Larger Consulting Firms: How does it work; When does billing start?
Hello WSO,
I invented something with a lot of market potential. It looks like I'll need a somewhat big (maybe even really big) consulting company to help me with the final steps, working out the details, contacting potential international joint-venture partners, structuring the deal(s), etc.
My question: how does it all work and when does the billing start? I'm good at what I do but have only limited knowledge of the consulting world. How to best proceed? Contact consulting companies, tell them what I want, ask for a meeting? And then ask for a proposal? Will they only bill me after we agree on a proposal? I heard about some fishy consultants who bill you quite ruthlessly.
It all depends on the statement of work. Some SOWs are fixed fee, some put fees at risk, some are focused on the billable hour.
There should be nothing billed for the proposal.
One question to ask yourself is why go with a consulting firm at all vs. hiring some bus. dev. FTEs.
Thank you, I appreciate your feedback.
I see more benefit in 'guiding' a consulting company towards a solution that works for me instead of trying to find a person to hire. Since I don't know all the required steps a consulting company would need to take, I'd be limited in what to look for when hiring this person.
Also, in the past (for a different project) I had very little success getting past gate keepers... the right people to contact are just below C-level, and I believe a reputable consulting company (that might even have worked with the target company before) would have much better access.
And it's not just about how to reach them or how to prepare documentation (another area where I need help)... the "who (to target)" could/ should probably also be expanded: what I invented is of high value in a somewhat broad range of industries. There are most likely areas of application I haven't considered yet, and since (for the moment) the solution I plan to offer can't be scaled beyond its current scope, I'm looking for the best fit (the best area of application) that would give me the highest profit margin. A consulting company with experience in many industries should be valuable here. Once the most profitable industries have been determined, one idea would be to do an auction where potential buyers are bidding for a given yearly volume.
I did this once to roll out a new service within the community bank space. Needed access to C suite. Choices were:
I chose option option 3. Paid a flat rate per bank contract and then a small percentage of revenue for a set period of time. 100% of "fee" was results based. Worked out well for him as he got paid very well for getting us in to a few banks. Worked out well for me as I didn't have to: Hire, manage, supervise or pay fees without results.
For a long term, sustainable marketing approach, we hired someone a few later. It depends what stage of business you are in. For start up, consultants make sense provided the fee equation is heavy on results.
Consultant is a loose term used by many. We actually hired a head hunter who specialized in the small bank space. He had previously worked in that world, new lots of people and could tell our story to the right people. Once we got in, it was teed up to close (which is one of my specialties). So in essence we paid this guy a bunch of money for gaining access to the right players quickly. We could have done it ourselves but sometimes that's brain damage. We sold him on the story, gave him a piece, and let him work his network. When that was exhausted, we didn't have to fire anyone, just stop the project.
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