Identifying Prospects and Developing Proposals
Finding and Engaging with a Client
The consulting business is built on relationships that are based on integrity and trust. Relationships take time to develop and can’t be rushed but they can be purposely developed.
Consultants seek relationships with individuals, business leaders, and influencers in the consultant’s field of expertise. Some of this is the result of cold calling and making an introduction.
A successful cold call usually allows the consultant to learn more about a business and challenges it faces. Sometimes a cold call does result in a business manager seeking advice and asking for some assistance. This is not the norm. Usually developing a consultant-client relationship takes some time and effort.
To find clients, consultants will likely become engaged in clubs and associations that would be in their area of expertise and attended by individuals working with companies in that same field. Additionally, joining civic clubs that have a broader range of membership can be very beneficial. High-profile organizations are attended by business leaders and have common business interests.
Some organizations that are industry based include:
- Financial organizations such as Financial Executives International or AICPA;
- Energy Organizations such as Society of Petroleum Engineers;
- Manufacturing organizations such as National Association of Manufacturers.
There are as many of these organizations as there are industries and there are local chapters in virtually every city. Serving on committees, chairing events, and serving on the board of directors will allow a consultant to gain stature in organizations that can provide contacts with potential clients.
Additionally, joining civic clubs such as Kiwanis, Lions, or Rotary clubs provides many networking opportunities as well as opportunities to serve in leadership roles.
There are also community development organizations that offer the same opportunities. These include:
Chambers of Commerce;
Chamber of Commerce Leadership Programs (e.g., Leadership Houston or Center for Houston’s Future); and
Nonprofit Organizations.
As relationships mature and clients materialize, a successful consultant spends time nurturing each relationship by staying connected and offering advice and assistance when appropriate.
Determining the Need—Whether the result of a developed relationship or a cold call, a project proposal must be based on a potential client’s needs. Uncovering the needs of a client usually is based on gaining a real understanding of an organization, its structure, and its challenges.
The best approach to gain the understanding is usually through honest dialog. Here are a few questions a consultant can ask that can provide a good starting point:
- “How does your organization create value for your customers?”
- “What are the things your organization does best?”
- “What are some areas that your organization can improve?”
- “What change would have the greatest impact on the success of your organization?”
These are conversation starters but they can provide a wealth of information. If a consultant asks these questions and takes careful notes, the client will provide information that can be useful in identifying a project’s objective and developing a proposal.
Usually, these initial conversations will identify the needs of the client and the initial parameters of a project, which will become the basis for creating a proposal for the client.
Defining a Project Objective and Developing a Proposal
At the point that discussions with a prospect turn into the identification of an area of need, the basis has been laid to develop a proposal. The area of need would establish the objective of a consulting project.
In the initial discussions an effort should be made to identify as precisely as possible the area of need (objective) and the deliverable that would provide real value. This deliverable will be the core of the proposal. For example, if a client has an idea for a new product but doesn’t know the size of the market or if the product fills a real need, the area of need or objective would be understanding the value of the proposed product to consumers and determining the size of the market. The proposal might be to: “Identify the target market for product x and quantify the size and value of the market.”
Defining the Project Boundaries—Project Scope—The key to a successful consulting project is clearly establishing the boundaries of the project before work begins. In the initial discussions focused on identifying the needed deliverable, it is important to lay the ground work to specifically define the work the consultant will perform. This may be the most important step in a project proposal. If written with little specificity, the scope of the project can grow, resulting in “scope creep.” Trying to establish limits after the proposal has been accepted can result in friction with the client and the possibility of a failed project.
Here is an example of a poorly written scope statement in a proposal that resulted in significant difficulties:
Market Potential will be investigated using primary market research including, but not limited to, surveys, interviews, and focus groups along with secondary market research for data related to the potential of the Project within the USA. The research needs to identify the customer market need along with their willingness to pay for solution pertaining to specific applications. The research will identify which applications have the most potential within the US market.
This statement leaves the potential for the client to keep asking for research well beyond what was intended by the consultant. In this case the consultant should have been specific on the number and types of surveys to be conducted.
Setting the boundaries of a project has an impact on the consultant’s time and the cost of the project to the client. In Chapter 2 the Market Growth Project example set as an objective the following:
To determine the feasibility of providing housing, infrastructure, and land for under $30,000 per unit in the colonias located in New Caney, Texas. The project also includes designing an affordable lending scheme for the residents in Colonias of New Caney, Texas as well as creating a financial model which is capitalistic, sustainable, and replicable in all the colonias across the United States—Mexico border.
Clearly, a lot of work would need to be done to achieve this objective; the consulting team considering this objective, the time available (14 weeks), and the budget (small) set the following scope for the project:
The scope of this project includes a feasibility study and a financial model for the Colonias in New Caney, Texas. This project specifically focuses on determining whether it is viable to provide housing, infrastructure, and land for less than $30,000 per unit and, if so, what financial model would work to make it profitable, sustainable and replicable. Other portions of the overall project such as design, architecture and construction of housing and infrastructure, compliance with government regulations and overall implementation of this model are excluded from the scope of this project.
Using this scope, the work for the project was confined to a substantive outcome that could be accomplished within the time and money allotted by the client.
Parking Lot Items
The items that were specifically excluded from consideration are called “parking lot items.” These clearly identify work that will not be included in a project but may be the basis for a separate consulting engagement. The following portion of the colonies scope statement would be characterized as parking lot items and could be the basis for future follow-up consulting projects.
Other portions of the overall project such as design, architecture, and construction of housing and infrastructure, compliance with government regulations and overall implementation of this model are excluded from the scope of this project.
Consultants can use parking lot items identified in the definition of a project’s scope as opportunities for follow-up consulting projects with a client. Parking lot items are generally closely related to the project that is underway and an additional consulting assignment centered on a parking lot item may be a necessary pursuit to implement the initial project. For example, the parking lot items identified earlier for the colonias project will be necessary if there is a desire to move forward with providing affordable housing for the economically disadvantaged.
Presenting the Proposal
The type of presentation a consultant makes to a client depends on who will be in the audience. For some project proposals, there is no presentation. The consultant may have a very good relationship with the client and a one on one meeting with the client may result in the approval of a consulting project.
In many cases though, the initial contact within an organization may not be the decision maker. The original contact may be the sponsor and champion of the proposed consulting project but may be only one of several with input that will influence the decision to move forward. In presentations to a group, the consultant should recognize that there will be gate keepers, influencers and decision makers. Gate keepers can simply kill a project by not letting the consultant have access to the decision maker.
Influencers may have other priorities and uses for resources and might not want to support a consulting project. An influencer can cause the failure of a project even if it is approved by not providing critical support.
Decision makers usually rely on input from across a management team and if there is a lack of support from the key managers, the project will not likely move forward.
The consultant will have to consider the individuals in the presentation, their roles in the organization and the amount of time they are willing to listen to a presentation. The consultant will have the greatest chance of success if the objective of the project and the benefits that result from a successful project came are clearly described. The benefits should be relevant to gate keepers, influencers, and the decision makers.
Finally, the consultant should be prepared to deliver the presentation in a short period of time. Managers and executives have a limited amount of time and will quickly lose interest and stop paying attention when a presentation is too lengthy.