Latest / Black Girls Consult TOO! / Episode 161: The Hidden Costs That Quietly Shrink Consulting Profits

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Episode 161: The Hidden Costs That Quietly Shrink Consulting Profits · Black Girls Consult TOO!

0:00
SPEAKER_00: I have a question for you.
0:02
SPEAKER_00: Are you eating into your profit margin unnecessarily?
0:06
SPEAKER_00: Now, listen to me.
0:07
SPEAKER_00: I know that sounds like we're about to pull out a spreadsheet and calculator and come up with a lot of different numbers that are going to tell us what to do.
0:15
SPEAKER_00: And listen, I love a good spreadsheet.
0:16
SPEAKER_00: I really, really do.
0:18
SPEAKER_00: But that's not where I want to start today.
0:20
SPEAKER_00: I want to start with some of the everyday decisions we make in our consulting businesses that feel very, very small in the moment, but over time they start quietly eating away at our profit margin.
0:34
SPEAKER_00: And I'm not talking about reckless spending.
0:37
SPEAKER_00: No, we're not talking about those irresponsible purchases and things of that nature that if we're all honest, we all sometimes do.
0:44
SPEAKER_00: I'm even not talking about being out here buying every shiny new tool just because somebody on the internet says it's a game changer.
0:52
SPEAKER_00: What I'm talking about is something much more subtle.
0:56
SPEAKER_00: You know, sometimes as consultants, strategists, experts, service providers, knowledge workers, whatever we want to title ourselves, we are so focused on solving the problem in front of us that we sometimes forget to stop and ask, is this the most profitable way for us to solve this problem?
1:16
SPEAKER_00: Because really that question matters.
1:17
SPEAKER_00: It may not quite matter as much to the client, but it definitely matters to us.
1:21
SPEAKER_00: Especially if you're building your consulting business while working your nine to five, or if you're trying to create enough consistent revenue to eventually leave that job and go into entrepreneurship full-time.
1:32
SPEAKER_00: And especially if you're a solopreneur and you're trying to build something that does not require you to be overextended, underpaid, and exhausted all the time.
1:42
SPEAKER_00: Because let's be honest, revenue is cute.
1:46
SPEAKER_00: It's nice to have revenue numbers that look impressive.
1:49
SPEAKER_00: But profit?
1:50
SPEAKER_00: Now, profit is what keeps the lights on.
1:53
SPEAKER_00: You know, revenue gets celebrated.
1:55
SPEAKER_00: It's all over social media.
1:57
SPEAKER_00: Everyone posts when they hit these large revenue goals.
2:01
SPEAKER_00: But profit is what gives you options.
2:04
SPEAKER_00: So revenue can make your business look successful from the outside, but it's actually the profit that determines whether that business is actually sustainable behind the scenes.
2:14
SPEAKER_00: And too many consultants are building businesses that look good from the outside.
2:18
SPEAKER_00: But honestly, I'm trying to tell you when you get behind the scenes and you dig a little bit deeper into what they are taking home after all of their expenses are paid, the business is quietly bleeding money.
2:31
SPEAKER_00: So that, my friend, is what we're gonna talk about today.
2:33
SPEAKER_00: All right, let's get started.
2:48
SPEAKER_00: But rather than wait for a seat at the table that may never come, what if we build our own tables?
2:54
SPEAKER_00: What if we channeled our talents into guiding each other towards the success we deserve?
2:59
SPEAKER_00: Welcome to the Black Girls Consulting Podcast.
3:01
SPEAKER_00: I'm your host, Dr.
3:02
SPEAKER_00: Andrewina David, and I walked the path from healthcare consultant to a mentor for women like you.
3:08
SPEAKER_00: Ambitious, unstoppable, and ready to make waves in the consulting world.
3:13
SPEAKER_00: This podcast is your go-to spot for all native entrepreneurial consulting.
3:18
SPEAKER_00: For us as women, especially women of color, be good at your weekly coffee date with a friend who's here to dish out real talk on building a solid business, elevating your thought leadership, and mastering that all-important mindset.
3:31
SPEAKER_00: And let's not forget it, we're doing all of this while balancing day jobs, family life, and running teams.
3:38
SPEAKER_00: Yes, we can do it all.
3:40
SPEAKER_00: So if you're ready to dive into how you can grow a thriving consultancy or get strategies and insights that actually fit your busy lifestyle, then you're in the right place.
3:50
SPEAKER_00: Grab your coffee, tea, or hey, even a glass of wine.
3:53
SPEAKER_00: I won't judge.
3:54
SPEAKER_00: And let's get started.
4:03
SPEAKER_00: Hello, hello, hello.
4:04
SPEAKER_00: Welcome to the Black Girls Console 2 podcast.
4:06
SPEAKER_00: I'm your host, Dr.
4:07
SPEAKER_00: Angelina Davis, and today I want to talk about how we can start thinking about revenue and profits a lot differently.
4:16
SPEAKER_00: Because I was talking to a colleague recently, and our whole conversation was about how she was trying to launch a course.
4:25
SPEAKER_00: And so this particular course wasn't a signature course.
4:28
SPEAKER_00: I think it was going to be something that she used mainly for a lead generation uh purpose.
4:33
SPEAKER_00: So this was not her core paid offer.
4:36
SPEAKER_00: And in our conversation, she was just expressing that she felt the need to get on another platform because the platform that she had been using for her community was not sufficient, I guess, for the course.
4:51
SPEAKER_00: And there were some other things that she's moving into.
4:53
SPEAKER_00: She has a branch that's consulting and she does some other work.
4:56
SPEAKER_00: So she wanted to find another platform that will be able to offer greater capability.
5:02
SPEAKER_00: And someone had told her about one that sounded really good.
5:06
SPEAKER_00: So she was leaning into whether or not she should move forward with this investment.
5:11
SPEAKER_00: Uh, in our conversation, she was just asking me my opinion.
5:15
SPEAKER_00: And of course, I'm not one to say that another platform would not be the answer.
5:21
SPEAKER_00: Maybe that platform is a great one that she could shift into down the road.
5:25
SPEAKER_00: But one of the things that I shared, and one of the things I wanted her to think about is whether or not that new platform is needed in this moment.
5:34
SPEAKER_00: Because when you think about it, her purpose was very simple.
5:38
SPEAKER_00: She wanted people to experience her work.
5:40
SPEAKER_00: She wanted to broaden her audience and grow that.
5:43
SPEAKER_00: And she wanted to give potential clients a taste of her expertise.
5:47
SPEAKER_00: So being able to create a space where she's moving people closer to her work was the goal.
5:55
SPEAKER_00: But she was considering now another investment, another cost that was going to eat into the revenue that she was generating already in this business.
6:06
SPEAKER_00: So the question becomes if that investment is a good decision right now.
6:13
SPEAKER_00: And listen, I love a good platform like the next person.
6:16
SPEAKER_00: And this is not going to be all about platform.
6:18
SPEAKER_00: So don't worry.
6:19
SPEAKER_00: I'm just using this as a little bit of background for what we're going to be talking about.
6:22
SPEAKER_00: But I can absolutely be seduced by a clean dashboard.
6:27
SPEAKER_00: Let me tell you, if you put a very creative product in front of me, then I am sold.
6:33
SPEAKER_00: I am one of those that uh, you know, really fell in love with the book that was building a second brain.
6:40
SPEAKER_00: And I got into how I look at different tools and platforms, and I fell in love with Notion, and Notion is my thing.
6:48
SPEAKER_00: Um, I know it may not be for some, but I really do love that particular tool just because the way my mind works.
6:53
SPEAKER_00: And so I know that another platform that's similar to that that is more aesthetically pleasing, listen, I will probably jump all over it because I am a sucker for a platform, just like I'm a big sucker for journals.
7:05
SPEAKER_00: I have a probably a whole drawer of brand new journals behind me just because I think they're cute when I'm standing in line and I purchase them, and you know how that goes.
7:13
SPEAKER_00: But the one thing I can absolutely say is that a pretty client portal or a fancy automation or a tool that makes you, you know, feel like a whole operations team is hiding somewhere behind the curtain is attractive.
7:29
SPEAKER_00: And I get it.
7:30
SPEAKER_00: I know what that feels like.
7:32
SPEAKER_00: But as she was talking, I kept thinking, do we actually need this expense?
7:38
SPEAKER_00: Does she need this extra expense?
7:41
SPEAKER_00: Is this necessary right now?
7:43
SPEAKER_00: What will this cost?
7:44
SPEAKER_00: All these questions just kept running in my mind because her goal, like I said, was not to build a full-scale learning platform.
7:53
SPEAKER_00: Her goal was just to deliver a simple lead magnet, to be honest, a lead generation asset.
7:58
SPEAKER_00: So I started walking through a few alternatives with her because she hosts it inside a tool she already had.
8:05
SPEAKER_00: That makes sense, right?
8:06
SPEAKER_00: You're already paying the bill for something, you might as well use it to its full potential.
8:11
SPEAKER_00: Or could she potentially deliver it through a simple email sequence?
8:15
SPEAKER_00: That's always a possibility.
8:16
SPEAKER_00: It's not as fancy as a lot of what we have today, but does it still work?
8:20
SPEAKER_00: Do people still do it?
8:21
SPEAKER_00: Yes, they do.
8:22
SPEAKER_00: She could use a private video link and a landing page that is used more often than you know.
8:28
SPEAKER_00: There are a lot of different ways to create a simple resource hub with tools that are already included in her current tech stat.
8:36
SPEAKER_00: So once we were able to talk this through, she realized she did not need to add another monthly bill to her expenses.
8:44
SPEAKER_00: She could actually accomplish the same exact goal she set out to accomplish without adding more overhead.
8:51
SPEAKER_00: Now, that one decision may not seem like a big deal, but this is exactly the kind of decisions that matter when you're trying to build a very profitable business because every new expense, no matter how small, no matter how big, has to be paid for by the business.
9:08
SPEAKER_00: Every new tool, every new platform, every contractor, every subscription, every, you know what, is only$29 a month type of decision, all of that stuff.
9:18
SPEAKER_00: It has to be paid for.
9:19
SPEAKER_00: And what you'll realize is that all these small, tiny costs, they start to add up.
9:24
SPEAKER_00: And if you're doing a profit and loss statement and you're looking at everything that you're paying out, you'll be surprised how much that really does accumulate to over time.
9:34
SPEAKER_00: So when you're still growing, when every dollar still has a job to do, then we don't need to make it work over time.
9:42
SPEAKER_00: You know, some dollars need to help you deliver.
9:45
SPEAKER_00: Yes.
9:46
SPEAKER_00: Some need to help you market, some need to be saved, saved and invested and reinvested, I should rather say, for another time.
9:55
SPEAKER_00: So you can grow and you can advance.
9:56
SPEAKER_00: And some you have to use to pay yourself.
9:58
SPEAKER_00: So they already have a job to do.
10:02
SPEAKER_00: Please don't forget that part.
10:04
SPEAKER_00: You are not building your business just so everybody else can get paid except for you.
10:10
SPEAKER_00: And if you add on too many expenses, that's what ends up happening.
10:14
SPEAKER_00: If too many of those dollars are being eaten up by tools, contractors, subscriptions, and unnecessary delivery costs, then you may be generating revenue without actually creating financial breathing room.
10:28
SPEAKER_00: And that's how we end up stressed.
10:29
SPEAKER_00: That's how we end up stressed.
10:31
SPEAKER_00: That's how we end up overwhelmed.
10:32
SPEAKER_00: That's how we end up worrying about where our next client is going to come from.
10:36
SPEAKER_00: And we are not doing all of this work just to recreate the financial stress we're trying to escape, especially if you're in a nine of five and transitioning.
10:46
SPEAKER_00: So I want to be very, very clear that this is an issue, yes, but the issue is not the tool.
10:53
SPEAKER_00: The issue was not the platform that she wanted to invest in, or uh, you know, the work that she wanted to do with this new resource.
11:01
SPEAKER_00: The issue is not investing in your business.
11:05
SPEAKER_00: And I'm not saying you should run your business on fumes and duct tape, like never buy anything, only two things in pen and paper and a prayer.
11:14
SPEAKER_00: No, we're not talking about that.
11:15
SPEAKER_00: I'm not an extremist by any means.
11:18
SPEAKER_00: But sometimes I do believe that the issue that really needs to be solved is not being addressed.
11:25
SPEAKER_00: And often we think these added expenses are going to do the trick when they don't.
11:31
SPEAKER_00: For instance, so sometimes we may say, I need a new platform, like she did.
11:37
SPEAKER_00: I need a new tool, I have a new course, I need something to put it in.
11:41
SPEAKER_00: When really the answer is I need a simpler delivery process.
11:45
SPEAKER_00: And maybe that simpler delivery process involves use of tools I already have used and know how to do successfully.
11:54
SPEAKER_00: So therefore, the implementation part becomes super easy instead of learning something completely new.
12:00
SPEAKER_00: Sometimes we even think that we need to hire somebody.
12:02
SPEAKER_00: We need to get another contractor because maybe we need someone to do some ghostwriting or video editing or whatever it may be for us and we don't have time to do that.
12:12
SPEAKER_00: Now, I do believe in investing in help when you need it in order to protect your time.
12:17
SPEAKER_00: But there are also some times where we don't need those things, where really what we need to do is stop including things that require so much help in the first place.
12:28
SPEAKER_00: Oftentimes we may think that, you know what, I need more support, I need more help, I need someone else to partner with me.
12:34
SPEAKER_00: So maybe me and another consultant or strategist, we can kind of do some profit sharing so that we can handle this one client.
12:42
SPEAKER_00: When in actuality, what you really needed was clearer boundaries around the project or the scope of the work and better client communication, right?
12:52
SPEAKER_00: And a revision process that makes sense.
12:55
SPEAKER_00: So all of these things are things that we can throw money at easily.
13:01
SPEAKER_00: But the goal is not to just throw money at everything.
13:05
SPEAKER_00: The goal is honestly to figure out what problem we need to solve and do that in the most effective and efficient manner.
13:12
SPEAKER_00: Because even if you were to spend money on all these things, it does not mean in many of these cases it's going to make it better.
13:20
SPEAKER_00: Sometimes it makes it more complicated.
13:22
SPEAKER_00: Sometimes it causes you to prolong the work that you're going to do, to delay the uh results of the project or the initiative that you're working on.
13:32
SPEAKER_00: Sometimes it is just not the best decision for all involved.
13:36
SPEAKER_00: And so we have to slow down and think like business owners, not just experts.
13:41
SPEAKER_00: Because as experts, we're really, really good at figuring things out.
13:44
SPEAKER_00: We're really good at identifying where there's a gap, where we need help, and how we can fill it.
13:49
SPEAKER_00: We got that part hands down.
13:51
SPEAKER_00: That is what we do.
13:52
SPEAKER_00: We do that all the time for clients, we do it for ourselves.
13:56
SPEAKER_00: But the thing that we have to start, you know, asking more often is okay, you know what?
14:02
SPEAKER_00: I can probably do that.
14:03
SPEAKER_00: I can probably throw money at that, but is this something I need to do right now?
14:08
SPEAKER_00: Just like in that lead magnet example, does it need to be hosted somewhere else?
14:13
SPEAKER_00: Right?
14:14
SPEAKER_00: Is the question that I need to find a new platform, I need to find a new contractor, or I need to add something else to my plate, or is it that I don't need to do this at all?
14:27
SPEAKER_00: Or maybe I don't need to do it in that way.
14:30
SPEAKER_00: So that's where things start to get really, really expensive for us because we're good about protecting our money in terms of dollar and cents or we're looking at it on a sheet of paper.
14:42
SPEAKER_00: What we're often not good at is protecting our money when it's attached to other things, especially when it's attached to support and resources.
14:51
SPEAKER_00: That is one clear way that we can significantly eat into our profit margin, especially when people start hiring teams too early, when we start just committing ourselves to longer contracts that extend for months and sometimes years.
15:06
SPEAKER_00: All of those things can be a way that you are leaking profit that you're not even paying attention to.
15:13
SPEAKER_00: So, for example, a previous client of mine was tossing around the idea of bringing on another contractor to help her complete part of a client project.
15:24
SPEAKER_00: Because, you know, on the surface, that sounds reasonable.
15:26
SPEAKER_00: In those instances where she wanted to expand her services to offer more because the competitor was offering more than she could at the time.
15:34
SPEAKER_00: Now, mind you, thing I want to re want you to remember and want to reiterate is that this was not something that the client asked for.
15:41
SPEAKER_00: This is what she thought would be a bonus or another reason for the client to work with her.
15:49
SPEAKER_00: Uh, so on the surface, bringing on someone else to help you do this work sounds like the thing to do, especially when whatever they are coming in to provide is outside of your wheelhouse.
16:01
SPEAKER_00: You're bringing in someone who can do it.
16:04
SPEAKER_00: Like two minds are better than one, right?
16:06
SPEAKER_00: That's that's what you're thinking.
16:08
SPEAKER_00: And in some cases, that absolutely can be the right move.
16:12
SPEAKER_00: There are some times where we need to partner with another expert provider and we need to work together in order to serve the client at a higher capacity.
16:21
SPEAKER_00: Now, I'm not against support by any means.
16:24
SPEAKER_00: I always like to reiterate that because I don't want you to think that I'm trying to push the idea that being a solopreneur or having a small firm means that you can never expand.
16:35
SPEAKER_00: Many of us want to get to the point where we can manage and have team and we can do all these other things with other contractors and other groups and whatnot.
16:46
SPEAKER_00: However, before we take those leaps, we need to think about what that would mean in the long term.
16:52
SPEAKER_00: I always go back to the person who hires or brings on a team and support before they can actually fund them for an extended period of time.
17:01
SPEAKER_00: It sounds nice initially until you have to tell that contractor three months or six months later that you don't need them anymore when they were expecting that agreement or that partnership to be there for a year, two or three.
17:15
SPEAKER_00: That is huge for them.
17:17
SPEAKER_00: That can totally disrupt someone's life.
17:19
SPEAKER_00: So it's not just about getting help and getting support, it's about honoring those that are going to support us.
17:27
SPEAKER_00: So once again, I'm not against building that team.
17:30
SPEAKER_00: I'm not against bringing on that specialized help, but especially when you're trying to build, when you're trying to create the financial security that you need in the business to navigate these very difficult times where we don't know what's happening from day to day, then you need to be able to maximize your profit margin as much as possible.
17:51
SPEAKER_00: So in my client's case, one of the things that I had her think about was what are you including in the offer in the first place that makes you need help?
18:03
SPEAKER_00: Because often it's not the client that is requesting all of this additional support.
18:09
SPEAKER_00: It's the fact that we are thinking and feel like we need to add more to feel more valuable.
18:15
SPEAKER_00: So what do we do?
18:16
SPEAKER_00: We add deliverables, we add more implementation, we add more support, we add more customization, we add more access, we add more and more, more just in case extras, so that we can make our offer and our services feel valuable to the person who is paying us a premium for the services that we provide.
18:38
SPEAKER_00: So I understand it comes from a very good place.
18:43
SPEAKER_00: You're trying to do your best.
18:44
SPEAKER_00: You want to show that you can do all the things for your client that they need, but the thing is that good intentions do not automatically create a good business model.
18:59
SPEAKER_00: You can build an offer that's deeply valuable without it having unnecessary expenses.
19:05
SPEAKER_00: You can create massive transformations without doing every possible task connected to that transformation.
19:12
SPEAKER_00: You can serve at a high level without turning yourself into a one-woman consultant firm, creative agency, implementation shop, project manager, tech support desk, client currencier, and all the things under the sun, right?
19:27
SPEAKER_00: That is too much.
19:29
SPEAKER_00: It's too much.
19:31
SPEAKER_00: And for many consultants, especially for us as women and women of color, this is where it gets really tricky.
19:40
SPEAKER_00: Because so many of us, we are very used to trying to prove our value by over-delivering.
19:50
SPEAKER_00: I always talk about this as being part of corporate conditioning.
19:55
SPEAKER_00: We have been conditioned to believe that if we have a go-to person that can do all the things, wear all the hats, and save the day, that we are going to be the most valuable member of the team.
20:06
SPEAKER_00: And that's how we are going to get promotions and we're going to get awarded and all of those good things that we want to happen.
20:13
SPEAKER_00: So it is something that we have been trained to do for a very long time, depending upon how long you have been, you know, working in corporate and kind of what your background is.
20:23
SPEAKER_00: So we're used to that.
20:24
SPEAKER_00: We're used to being that person to figure everything out.
20:28
SPEAKER_00: And I know that in that setting, this was something that we did to survive.
20:33
SPEAKER_00: I did it too in corporate spaces, in academic spaces, and in other business spaces where you're working for somebody else, you had to be excellent and do all the things just to be taken seriously.
20:48
SPEAKER_00: It was something that had a place, honestly, to some extent, in those settings.
20:54
SPEAKER_00: But this is your business, babe.
20:55
SPEAKER_00: This is your business.
20:56
SPEAKER_00: And so, in your business, that same instinct that you had when you were in corporate America can actually eat your profit margin alive.
21:05
SPEAKER_00: It will eat it alive.
21:07
SPEAKER_00: Because every time you expand the scope of your project or your offer to prove your value, you may be reducing the financial strength of the business you're trying to build.
21:19
SPEAKER_00: You are not getting paid for the work that you are doing.
21:23
SPEAKER_00: You're giving too much away for free that people didn't even ask you for.
21:28
SPEAKER_00: And that, my friend, is not sustainable.
21:32
SPEAKER_00: So I want us to pause here for a second because I do know that profit can feel like a really loaded word, right?
21:41
SPEAKER_00: Especially for those of us who care really deeply about service, impact, equity, access, transformation.
21:52
SPEAKER_00: Those are things we really care about.
21:53
SPEAKER_00: We're passionate about that, myself included.
21:55
SPEAKER_00: So when we hear someone just talking about profit and revenue, that doesn't, that doesn't Sit right with us that that rubs us the wrong way, oftentimes, because it it comes off as sounding like I'm saying you need to be totally focused on making your money, making the most money that you can, and this is very uncomfortable when you are used to being someone that is very married to the idea of serving others and living out your passion and making an impact.
22:33
SPEAKER_00: But let me just say this clearly and as plainly as I possibly can.
22:39
SPEAKER_00: Profit is not greed.
22:43
SPEAKER_00: Profit is what allows your business to keep existing.
22:48
SPEAKER_00: Profit is what is going to allow you to pay yourself consistently so you can live.
22:55
SPEAKER_00: Profit is what allows you to leave your job if that's your goal, in order to make a greater impact.
23:01
SPEAKER_00: Profit is actually what allows you to hire responsibly once that makes sense.
23:07
SPEAKER_00: Profit is actually what allows you to reinvest without panicking.
23:12
SPEAKER_00: And profit is what allows you to serve from overflow instead of from depletion.
23:18
SPEAKER_00: So a business with no profit is not a noble business.
23:22
SPEAKER_00: It's actually really, really fragile.
23:25
SPEAKER_00: And the thing that we can't have are a lot of fragile businesses.
23:30
SPEAKER_00: Because when we do that, we create a scenario where we end up overworked, undervalued, and exhausted.
23:37
SPEAKER_00: And that is not the goal.
23:39
SPEAKER_00: We really do need the margin there for us to be sustainable.
23:45
SPEAKER_00: So when you're considering a new expense, whatever it may be, whether or not you're looking at a VA or you're trying to determine whether or not you need to invest in this new email platform or a project management tool or uh working with some other contractor for another purpose, hiring a marketer, whatever it may be, whatever you are about to spend money on.
24:08
SPEAKER_00: I want you to start thinking about things a little bit differently.
24:13
SPEAKER_00: And here are a few very simple questions that you can ask.
24:18
SPEAKER_00: One is what is actually required to create the result?
24:23
SPEAKER_00: Not what would be nice, not what would look impressive, not what would make you feel more official, not what someone told you that you needed to do, but literally what is required?
24:34
SPEAKER_00: And if, let's say, for instance, with our initial example of the course being used for lead generation, if what is required is for someone to access the material and experience your perspective to take the next step, then do they need to have a full platform in order to do that?
24:51
SPEAKER_00: Do they need for it to be nice and pretty and aesthetically pleasing?
24:55
SPEAKER_00: Not always.
24:56
SPEAKER_00: I mean, we want to always put out excellence.
25:00
SPEAKER_00: Like excellence is a priority.
25:02
SPEAKER_00: I'm not trying to say that's not the case.
25:04
SPEAKER_00: But think about the basics of what you're trying to accomplish and what is truly needed in order to do that.
25:11
SPEAKER_00: Here's a simple filter that I like to use.
25:13
SPEAKER_00: Now, before you add an expense to your business, ask yourself these five questions.
25:20
SPEAKER_00: And you may want to write these down.
25:21
SPEAKER_00: So go ahead, get your pen and a piece of paper.
25:24
SPEAKER_00: I really do want you to use this when you're thinking about expenses.
25:27
SPEAKER_00: So, question one is does this expense directly support the outcome I promised?
25:34
SPEAKER_00: I'm not talking about the version that can it can grow into two, three years from now.
25:40
SPEAKER_00: I'm not talking about a vibe or an aesthetic, but literally, does this expense directly support the outcome that you promised?
25:47
SPEAKER_00: What did you promise that client?
25:49
SPEAKER_00: Does it support that outcome?
25:50
SPEAKER_00: If it doesn't, you may not need it.
25:53
SPEAKER_00: All right.
25:54
SPEAKER_00: So here's question two Is there a lower cost or no cost way to accomplish the same goal?
26:03
SPEAKER_00: Now, sometimes, let's be real, the answer is going to be no.
26:06
SPEAKER_00: Sometimes you just got to pay for it.
26:08
SPEAKER_00: But many times the answer is actually yes.
26:11
SPEAKER_00: And really, the only reason why we didn't see the free or the low-cost option is because we went straight into buying mode.
26:21
SPEAKER_00: And the thing about buying mode is that your mind is going to go directly to the things that you see other people using.
26:27
SPEAKER_00: So it may be someone that has more resources than you have.
26:32
SPEAKER_00: And so you are preparing yourself to invest in a tool or a service that is far above, in terms of expense, what you need to be paying.
26:42
SPEAKER_00: So don't automatically go into that buying mode.
26:46
SPEAKER_00: Before you add a platform, look at some of the tools that you already paid for.
26:50
SPEAKER_00: Before you hire the contractor, look at the scope of the work.
26:54
SPEAKER_00: Do you really need to be expanding to that level?
26:58
SPEAKER_00: Before you begin to upgrade software, look at your workflow.
27:02
SPEAKER_00: Are there things that you can take out?
27:03
SPEAKER_00: Are there ways that you can simplify so you don't have to add additional software in order to get the job done?
27:09
SPEAKER_00: Before you create the complexity of a new system, just really think about whether or not a simple checklist or a template or an email sequence could do the job.
27:21
SPEAKER_00: The thing that we have to I think buy into is the fact that simple does not mean amateur.
27:29
SPEAKER_00: It doesn't mean starter.
27:32
SPEAKER_00: It doesn't mean uh naive or whatever you want to term it.
27:36
SPEAKER_00: Simple is often the most profitable way to do it.
27:40
SPEAKER_00: And that profitability is going to make you successful in the long run.
27:45
SPEAKER_00: So simplicity is your friend.
27:49
SPEAKER_00: Now, question three.
27:51
SPEAKER_00: Am I adding this because the business needs it or because I feel insecure?
27:57
SPEAKER_00: Ew, that one right there.
27:58
SPEAKER_00: Listen.
28:00
SPEAKER_00: That's a hard one.
28:02
SPEAKER_00: Because I ask myself, like I said, these are questions I ask myself.
28:04
SPEAKER_00: I ask myself this question.
28:06
SPEAKER_00: And sometimes I need to have a come to Jesus moment with myself and just say, you know what?
28:10
SPEAKER_00: You don't even need that.
28:11
SPEAKER_00: You're trying to get that because you think it's going to show something.
28:14
SPEAKER_00: You're trying to prove something.
28:16
SPEAKER_00: And I know that this is something that many of us struggle with.
28:20
SPEAKER_00: So I hope I'm not stepping on anyone's toe.
28:23
SPEAKER_00: Well, maybe I should be stepping on it so that you can tune in.
28:26
SPEAKER_00: But sometimes we really do buy things because we think they'll make us look more legitimate, you know?
28:32
SPEAKER_00: Having a better platform is going is going to make us look more professional or a prettier client portal.
28:38
SPEAKER_00: It's going to make it seem like we have more money or more expensive tool.
28:42
SPEAKER_00: It's going to help us, you know, when we talk to our colleagues and we're having these conversations about similar tools to show that we're on that level.
28:51
SPEAKER_00: Having a bigger team is going to show everybody that we're making a lot of money.
28:55
SPEAKER_00: This is where we have to stop.
28:57
SPEAKER_00: We have to check the ego.
28:59
SPEAKER_00: And we have to really come to terms with the fact that part of why we're doing this is because we have not fully owned the value of our expertise.
29:10
SPEAKER_00: I'm I've been guilty.
29:12
SPEAKER_00: So I'm I'm not saying this like I haven't done it.
29:15
SPEAKER_00: I'm just being real.
29:18
SPEAKER_00: And oftentimes that's part of the problem.
29:22
SPEAKER_00: You don't need to look like a larger firm to deliver excellent consulting or strategy or expert-based services.
29:30
SPEAKER_00: You just need a clear promise, a strong process, excellent judgment, and to deliver results.
29:36
SPEAKER_00: So before we jump into all these other things, these trinkets and other ways to add on to make the business look bigger than it is, just remember the value is in your mind, what you think, and what you bring to the table.
29:51
SPEAKER_00: Now, question four will this expense reduce work or create more work?
29:57
SPEAKER_00: Now, whenever we reduce work, that is a cost savings because if we are executing that work, we are using our valuable time and energy in order to do that.
30:07
SPEAKER_00: That's costly and that's time that we can never get back.
30:11
SPEAKER_00: So if the expense is going to create a situation where we are reducing the amount of work that we do and it's not creating additional work, then that can actually be a benefit.
30:24
SPEAKER_00: So you are doing yourself a service.
30:27
SPEAKER_00: However, even if it creates some freedom in one area, but builds a lot of work in another, then you have to start thinking whether or not there is a benefit there.
30:40
SPEAKER_00: For instance, if you have it set up, but then you have to maintain it, you have to learn it, you have to teach your clients how to use it or teach your team how to use it, you have to integrate it, you have to pay for it every month.
30:52
SPEAKER_00: If you have to do all these things and then on top of that, get a contractor to come and uh follow up when things fall apart or not working right, I should rather say, then that may not necessarily be the best investment.
31:06
SPEAKER_00: So we have to think about whether or not this is actually a help or if it is truly a hindrance once we peel back all the layers.
31:15
SPEAKER_00: And last but not least, question five Will this make the business more sustainable?
31:22
SPEAKER_00: This is a big one.
31:24
SPEAKER_00: Will this expense help you increase capacity without reducing your quality?
31:29
SPEAKER_00: Will it help you protect your expert role?
31:32
SPEAKER_00: Will it improve the client experience in a very meaningful way so they walk away just ranting and raving about how great you were?
31:40
SPEAKER_00: Will it help you serve more clients responsibly so that you can generate more revenue?
31:47
SPEAKER_00: Will it improve your margin?
31:49
SPEAKER_00: Is it gonna make it less expensive for you to uh carry out the work that you do?
31:54
SPEAKER_00: Is it gonna give you breathing room?
31:56
SPEAKER_00: So all of these things are worth analyzing and determining before you decide to make that investment.
32:04
SPEAKER_00: Those five questions, I want you to think about them, work through them.
32:09
SPEAKER_00: They're not long and drawn out, it's just a matter of you being honest with yourself, looking at the process and really answering those questions to determine is this a benefit for me right now in this particular moment?
32:20
SPEAKER_00: Don't think about future because a lot of times we get into, you know, this is gonna be something that's gonna help me down the road.
32:26
SPEAKER_00: I don't need it right now, but you know what?
32:28
SPEAKER_00: In a couple of years, when I do XYZ, I'm gonna need it then.
32:31
SPEAKER_00: Nope.
32:32
SPEAKER_00: Then a couple of years from now, you'll you'll explore the option again.
32:37
SPEAKER_00: But right now, we're focused on what we need to do in the moment in order to uh carry our business to the next level and to complete those services so that we can maximize the profits that we are creating and bringing in.
32:51
SPEAKER_00: So I know we talked about a lot, and you're probably thinking, okay, I have these questions written down, but what do I do with them?
32:59
SPEAKER_00: Do I just sit them to the side?
33:01
SPEAKER_00: And every time I think about making a purchase, you want me to run through this and some type of journal exercise?
33:06
SPEAKER_00: No, I do want you to use the questions, but you can actually practically put this in place this week.
33:11
SPEAKER_00: Just do an audit.
33:13
SPEAKER_00: This week, look at your business expenses and sort them into three categories.
33:19
SPEAKER_00: Category one is gonna be your essentials.
33:21
SPEAKER_00: So these are all the expenses that directly help you deliver, sell, or operate the business.
33:28
SPEAKER_00: I want you to keep those.
33:29
SPEAKER_00: Those are the expenses that you need.
33:32
SPEAKER_00: That category is essential.
33:35
SPEAKER_00: Now, category two, once you write all this down, category two is going to be useful, but not yet necessary.
33:42
SPEAKER_00: So these may be, you know, good tools or services, but they're not essential for your current stage or the stage that you're in.
33:50
SPEAKER_00: Uh, these are the ones to question because you may not need to cancel them forever, but you may need to pause them and you can pause services, just FYI.
34:00
SPEAKER_00: Usually most pauses last about two to three months, but you can pause them to determine whether or not you want to continue with that subscription or continue with that service.
34:10
SPEAKER_00: So think about those things.
34:12
SPEAKER_00: You don't have to cancel them forever, but it may be helpful for you to put them on pause right now.
34:17
SPEAKER_00: And then category three are true margin leaks.
34:22
SPEAKER_00: So these are expenses that are not producing enough value to justify the cost.
34:28
SPEAKER_00: These are the tools that you barely use.
34:31
SPEAKER_00: And a hint on that is that if you cannot remember the password, nine times out of 10, you have not logged in in a long time.
34:38
SPEAKER_00: So let's be real.
34:40
SPEAKER_00: Tools you barely use.
34:42
SPEAKER_00: Uh, the contractors that are doing work that should not be in the offer.
34:47
SPEAKER_00: So, once again, this is going back, looking at what you offer and simplifying that, streamlining that, and determining whether or not you truly need to bring on this added help for something that is not a make or break in the services that you provide.
35:02
SPEAKER_00: Now, once you look at platforms that duplicate what another tool already does, many of these platforms are very, very similar.
35:09
SPEAKER_00: They each will have uh a feature that is going to be different and unique to that particular product, but it doesn't mean that you need it.
35:19
SPEAKER_00: So if you're not using that feature, you don't need it, you don't need duplicates.
35:25
SPEAKER_00: And this is something I had to do.
35:26
SPEAKER_00: I had to sit down and go through subscriptions and just say, you know what?
35:29
SPEAKER_00: You don't need two ways to edit your podcast.
35:34
SPEAKER_00: You don't need two.
35:35
SPEAKER_00: You just pick one and you use that.
35:36
SPEAKER_00: And when you're looking at subscriptions, you signed up for, do you use it?
35:41
SPEAKER_00: Or have you completely forgotten about it after the launch?
35:44
SPEAKER_00: I am guilty of this.
35:45
SPEAKER_00: I actually signed up for a particular subscription that was focused on marketing.
35:50
SPEAKER_00: And I think the cost is only like or was only like$7 a month.
35:54
SPEAKER_00: So in my mind, I'm like, oh, that's nothing.
35:56
SPEAKER_00: I can sign up for that.
35:57
SPEAKER_00: And then after a while, I realized I hadn't used it.
36:00
SPEAKER_00: I hadn't used it in like a year.
36:01
SPEAKER_00: So even if you don't use, let's just say 10 months for easy math, that's$70.
36:06
SPEAKER_00: I just threw out the window.
36:07
SPEAKER_00: So this stuff adds up.
36:09
SPEAKER_00: And I know everything is not as inexpensive as$7.
36:12
SPEAKER_00: Most of it is going to be$29,$39.
36:15
SPEAKER_00: I had an Adobe subscription.
36:17
SPEAKER_00: This is getting into software that I had gotten on a discount somehow.
36:22
SPEAKER_00: And I think it was like maybe$39 a month.
36:24
SPEAKER_00: And then I realized it when it was$69 a month, and I had been paying for two years.
36:32
SPEAKER_00: Two years at$69 a month.
36:34
SPEAKER_00: Well,$69 a month for at least a year,$39 for the previous year.
36:38
SPEAKER_00: That's crazy.
36:40
SPEAKER_00: Why?
36:41
SPEAKER_00: Because I was not paying attention to subscriptions.
36:45
SPEAKER_00: So these are lessons I have learned, and I'm just sharing them with you because I know how much money it has saved me.
36:52
SPEAKER_00: And in this day and age, it's really important for us to just really think about where our money is going and being smart so that we do have the flexibility and the freedom to invest in those things that we truly, truly want.
37:04
SPEAKER_00: And it's not a big deal because we are cutting back uh the waste that we typically would experience uh day to day.
37:12
SPEAKER_00: We are not building businesses that just generate revenue.
37:17
SPEAKER_00: We really care about margin because it matters.
37:22
SPEAKER_00: Your model matters, your energy matters, your sustainability matters.
37:27
SPEAKER_00: And friend, I want you to build a business that's not bloated and overwhelming, one that just will weigh you down.
37:36
SPEAKER_00: I honestly want you to build one that's very focused, very profitable because that's the goal.
37:41
SPEAKER_00: In order to have more women, especially women of color as consultants succeeding, thriving in building sustainable businesses, we have to protect our profit.
37:53
SPEAKER_00: And that is something that I want us to focus on and lean into.
37:56
SPEAKER_00: So, all that little stuff that we're wasting money on and these expenses and this overhead that we're building, we want to get rid of the bloat.
38:05
SPEAKER_00: We want to get rid of all of those things that are not adding to our business and the outcomes that we're trying to generate.
38:12
SPEAKER_00: And that, my friend, is going to just really shift you into a new space where you don't feel as overwhelmed every time you look at a profit and loss statement or you open up uh, you know, your spreadsheet or whatever you do your calculations in, it is going to look different because you're taking the time to peel back the layers, go up under the hood, and just really evaluate what you need to be spending your money on, what you need to be investing in, and how you need to be developing your offer so that you're delivering them in a very streamlined and simple way that does not have extensive overhead that is very hard to manage and carry.
38:51
SPEAKER_00: All right, guys.
38:52
SPEAKER_00: I hope this helps.
38:53
SPEAKER_00: If you have a friend who is in the industry, is a consultant, strategist, uh, coach, knowledge worker, entrepreneur, whatever we want to call ourselves nowadays, please share this episode with them.
39:06
SPEAKER_00: I'm hoping that it was helpful to you.
39:08
SPEAKER_00: I'm hoping that it will be helpful for them.
39:09
SPEAKER_00: And then also it will help us to grow this audience and expand this work.
39:14
SPEAKER_00: Uh, and if you ever want to go deeper into building a consulting business that is positioned to be profitable and sustainable, this is the work that we do.
39:24
SPEAKER_00: This is the work that I do with clients to make sure you are going to be that consultant, that firm, that business that not just survives but actually thrives no matter what is going on in the economy.
39:38
SPEAKER_00: So reach out to me on Instagram or LinkedIn, just send me a DM and let's connect.
39:45
SPEAKER_00: Because we're not here to build businesses that recreate burnout with just a prettier logo and our name as CEO.
39:52
SPEAKER_00: We're actually building something a lot better.
39:54
SPEAKER_00: I honestly believe that.
39:55
SPEAKER_00: And you know what?
39:56
SPEAKER_00: I'm rooting for you.
39:57
SPEAKER_00: So until next time, take care.
40:00
SPEAKER_00: Thank you for tuning in to the Black Girls Council 2 podcast.
40:04
SPEAKER_00: If you enjoyed today's episode, be sure to leave your review on Apple Podcasts, subscribe, and share it with a friend.
40:11
SPEAKER_00: We're on a mission to increase the success and longevity of women in consulting.
40:16
SPEAKER_00: And you can help us do just that.
40:18
SPEAKER_00: Also, I'd love to hear from you.
40:20
SPEAKER_00: So let's be mad at Dr.
40:21
SPEAKER_00: Angelina Davis on Instagram or LinkedIn.
40:24
SPEAKER_00: And don't forget to visit Excel at consulting.com for more information to support your consulting journey.
40:31
SPEAKER_00: Until next time, keep breaking glass delete.
40:34
SPEAKER_00: Hi, together.