🎙️Show Notes for Episode 036 - Consulting Business Owner Fundamentals with Will BachmanNov 17, 2021
My guest today, Will Bachman, was very aware of this fact and as a result, he founded Umbrex, a global community specifically for independent consultants that creates opportunities to build relationships with peers, share lessons learned, and collaborate.
Prior to starting Umbrex, Bachman was a nuclear-trained submarine officer and a consultant at McKinsey & Company. He graduated from Harvard College and has an MBA from Columbia Business School. Will invites listeners to connect with him on LinkedIn: https://www.linkedin.com/in/willbachman/
In this conversation, Will shares some valuable insights on how to build and grow your independent constant business. He also provides a very detailed step-by-step guide on how to successfully engage with a community like Umbrex to ensure mutual success.
As a bonus, Will shares a discount code you can use to gain access to The Umbrex Guide to Setting Up Your Consulting Practice, a video course that covers everything you need to know to set up your own consulting practice: setting up your legal entity, getting insurance, building your virtual team, and finding consulting clients. 90 videos; over 30 downloadable tools, templates, or checklists; and more than 200 curated links to additional useful material.
On this episode, I discuss:
[01:04] Meet Will Bachman
[02:07] What Umbrex is
[4:03] Current trends for those buying IC services
[5:02] How corporate clients go about searching for IC consultants
[06:16] How corporate clients make decisions about IC consultants vs other options
[08:33] How IC consultants can capture the attention of decision-makers
[12:03] Tips for IC consultants when engaging with a community like Umbrex
[18:00] How rates should be determined when working with consulting clients
[22:39] How IC consultants are getting in their own way
[24:02] How to work with Umbrex
GUEST INFORMATION —
Will Bachman, Co-Founder at Umbrex
LinkedIn - https://www.linkedin.com/in/willbachman
Website - https://umbrex.com/
Twitter -@willbachman - https://twitter.com/willbachman
Unleashed Podcast -https://podcasts.apple.com/us/podcast/unleashed-how-to-thrive-as-an-independent-professional/id1227297532?ls=1
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**note: This is an automated transcript, so please ignore spelling errors and grammar mistakes*
Welcome back to the podcast. I'm so glad you're here again this week. And I'm really excited to introduce a guest that I brought will Bachman we met on LinkedIn. And he has such a wealth of knowledge about independent consulting, and the staffing industry. And so, I can't wait for him to share his perspective with you on how to make more money as an independent consultant, more money, more impacts have more influence and more flexibility. So, we'll let's start out and have you introduce yourself.
Well, Melisa, thank you so much. It's great being on your show. I love the work you're doing and all the resources you're put together on your website. So, we'll Bachman I was at McKinsey for five years, after five years in the Submarine Force. I started my own independent consulting practice in 2008. And what I'm doing now is running a global community of independent management consultants called M brex. That's you MB Ari X. And I'm pretty active on LinkedIn. Your listeners are welcome to send me a connection request. It's will Bachmann be Ach, MN. And if you look me up, you probably find me there. I have a connect request and look forward to the show.
Yeah, thanks. Well, this is great. We'll have me on his podcast a few weeks ago. And so, it's fun to turn the tables and now get to ask him a lot of questions. So, let's just start off and why don't you tell me more about, um, Rex, how you got started and what you do and give us all the details?
Sure. Well, the idea of, um, Brexit really started with community. So when I left McKinsey, and started my own consulting practice in 2008, I thought it'd be valuable to be connected with a set of peers of other independent management consultants that were doing the same thing, to have people to share lessons learn with, I didn't know how to, you know, write a statement work or find health insurance or an attorney or write a proposal. And I figured be helpful to be connected with other people to, you know, share those lessons learned, as well as possibly collaborate with people on projects. So started informally connecting with other people that I know I'd left the firm, I began organizing events for people to connect in person that grew over time. So, what I'm Rex does now is on the community side and consultant facing side, we're working to create opportunities for independent consultants to connect with one another to share lessons learned. We do in person events, as well as online events almost every week. We have an online forum; we have resources for our members. And then the business model is we don't charge members, we help our clients find the right independent consultant for their projects. And when we do that, we invoice that consultant through on Brexit, we add a modest markup.
Yeah, so another word for what you do now with M. Rex is kind of a staffing firm that is surrounded by a lot of value-added services that support the independent consultants in order for them to be successful. Is that a good way to summarize it? Well?
Sure. No, sure. I think a staffing firm is the term a lot of people would use, you know, some firms in this space will call it a talent marketplace. But this staffing firm is a fine way to talk about it for the business model side, you know, separate from the community building side.
Okay, and will tell us what you see right now in terms of trends in terms of the buyers, so people who are buying consulting services, what kinds of trends are you seeing now with them?
Well, it's certainly right now, you know, as we're talking here, in late 2021, the busiest I've seen the consulting market in 20 years. I started at McKinsey in 2001. As a business analyst, the business of our senior consulting market, so definitely the demand is very high for people with the right skill set. So I'd say the typical advice for consultants is always to really define your fishing line define your value proposition, what you focus on, but right now, yeah, generalists are also in demand. Basically, if you can really create good pages if you can do Excel if you can really help you know, lead clients and your problem solving Then then you're in demand right now.
Yeah. Okay. And do you see a difference? Well in the way that corporate clients are going out to find those independent consultants.
Well, I do I see that more and more clients are becoming comfortable with the idea of using independent management consultants. And I think that's a trend that I've seen over the past 10 years. But I think it continues to accelerate, it's probably accelerated during COVID. When clients are sitting at their home, and they are engaging consultants, they start thinking to myself themselves, like, right now, let's say they're hiring McKinsey, they could hire McKinsey team, who would all be working from home, or we could hire independent consultants who would be working from home, and there's even less than the differentiation. So, I think, you know, people don't have this need necessarily, oh, we have to have a management consultant, you know, team on site at our client headquarters, we can use independent consultants, instead of a big consulting firm. So I've seen just a greater openness to using folks that are working remotely, although certainly independent consultants often travel and work on site. They're just things more openness to exploring different models.
Okay, from your perspective, as you work with the people who are buying consulting services, how do you think they make the decision? At what point? And how do they make the decision to use an external consultant versus other ways that they could potentially meet the need that I've got?
So, I think, you know, any client goes through a series of, you know, first of all, they have to decide that they have a need, right, that they have a need to get some kind of project done. And that might either be they realize that themselves or the CEO had some mandate, we need to get this thing done. Typically, clients will first think about, do we have the resources in house? Right? Do we have the people in house to do it? And if they do, then that's what they should use, right? I mean, it always makes much more sense to use your own employees to do a project, if you have people who are available, the skill set? If they don't, then companies think about, well, how am I going to get the talent, they can hire people. And obviously, that's one possible option. But in this market right now, I mean, in any market, it typically takes two to three months at a minimum to hire a professional. And right now, it might take four or five or six months. So, if you're willing to wait four or five, six months, that's a possible approach. Or you might hire a consulting firm, if it's a larger project. But certainly, you pay a lot more to hire a consulting firm than if you want to hire the exact same individuals who, the exact same skill sets. But if they just left that consulting firm, and they're now independent consultants, it's typically you're paying something like 1/3 to one half, what you'd pay if you're hiring them as a large consulting firm, I think when firms are making that trade-off being a consulting firm, but should we hire McKinsey, or Bain or BCG? Or should we hire a team of two or three McKinsey loves, or Bain alums, or BCG alums, they think, or maybe I just need one McKinsey or Bain or BCG, alum or deployed. They're thinking about the tradeoff between Do I really need that role for infrastructure behind it? Or can I supervise the team and pull it together? Because you certainly save a lot if you're willing to work with independence and build them into a team?
Yeah. Okay. And what do you see working right now really well, for independence to get the get the attention of those decision-makers?
Well, okay, so that that opens up the whole box of how do you go about and do business development? Right. So that's something that we could probably spend 10-to-15-episode series on. But the key things that I tell people about are, first of all, you want to have clarify, what is your value proposition as a consultant or as an independent professional, right? So getting clarity to yourself, first of all, what clients do you serve? And what problems do you work on? So solving that and then make all of your other communications consistent with that? So you have a clear brand message. So when people talk about you to someone else, they can say, hey, Jane, John, on whoever, you know that they know what to say about it, right? So if you're just like, Oh, I'm a generalist, I work on pharma, healthcare and financial services, and I do operations and strategy and marketing is like nothing to hang your hat on. It has nothing to hook you. So getting clarity on what you're offering is what you saw, and then having all of the other collateral around. So not just the resume, but ideally have a project list, listing out all the projects you've done in the last 10 or 20 years. Having a sample of standardized work helps a lot. Because people want to say, okay, great person looks good on paper. But do they actually have skills to produce pages still, a lot of people don't have that. Because they say, oh, every client that I've ever served, it's all confidential. Well, take one day, and just, you know, hire yourself to do some project work, and do a due diligence on some random company that you picked or put the pages together. So having a sample of work, making sure that your LinkedIn profile clearly communicates what your value proposition is. And I put together the whole kind of checklist and optimize your profile. And then you need to stay top of mind to people that already know you would like you. So most independent consultants that I talked to, particularly in their early days, most of their work is going to be coming from people that already know you and trust you and like you, right. So the trick is to remind those people that you exist, and stay top of mind. And one way to do that is by just calling people and checking in. And that's something that you can do her once or twice per year, but you can't check in every week with someone. So, if the people that are creating content on some regular basis, whether it's a podcast, or LinkedIn posts, or blog posts or something, that if you're creating some kind of content that gives you the right to then reach out to the people that know you already and say, Hey, I created this content, maybe send a newsletter. It may be posted on LinkedIn, but it gives you something to talk about. So then, you know, just you want to stay top of mind and be that first person that someone calls. Yeah,
okay, such good advice. Well, and sometimes we forget the fundamentals, I think so I appreciate you sharing your perspective on that. I think another way for people to fill their, you know, fill their capacity is through working with companies like yours through um, Rex, for example. So tell us a little bit about what you see the lessons learned are when you see consultants engaging with your organization? Sure.
So there's a number of different and we'll use the term staffing firms out there that have a business connecting clients with the right independent professionals for their project. So the first thing I'd say is, identify what are the staffing firms in your particular industry or niche that are active, and don't try to just sign up for every single one of them and spread all your energy across too large of a number of staffing firms. But rather pick maybe one or two or three that you're going to focus your efforts on. Because different firms have different approaches, some are platforms where you have to log on, and then be constantly monitoring what projects are being posted there and putting pitches or proposals against them. Others might have some other approach where they're reaching out to you to see if you're interested in available. But whichever, you don't want to spread your efforts too thin across them, right? And be focusing your efforts on firms that either are going after different kinds of talent or rates that are, you know, maybe below where you'd like to be to pick your firm's number one. Number two is do that thing that we just talked about, which is getting real clarity on your value proposition. Some people call it a fishing line, on what problems do you work on what clients deserve, and be able to articulate that in something that people can do. Number three is having all of that collateral available and ready to go. So it's super helpful to have a project list. And you might have a sanitized list or add an unsanitized list, you might have a complete list for your own cell, which is like every single project I've ever worked on the name of the client, the name of the executive with some bullet points, that allows you to respond quickly. When a firm or client asks you for some sample bullet points on a particular topic, you can look them up real quick copy and paste. It also helps having samples and plays work we talked about that helps having a bio ready to go. So having all that collateral, the next thing is respond quickly when they reach out. So if it's a platform, try to like be checking it regularly so that you can respond within a few hours of a new project being posted. Or if the staffing firm reaches out to you respond quickly. Even if your staff if your staff respond quickly and say, Hey, sorry, I'm busy right now I'm not available, you know, firms appreciate that responsiveness. And that makes them more likely to reach out to you the next time. They do it. When they firms do respond. Don't say, Oh, you already have my resume on file, right? Or you already have as I said, to use six months ago, just like go find it in your email, you want to make it as easy as possible for the staffing firm to get their stuff done. So even if you send it before, you know, who is who has an easier time finding your resume, like you, you know, finding it off your computer or the staff, maybe they're super organized, and maybe they have a great system. And maybe they can easily pull it. But why not make it easy for them by saying, Here's my resume, here's my bullet points. Here's my project list. Here's my sample, sanitize work, make it easy for that firm to, you know, help you. Next thing you can do is understand the sort of rules of engagement for that particular staffing firm. So, typically, staffing firms are going to prefer that you don't discuss these with the client, typically, although some, you know, full transparency. So just ask what's the rules around that and just be a good citizen don't, for example, try to disintermediate, the staffing firm, that doesn't not a good way to win friends, or don't try to like introduce other people you know, to that client. So understand the set of kind of ground rules that firm would like you to observe. If the staffing firm introduces you to the client, then keep the staffing firm updated. As the conversation progressed, if you get schedule interview, let them know if you have an interview, let them know how it goes, etc. You can also be a good citizen, by certainly introducing other talent to that staffing firm, if they're looking to expand the talent base in Mostar. And certainly, if you are aware of project opportunities that are not a good fit for you, then the staffing firm will probably appreciate, you know, getting those before you just hand those over, you do want to discuss, you know, if they offer a referral fee, how that structured. And you know, get those kind of details clarified ahead of time before you make the intro. So there's no kind of hard feelings afterward. And then, if you do get staffed on a project, then over the course of that project, ask the staff from how they'd like to be in the loop, someone a weekly check in some might only want to be informed if there's an issue, but just ask how they want to be informed. And then when the project's over, talk to the firm about how you and the staff together, we'll follow up with that client, you know, a month later, whatever to check in to see how it when and to see if there's any phone work.
Such a good blueprint? Well, we will summarize all of this and put it in the show notes. So all of that is laid out step by step that's, you know, really helpful. I think a lot of people have worked with staffing or are aware of staffing firms and potentially I've worked with them before, but it's those steps that you just highlighted that can make it make consultants, standouts, and it's so many easy things, right? It's all centered around communication and transparency. Really? Yeah, let's dive in a little bit. I would love to hear your perspective. On the rate side of this, this is one of the most common questions that I get from independent consultants is maybe you could talk about it a little bit generally, but then also in a staffing firm context, how rates are determined, or should be determined in working with their consulting clients? Yeah.
Well, I'd say, one piece of advice I give is find other independent consultants who have similar backgrounds to you, and find out what they charge, right. So there's basically two fundamental ways of structuring rates in the consulting world. One is by kind of time and materials, right, you know, just based on your time, and the other one is based on the value that deliver, and you could do some kind of combination of that. So if you are serving a client directly, then you have a bit more flexibility on how you structure your fees. And, you know, it may be a little bit easier to think about the, you know, structuring your feet based on the value that you're going to provide. That gets a little bit harder when you're working with a staffing from it's still possible. So some of our projects are based on daily rates, we do some projects that will be a fixed fee, based on defined scope of work, but just gets a little bit more complicated when you're trying to base something saying, Well, we're going to deliver a million dollars of value, and it's fair to charge, you know, what do you think is fair charge 10% of that. So we'll charge 10% of 1 million. So okay, these 100,000 Typically, when you're working with a staffing firm, they're going to be looking at several candidates. And so usually does come down to more of some kind of time and materials type, right? Usually, you want to know what is typical in your space. So some industries, they just think in terms of hourly rates, and there's nothing wrong with that. Some tend to think more in terms of daily rates, something about weekly rates. So management consultants, what I typically see is defaulting more towards like a daily rate. And then you're not tracking like how many hours into for lunch or whatever. But that's what I typically see. Now in terms of raising your rates over time, my own personal experience, and before I started running on Brexit was doing more of my own consulting was final strategy was start low, get as utilized as possible, and then raise my rates over time. So I had a higher utilization rate than probably average, I started at around 11 or $1,200 a day, then I raised my rates 20%, year on year, alright, for multiple years, and I was at 90 to 95% utilization for like, five, six years in a row. So I'd say, That's my strategy, because I like to be busy is, you know, price where you feel like it's at market or be maybe a little bit below market, and then get busy. And then you have clients who like you and refer you, and then raise your rate over time, the best way really to raise your rates is to be able to deliver more value. So if you are just a generic, like capable consultant, with two or three or five years of experience at some consulting firm, and you're just filling in a generic associate or senior associate reagent manager slot, you're going to be less able to command a premium than if you have a truly unique skill set. Right? So what you want to do is build up a unique skill set. So people are, you know, want you by name, they don't just want any engagement manager or any senior associate, we want. You in particular, right? Because only you have that particular knowledge and to build that kind of credibility, again, we talked about before is to create content. If a client's looking at two people, right for a project, let's say in pharma, pharma drug launches, let's just pick something random. Let's say both are former consultants from top firms. They both work in the pharma practice, they both done drug launches. But one of them has a podcast, where they've done 50 episodes, interviewing people back, how do you do a pharma drug launch? And one person hasn't? Who's more credible? Right? Who's going to be able to command a higher rate? Well, the person who has some credibility can say proof like, look, you know, here's, here's my knowledge of this, I've done 50 episodes, on this very topic. They're gonna be peer more credible, and command a higher rate.
Yeah, so good. Well, that brings up the question to me of as you work with so many independent consultants, over the course of your the last 10 or so years, tell me what you see one of the one or two ways that they're getting in their own way?
Well, I'd say, people may be a little bit reluctant to reach out and just make outbound phone calls. Right? That's one say, where sometimes people try to complexify it too much. Or they think, Oh, before I reach out to this former client, I need to be prepared to deliver some value on that phone call. And then maybe a little I have to research the industry trends. And I have to, you know, font have something interesting to say, and I have to check their latest, you know, 10k and familiarize myself and they do all this research, and they end up making like no phone calls. So it's fine to have a phone call with someone and not deliver value, just a relationship and just check in on someone. So I'd say people should do more outbound phone calls, just check in on people not asking for a project, but just saying like, hey, you know, call up you work with Jane Smith, five years ago on a project? A Jane, it's been five years, and you just came to mind, I thought I'd give you a ring and see what's new in your universe. So I would do more of that.
Keep it simple. We overcomplicate things. Yeah, absolutely. Well, for those consultants out there listening, who would like to learn more about how to work with your organization. Tell us how that works.
Sure. So independent consultants, we're always happy to connect, you can visit home brex.com, UMB, RTX, calm and just request to join the community, it's pretty obvious where to find it on the site, you're also welcome to send me a connection request. And for people that are in the process of setting up their practice, or within the first couple of years, I'm happy to give listeners of your show free access to a guide that we created. It has 90 videos, and 30 tools and templates. We normally charge $500 for it. But if folks want to contact me, I'll give them a discount code to be able to register for that. And that's that guides on the website. You're welcome to go on there and register pay for it. But if you want a discount code for your listeners, I'm happy to give them one. So just reach out to me they could send a connection request. We'll Bachman on like that.
I appreciate that. Well, thank you for offering that. You know, I've been on your websites and worked with some of your team also on some projects that we're working on. And you've created such a wealth of resources and knowledge and ongoing community for independent consultants, and it's a lonely can be a really lonely profession. So I highly recommend that you reach out to well since he offered it. And also I will mention for him too, that he has an amazing podcast called unleashed. So go check that out as well. He, how often do you release episodes? Well,
a couple times. We are on a schedule, we're about doing about two or three episodes a week. So that's unleashed how to thrive as an independent professional, and it's on all the major podcast platforms. And you can also check the episodes out on brex. Website. Calm.
Yeah, that's a great, a great resource as well, I think really complimentary to what we're doing here on this podcast. So excited to meld these all of these resources together for for independent consultants. So we'll as we wrap up here, is there anything else that you wanted to share with the independent consultant listener out there?
Now, Melisa, it's been great speaking with you. And I imagine that all of your listeners have already been to your website and checked out your icy toolkit. They haven't, I highly recommend it because I think you're putting together some fantastic resources. And I appreciate the work that you're doing about helping independent consultants really get settled and thrive in their practice.
Thank you. Well, I appreciate your time, and hopefully, we can do this again soon.