My $5,000 Phone Call: The Hidden Value in Consulting Conversations
Every so often, a single phone call can transform a business. As the founder and managing director of a consulting firm, I recently found myself in a 4.5-hour call that led to an intriguing revelation – it had unintentionally become a $5,000 consultation.
The Unrecognized Value of Consulting
In the world of SMB consulting, we strive to uncover hidden growth potential and build resilience in businesses. By identifying and solving complex problems, we help businesses thrive. Yet, often, our work is misunderstood and undervalued, especially during preliminary conversations.
The Incident: My $5,000 Phone Call
One day, I received a call from a potential client seeking advice for his business. Four and a half hours later, we had collectively identified solutions that, if formally quoted, would have cost $5,000. He admitted his problem was solved, but how could he pay me for an impromptu consultation? It was clear that he valued the input, but we had no framework for this exchange.
The Hidden Cost of "Free" Advice
These "discovery" sessions have costs, often hidden but very real. The time we spend discussing, strategizing, and problem-solving is time we could have used to service existing clients or cultivate new leads. There's an opportunity cost to free advice, a cost that can jeopardize our business's sustainability if not properly managed.
Fairer Business Practices: Respecting Professional Expertise
To address this, we need a paradigm shift in how businesses approach consulting firms. Initial engagements should respect the value of professional expertise and be willing to compensate for significant contributions. Whether it's through a nominal fee for discovery sessions or a clear contract outlining the conditions of preliminary consultations, fairness must be at the forefront.
Balancing Generosity and Sustainability
As consultants, we want to be generous with our knowledge. However, our generosity should not undermine our business's sustainability. We need to set clear expectations for discovery calls, limit the scope of advice given freely, and establish consultancy fee structures that reflect our expertise's value, including remuneration for strategy sessions.
A Win-Win Situation: The Way Forward
A more equitable approach to initial consultations benefits both parties. It leads to better working relationships, increased respect for consulting expertise, and ultimately, more effective and profitable outcomes for clients. This fairness will allow consulting businesses to continue offering their invaluable services without the risk of burnout or financial strain.
In a world increasingly reliant on knowledge-based services, it's high time we reassess how we value and compensate for these services. It's time to acknowledge that even preliminary conversations have significant worth.
Afterword: Reflections on the $5,000 Phone Call
Looking back at my $5,000 phone call, I view it not as a loss, but as an opportunity for growth and learning. The experience catalyzed changes in our consultation processes and spurred this conversation about the value of consulting expertise. It taught me that even though generosity is one of our core values, it should not come at the expense of our sustainability.
In the end, we should strive to ensure that every phone call is a win-win situation. That way, we can continue to provide the invaluable service that consulting is known for, fostering growth, profitability, and resilience in businesses across the board.
Mohammad Dabbas | Managing Partner
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