulting is but ONE path to abundance, ONE path to surplus, ONE path to freedom.
It is not “THE ONLY” way. Once you finish this chapter you will understand why I believe it is the best and fastest way, and why my clients like it so much. But, first of all, the key in this game is KNOWING: what are you after?
What are your goals here?
Do you have a target?
I will help you set those up later if you don’t already know. In my journey from freelancing to drop shipping to e-commerce to several other business models in between, I discovered that there are four main reasons I love consulting more than anything else.
Barrier of Entry
You can describe “barrier of entry” easily by asking: “How hard is it to get started?” If the answer is, “VERY HARD!” Then you have a high barrier of entry. Historically, the barrier of entry for most business models would be quite high.
There’s a very interesting book, called “Breaking Rockefeller,” about how John D Rockefeller’s “Standard Oil” monopoly was broken up. Many people believe it was all big government (partially true), but the story is more nuanced than that.
Several business owners got together to join forces, and ultimately unlocked a certain mode of transportation that was previously inaccessible to the Rockefellers. They went all-in on this new transportation and ended up cutting costs further than what Standard Oil could do in the markets in which they were doing them…
Sounds easy, right?
Not even a little bit! There were around thirty bankruptcies along the way to this finally being able to take place. You might read this and think, “Bankruptcy… no big deal.” But back then,
Failing to pay back your loans was a death sentence to your family for three generations.
Here is why:
If your last name (let’s say ‘Smith’) borrowed money and didn’t pay it back, banks would not loan to your great-grandchildren if their last name was ‘Smith.’ This is how they tracked it back then. It all worked based on your last name. Your mistakes and the punishment from them were inflicted on your kids, your kids’ kids, and ultimately everything was a much bigger deal.
They didn’t have Equifax and the other credit bureaus we have today. Just your last name… and on top of that, most of the models of business in the 1800s and even early 1900s had inherent risks built into them. Such as poor communication, low accountability, difficulty in tracking books and money, and so forth.
You could have a great idea, but to “try” it, you had to contact someone overseas where they could potentially get the supply. That took 2 months to get across the ocean. Then they respond, another 2 months to get back. And you’re paying for communication which isn’t as cheap as it is today (which, actually, is free today).
There are so many loopholes and errors it’s hard to count. People went bankrupt simply from the costs of communicating back and forth…
Business was hard(er) back then.
And starting a business was even harder. The two brothers who teamed up, and created the runway to dethrone Rockefeller, had a major falling out because one brother thought the other was being reckless with their credit. There was so much tension around whether or not borrowing money would ruin the family lineage, that they ultimately couldn’t even be in business as partners anymore. That is some serious pressure.
You might ask, “Well why did they need credit? Why not just start?”
Because in most businesses, starting requires “startup capital” or “funding.” You have to pay some money to make some money. You can’t develop a supplement without paying someone to research and develop it for you. You can’t sell a bicycle without paying someone (or at the very least paying for the parts) to put it together first.
Good news: consulting doesn’t require this. In fact, most of our clients get started with just a couple hundred bucks or less. There’s no cost to build a product and most of the tools you can use to sell and perform consulting are either free or you already have and use them, like a cell phone, notebook, Facebook account, and so on.
(To be clear: in order to be our client, they end up investing more than a couple hundred bucks for our expertise — but that’s not an “expense,” it’s a textbook definition “investment” because they recoup that and then some while saving their time).
If you take the sum of your life experiences, you can derive expertise from those experiences, and THAT becomes your “startup capital.” You can be completely funded with expertise or “intellectual property,” rather than needing to invest in a team, special tools, material costs, or tech.”
Are you enjoying what you are reading so far?
The Consultant Next Door condenses our hard-won years of effort into a step-by-step playbook for you to follow. Consulting can be extremely rewarding. We would love to see you succeed. Best part? You can unlock these secrets for the introductory price of $0.99 RIGHT NOW.
In your service,
– Taylor & Chris