How Consultants Can Make Money in a Down Economy

Just because the market is in the toilet doesn’t mean that there aren’t opportunities for consultants to grow their businesses. In a strong economy many of us consultants make money despite ourselves. The consultants that are worth their salt are the ones that can weather a slowdown in economic conditions or even thrive.

There are two ways for consultants to make money in a down economy: First, they can identify a specific market segment that is bucking the trend. Second, they can alter their sales methods and value proposition to match what the market needs.

In the first case, it can be difficult to find that needle in the haystack and many of us simply stumble upon opportunity if we are lucky. An example from the last recession was companies operating in the mortgage industry. They were the only companies that were spending any money at all as they benefitted from the refinancing boom. As a result, mortgage lenders and credit reporting companies were flush with cash and were just about the only game in town. This time around that segment is obviously not throwing a lifeline.

Fact is that we should always make sure that our sales pitch matches what the market needs. It’s amazing just how many consultants only know how to sell on their background, track record or experience (i.e. their resume). This leaves most employers wondering what the consultant can do for them today. As consultants, we all need to sell to what is motivating purchasers of our services. Nobody cares what you did last year. Everyone is interested in what you can do for them now. This is especially important when dollars get tight.

So what is motivating businesses to purchase services now? It seems obvious to anyone whose head is not in the sand; the market is tanking, the government is becoming a major shareholder in some of our premier financial institutions, investment banks are now chasing deposits, oil prices are raging and the dollar just doesn’t buy what it did six months ago. What does this mean? It means that companies are digging in. On the surface it might seem like nobody is spending any money. Fact is that some companies can be highly motivated to spend dollars if it will mitigate risk or help them preserve their hard-earned market position as they try to weather the storm.

Almost any consultant can alter their current sales pitch and package their services to fit neatly into the motivating factors of the market today. For example, if you sell IT services you probably spend a lot of time extolling the benefits of your expertise or how companies can expand the bandwidth of their IT departments by hiring your firm. These are pitches for a growth market. You should start to think about how your services can be used to reduce risk for clients. Offer code reviews to improve software performance and help preserve market share. Sell on the reduced cost of doing business by helping clients keep their overhead lower. Help clients expand their reach with less expensive non-development projects such as implementing discussion boards to get closer to their customers so they can head off revenue leakage.

If you don’t think your expertise can be positioned as a risk reducer for clients then you should ask yourself if you can use your experience to help clients find a way to generate new revenue with the assets they already have. Most companies own tons of intellectual property but don’t know what to do with it. Can you get their content into a useful format on the web? This will help generate interest in their core products and depending on the nature of the content it might actually enable them to solicit subscription revenue.

Another approach would be to find a way to expand your current offerings to your existing client base. These are the companies that know and like you (assuming they pay their bills). Consultants should be looking for ways to gain deeper penetration into these firms. Is there some service you offered some clients that you have not sold into other clients yet? You know your clients’ businesses as well as they do. You should think about how you can improve operations, reduce costs or expand their reach and suggest these things as new proposals. At the very least this kind of proactive selling might let them know that you are thinking about them. Bringing value added ideas to the table for existing clients will keep you on their radar.

In the end, this is the time to get creative and think outside the box not a time for panic. Chances are all you have to do is repackage how you sell your services in order to thrive. Many companies find a way to thrive in tough economic conditions, why not yours?