Every organization wishes to save costs, be it through overhead or otherwise. Cost-saving is beneficial, and it indirectly helps organizations increase their profits. As they say – every penny saved is a penny earned. The following three tips are directed toward small as well as large management consultant businesses. These tips apply to you whether you run a one-man show or have an established setup of several employees.
Invest in professional liability insurance for your management consultancy
One of the most important investments the owner of any management consultancy business can make is in professional liability insurance for management consultants’. The nature of a consultancy job is such that it involves big risks and severe implications. Your management consulting business oversees helping other businesses succeed. When things don’t turn out as planned, your clients’ businesses could suffer. This, in turn, could lead to high litigation costs that can drain your resources and ruin your business’ reputation. Professional liability insurance will protect you against negligence, omissions, or error in judgment on your part.
If you have personal assets, they could be taken away from you to settle a case filed against you or your business. Professional liability insurance will cover costs related to settlement fees, allowing you to hold on to your assets.
Clients often insist that you have professional liability insurance before they can do business with your management consultancy. By purchasing professional liability insurance, you may increase your chances of bagging new clients.
Save costs by making wise investments
The ‘wise investments’ referred to are expenditures that are made to establish your management consultant business.
If you run a one-man show, you can save money by working out of a home-based office. While you may be tempted to invest in office space to impress your clients, the nature of your business requires you to travel to your clients’ offices. You can hold off on this investment until you are well-established, ready to expand, and/or are ready to take on employees.
If your management consultants’ business has several employees, invest in office space that takes care of you and your employees’ requirements. You can still save money by not investing in expensive real estate. It is more important that you keep an eye out for office space that is situated close to your clients.
Again, don’t be tempted into buying expensive furniture if you are running a small organization. With clients insisting on you meeting them at their place of work, you will end up being the only one enjoying the furniture. However, you can purchase some nice furniture in second-hand furniture stores. These stores sell furniture with reasonable discounts. You can also exchange your existing furniture with new furniture and get a discount on the exchange.
As a business consultant, you will be expected to come across as professional. So, yes, you will need to invest in impressive stationery such as letterheads and business cards. If you plan in advance, you can ensure you get what you are looking for by buying all your stationery from a wholesale dealer. When you buy your stationery in bulk, you will get additional discounts. Promise the dealer that you will be a loyal customer and you will probably get a bit more of a discount. However, be sure of what you want – the quality and quantity – before making a purchase, or you would have invested in stationery that you will end up not using.
Challenge yourself and your employees to think differently about money
Most people tend to treat personal expenses differently than a business expense. In that, personal expenses are scrutinized and are made only when required. Business expenses are seldom given a second thought. It’s easy for employees to credit everything to the business credit card. Take away the credit cards and set new rules for management (including yourself) and employees to spend their own money. You will find that expenses will come down when you and your employees think twice about making a purchase. This includes travel costs. For business meetings, choose teleconferences over face-to-face meetings. You will save on travel, accommodation, and food costs.
You shouldn’t have to choose between cutting down costs and maintaining a healthy workforce. Real cost transformation is simplifying, refocusing, and strengthening your management consultants’ business. By doing this, you will be able to maintain a strong consultancy.