Professional Services Business Model for 2030
We work with a large number of professional services firms and as they get larger, we often see a repeated pattern of behaviour – behaviours which turn them from a small, agile, profitable business into a slow, bureaucratic, cost heavy dinosaur.
My clients will tell you I am known for direct, clear advice – well here it is:
- The end of the month occurs at the end of the month. The number of firms who create month end to suit some arbitrary timeline amazes me and no-one can sensibly explain why.
- Firms should invoice their clients as soon as work is completed (even better upon acceptance of the proposal/interim invoices or regular monthly instalments). Why do we wait until month-end and race around like lunatics trying to work out what to invoice?
- Work in progress (WIP) is like your stock. Imagine if inventory were to be stolen, written off, lost, or worst of all, sent out without ever charging for it, yet all of these happen quite often in a professional services firm.
- The power of an hour – each hour worked has only three possible outcomes – multiplier (by producing and invoicing billable work at a higher rate than cost), neutral – non-billable (admin etc.) time and the worst scenario – divider – work on a project or job then write the time off.
- Profits are the result of doing everything else well. Positioning is a vital skill – marketing and promotion as a GP is not great positioning – if you are a heart surgeon – you need to own Thought Leadership in that space!
Given that you are most likely in professional services and love understanding the detail behind these key points, please check out some of the critical factors in this whitepaper.
– Craig West