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recession proof business for consultants

6 Steps To Build A Recession-Proof Business (For Consultants)

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There is a lot of talk right now about us being in a recession or the likelihood of us entering one soon.

Regardless of when this happens (it’s not a question of IF, but WHEN) there are steps you can take to prepare and prosper as a result.

Your consulting business should be a recession-proof business.

Why?

Consulting businesses are one of the most recession-proof businesses you can build.

Unlike most other businesses, consulting businesses…

  • Have minimal costs/overhead
  • Don’t have any inventory
  • Allow you to be flexible and make changes quickly

By the end of this guide, you’ll learn 6 actionable steps for how to turn your consulting business into a recession-proof business — and be prepared to not only survive a recession, but to thrive and grow during it.

Let’s dive in…

QUICK LINKS

  1. Help Clients Create Growth
  2. Help Clients Optimize
  3. Create New Offers
  4. Build A Community
  5. Leveraged Distribution
  6. Trim The Fat (& Double-Down On What Works)
  7. Remember: The Market Always Bounces Back
  8. Get Help Building A Recession-Proof Consulting Business


1. Help Clients Create Growth

The first opportunity is to help your clients capitalize and grow during a recession.

What are the opportunities for your existing clients, past clients, and potential clients?

Position yourself as the opportunist — the expert who can help your clients make the most of the opportunity that comes with an economic downturn.

During challenging economic times, many business owners are fearful. They have not been managing their profit margins and balance sheets. Perhaps they expanded too quickly. They haven’t had great management.

Some of them go out of business. And many are playing catch-up.

Or, they haven’t spent much time planning, so they’re having difficulty handling the pressure.

During recessions, organizations that are prepared can go out and acquire these struggling businesses.

Can you help your clients scoop up other businesses, assets, or market share?

Can you help your clients make some strategic shifts that put them in a stronger position in their market?

When your client’s competitors take a step back and play defense, help your clients advance and play offense.

The big opportunity for you is to start looking for and finding those opportunities with your clients.

Provide recommendations and guidance around what they can and should be doing to capitalize while their competitors are pulling back.

Start by sharing your ideas and expertise in your content and conversations.

Position yourself as the opportunist — the expert who can help your clients make the most of the opportunity that comes with an economic downturn.

In my book Act Now: How successful consultants thrive during chaos and uncertainty Jill Konrath shared, “People tend to stay with the status quo unless they absolutely have to change, but it is imperative that consultants be willing to do some things differently and help clients adjust to future changes as they unfold.”

As an outside expert, you may be able to provide key advice that will help them manage these changes and benefit from them.

Josh Long, a marketing consultant says, “It’s our job to run toward our clients. Step into their situations and start offering help. For example, let’s say you have a client who canceled their pay-per-click advertising because of the current uncertainty. You have access to their analytics, so take a look and see what you can find. Are more people navigating to a certain page? See what the data reveals and write copy for messaging to help them get more out of their advertising. Think like an innovator and find creative solutions. Keep the relationship alive by helping clients continue to grow.”

We don’t know how events are going to unfold in the future, and things may change faster than we would like. Be prepared to adjust on the fly.

2. Help Clients Optimize

The second opportunity is to help your clients optimize their business.

How can you help your clients improve or optimize what they already have?

There are always areas where you can help your client refine and improve.

This might be things like expense management, improving profitability, operations, etc.

For example, can you help clients run their business more efficiently or effectively?

Increase productivity?

Increase performance?

Whether that’s their people, machines, or supply chains, help your clients get the most out of their existing resources.

You have insights from working with many different companies — insights that your clients will pay you for.

There are always areas where you can help your client refine and improve. And during tough economic times, this is a great area to step in and offer your help.

While clients are dealing with downtime, lack of options, and anxiety about their business, you can provide key advice and encouragement to help them keep going.

Now is a great time to reach out to every client, past and present, and see how they’re doing.

They will appreciate the concern, and you can use it as a chance to offer support.

During the conversation don’t sell. Focus on them. And if you identify a way to help with one of your offers let them know. Don’t be pushy. Let them know that you are available to help at any time and continue to reach out periodically.

In the early days of the COVID-19 pandemic, I spent time on a Saturday morning calling clients and checking on them. I didn’t sell anything. Actually, I didn’t talk about business at all.

Instead, I just asked how they were doing and how their families were holding up. They appreciated my call. Building relationships with your clients is always time well spent.

As Dorie Clark says, “Just check in and see how they’re doing. Don’t fool them with a sales pitch. Nobody likes that. Be thoughtful and upfront. If they have a problem you can help with, mention that you specialize in it. You might say, ‘Hey, I just happen to offer this particular solution. If you know of anyone who needs it right now, I’d love to help, and I would appreciate a connection or referral.’ As long as you’re straight up about that and you have a good relationship with these people—and you’re not cold pitching random strangers—it will probably be well received.”

3. Create New Offers

The third opportunity and step is to create new offers.

There are opportunities for you right now to create new offers and help your clients.

What kind of unique offer can you create that speaks to what your ideal client is thinking about right now that is relevant in today’s marketplace?

When you begin sharing your ideas from steps 1 and 2, some ideas will resonate more than others. Clients will perk up when you mention them.

That’s an opportunity for you to develop a new consulting offer — or a variant of one of your current offers.

For example, during the COVID-19 pandemic, there were consulting businesses that generated all their leads from speaking engagements. Well, as we all saw, live talks came to a halt rather quickly.

During this time, consultants had to go into action. This wasn’t a time to sit around and wait for things to change. You had to create the change you want to see.

That’s exactly what people did. In this case, they shifted from live speaking events to new offerings like online workshops, virtual keynotes, and presentations.

Consultants who were used to working with their clients in person created new remote consulting offers.

What kind of unique offer can you create that speaks to what your ideal client is thinking about right now that is relevant in today’s marketplace?

What service could you provide to your client that would help them to deal with the uncertainty and challenges of a recession?

Could it be…

  • A strategic planning workshop to prepare for a challenging economic time?
  • A session on how to get more out of your existing team?
  • An engagement on how to drive more profitability and cut waste in their operations?

Use social media to gauge interest and make offers that are mindful of circumstances. Use your email list to reach out to existing clients or prospects. Don’t be afraid to call people directly. Many will appreciate the contact.

It’s time to get creative and embrace innovation. Now is the perfect time to try new offers.

4. Build A Community

The fourth opportunity and strategy is one I’ve been recommending for several years now: build your community (see the link for a great resource on this topic)!

This is a massive opportunity that very few consultants are taking advantage of.

By community, I’m talking about those in your market who you’ve developed relationships with: your past clients, existing clients, colleagues, partners, etc.

It also includes the individuals and communities that support you, hold you accountable, and will help you grow your business in uncertainty. None of us can do this alone. We need people to help, support, encourage, and teach us.

In times of economic challenges or when there is uncertainty in the marketplace, a lot of organizations start cutting recklessly.

The other day, I was grabbing coffee with a friend of mine. He runs a very successful digital agency with over 100 employees. His clients are some of the biggest, most well-known brands in the world.

We were speaking about how quickly a looming recession could change things.

Here’s what he told me…

“Michael, 3 of our clients canceled their contracts — in one week.”

These kinds of things happen.

But one thing you can do to lessen this risk is to build and strengthen your community.

The stronger the relationships you have with your clients, the more bonded they will feel to you and your community the less likely they will be to cancel their engagements with you.

One of our values at Consulting Success® is “We Are La Familia”:

We’re a family-owned business and we treat our team, clients, and community like one big family with respect, honesty, genuine care, and trust. We go the extra mile for our clients and team members. We truly want to help the people we come in contact with. We love to serve people beyond what is typically expected in a business relationship.

It’s this core value that has helped us build such a strong consulting community. And it helps with retention as well.

None of us can do this alone. We need people to help, support, encourage, and teach us.

As you develop your community, you’ll also learn that it becomes a powerful source of new business. So instead of having to go out and make connections with new people, you’ll be able to tap into your own community.

These people have read your articles, attended your webinars, and have read your LinkedIn posts. They know you, like you, and trust you. And they’ll be far more receptive to your offers.

You can start your community by starting a small virtual round-table.

As Rita McGrath said, “Find ten to fifteen people who you think are smart and who are willing to give maybe an hour a week for a virtual chat. Support each other. Share individual experiences. It can just be informal mingling, but that kind of regular communication is critical for consultants, especially if you’re more on the independent side.”

Be the leader who creates and fosters a supportive community in your market that can provide resources, encouragement, and ideas. You’ll benefit from it in more ways than you can imagine.

5. Leveraged Distribution

The fifth strategy is leveraged distribution.

This is all about creating relationships with the different media, partners, and people who have access to your ideal clients. For example, I’m often invited to speak on business and consulting podcasts.

What websites, groups, or communities can get you in front of more of your ideal clients at one time and with less work than doing 1 to 1 individual outreach?

Through these podcasts, I’m able to reach thousands of entrepreneurs — many of whom are our ideal clients: entrepreneurial consultants.

That’s leveraged distribution.

As a consultant, you should consistently share your ideas, content, and offers with your market.

You should be thinking about how you can reach new people.

What websites, groups, or communities can get you in front of more of your ideal clients at one time and with less work than doing 1 to 1 individual outreach?

Here’s another example. Let’s say you find an industry association in your market.

Or it could even be a blog that publishes content in your market.

Essentially, you’re looking for any source that your ideal clients go to for information.

Once you’ve identified those sources, your goal is to appear on them.

You could…

  • Write articles for them
  • Do a podcast with them
  • Host a webinar with them
  • Deliver a speaking engagement for their audience

Start by making a list of the publications that serve your ideal clients.

Then, begin reaching out to them. Provide value. Develop a relationship.

Think about ways you could help them better serve their audience. Then, pitch them on something you can deliver to their audience that would provide value.

Using this method, you’ll be able to get in front of many of your ideal clients at once.

This is an extremely powerful strategy: building high-value relationships, creating content, and demonstrating your expertise to ideal clients at scale.

6. Trim The Fat (& Double-Down On What Works)

The sixth strategy is to cut your expenses and double down on what is working.

A helpful mindset here is investment vs cost-cutting.

When you read this, we may or may not be in a recession.

Currently, as I’m writing this (June 2022), it’s looking like we might head into one (if not already in one).

Regardless, you want to be thinking about:

  1. What expenses you can cut that aren’t creating value for you.
  2. What you should NOT cut, keeping the things that are valuable.

It’s just as important to NOT cut things that are creating value in your business.

Value isn’t about time. Value is about outcomes.

In fact, I’d say that’s even MORE important than cutting costs.

For example, let’s say you’re paying for a subscription but you’re not using it or getting value from it.

That’s stuff that you should cut or downgrade. This will help you conserve cash. Right away, it will help your business become more profitable.

A good way to begin doing this is to review your credit card bills. Examine the things that you are spending money on. Anything on that list that doesn’t provide value should be cut—at least, for the time being.

You can revisit these items once the current uncertainty has passed, but you may find that you can continue to do without them.

In that sense, the current crisis might be doing you a huge favor of revealing some fat you should trim from your business.

But don’t be fooled — you might end up spending 10 hours to save $80 a month. And cutting that cost is not really cost-cutting. That’s a negative investment.

Make sure what you cut is actually going to move the needle — and that cutting it won’t cost more of your time.

There are a few things that I’d encourage you not to cut, even in times of economic uncertainty. You might need them more than ever. This includes your marketing and advertising budgets, learning resources such as books, and the coaches you are working with.

All of these people and resources will help keep you on your feet and moving in the right direction. When the status quo is shaken, learning resources can prevent you from becoming timid and complacent, so you’re able to continue getting things done.

Your marketing, books, and coaches (as long as they are creating value) are worth keeping.

When you’re looking at where you spend your money, analyze how much value you’re getting from something. It’s less important how often you use it. Don’t cut the investments that are giving you a positive return.

Value isn’t about time. Value is about outcomes.

Maybe you spend a few hundred dollars a month on a personal trainer. On the surface, it seems like an expense.

However, consider how your personal trainer — and exercise — make you feel?

When you exercise with your personal trainer, you feel more confident. You’re more energized. You sleep better. You’re more focused. You eat better. You look better. You do better work.

That’s not an expense to cut. That’s an investment worth keeping.

Focus your efforts on those investments that will keep you moving forward.

Remember: The Market Always Bounces Back!

Before I wrap up this guide, I want to share a quick history lesson with you.

The first stock market crash in history is generally believed to be the bursting of the speculative bubble on Dutch tulips in the 17th century. After prices skyrocketed between 1634 and 1637, speculators cornered the market, buying up all the tulips they could get their hands on.

This, in turn, caused the interest in tulips to wane, and the market crashed. The ripple effect sent the Dutch economy into a tailspin. It must have seemed like the end of the world, economically speaking, but the market recovered.

The first major U.S. stock market crash in 1929 brought the Roaring ‘20s to an end and ushered in the Great Depression, the worst economic downturn in the history of the industrialized world. Caused by inflated stock prices, reckless speculation, and overborrowing, the resulting fallout caused widespread panic.

The consequences were devastating. In the immediate aftermath, consumer confidence evaporated, which led to a massive downturn in spending. Production slowed, and by 1932, worldwide gross domestic product (GDP) had fallen by an estimated 15 percent. Unemployment in the U.S. reached 23 percent, and almost half of the banks in the country failed.

Because of global adherence to the gold standard, which created a fixed currency exchange, the economic woes soon spread from the U.S. across North America, into Europe, and throughout the world.

It must have seemed like the market would never recover. But the stock market did recover.

Focus more strongly on meeting the particular needs your ideal clients are struggling with right now, lean into the chaos with help and hope, and clients will be far more likely to respond.

It also recovered after the Dot.com bubble burst around 2000, which was caused by excessive speculation in Internet-related businesses. It recovered from the Great Recession of 2008, when the U.S. housing market bubble burst due to an overabundance of low-quality subprime loans.

Are you seeing a trend?

There have been numerous bear markets just in the last few decades, and the economy and market has recovered from all of them.

The point is, we’ve been here before, and we’ll probably be here again. When trouble of any kind hits the economy, some see only doom and gloom.

They focus on the current loss and project that into the future, expecting the worst and responding accordingly—typically, by freezing up and failing to respond at all.

It’s true that the markets historically pull back in times of disruption and crisis, but they almost always recover the losses—and then some—in the years that follow. With the right mindset, clear-thinking, and a smart strategy, you can get through this current crisis, as well as any and all future crises. I can say this with confidence because many, many business owners have done so.

During the recession of 2008, when whole industries seemed to be collapsing, some companies managed to survive, and even thrive, as a result of smart leadership. Some of these companies had the odds stacked against them.

Global consultancy Bain & Company analyzed nearly 3,900 companies to determine why some thrive during an economic downturn while others flounder, focusing in particular on the time immediately before and after the 2008 recession.

Their conclusion is that the biggest losers during the recession “tried to slash and burn their way to the other side, under the misconception that extreme cost-cutting would stabilize the enterprise…Still others tolerated poor results during the downturn, waiting to see what would happen, and then finally took action—too late.”

The winners, on the other hand, were wise about taking advantage of opportunities. As the report indicates, “While they focused intensively on cost containment, [the winners] also looked beyond cost. Playing offense almost always trumps simply hunkering down, and the best companies usually gain market share during a challenging economy…The strongest companies coming out of recessions went on offense early while others thought only about survival.”

By leaning into the crisis and looking for opportunities, many companies in many industries are able to thrive in circumstances that destroy others.

Proctor and Gamble thrived during the Great Depression of the 1930s through a counterintuitive marketing strategy. When most companies were scaling down their advertising efforts, P&G actively pursued new marketing opportunities. Indeed, in 1933, they came up with the wild idea to produce a daily radio serial to promote their soap products. That program, called Oxydol’s Own Ma Perkins, became the first “soap opera.”

While other business leaders were sticking their heads in the sand, Proctor & Gamble made smart decisions and kept pushing forward, looking for improvements they could make and actions they could take. As a result, they benefited tremendously. Similarly, FedEx, General Motors, and Apple are all companies that rose to prominence during recessionary periods.

Retail companies were hit especially hard during the 2008 recession, yet Amazon saw sales rise by 25 percent. While other companies retreated, Amazon moved into new markets and launched the next iteration of one of their most successful products: the Kindle 2.

On top of that, they focused even more strongly on customer service and competitive dominance, lowering prices at a time when customers were concerned about their income.

As a consultant, you’re not a retailer, but like Amazon, you can think about new offers, products, ideas, and services that will contribute to growth even during difficult times.

Focus more strongly on meeting the particular needs your ideal clients are struggling with right now, lean into the chaos with help and hope, and clients will be far more likely to respond.

Bain & Company’s co-author on their research, Tom Holland, put it even more succinctly: “Think of a recession as a sharp curve on a race track—it’s the best place to pass competitors, but requiring more skill than on a straightaway. ”

Get Help Recession-Proofing Your Consulting Business

Consultant, this is your chance to get ahead.

Entire fortunes are made during recessions.

But they aren’t made by those who play defense and just try to “survive.”

They’re made by those who go on offense, seek opportunity, and play to win.

We’ve grown our consulting business during 2 recessions -— and we’ve helped over 800 consultants do the same.

And we’ll continue to grow during this recession — and any future recession.

So, if you’d like our help taking advantage of these challenging times, our customized Clarity Coaching program is for you.

We’ll work hands-on with you to develop a strategic plan and then dive deep and work through your ideal client clarity, strategic messaging, consulting offers, fees and pricing, business model optimization, and help you to set up your marketing engine and lead generation system to consistently attract ideal clients.

Schedule a FREE growth session today to apply for our limited capacity Clarity Coaching Program by clicking here.

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