In the professional services field, founders start businesses because they’ve discovered a need for their expertise (i.e., a problem to solve) and they’re great at providing the needed service. However, this doesn’t always translate to being good at building and growing a company.
Business growth requires a distinct set of skills. Importantly, it also requires effort and intention. In the initial stages, companies grow by leveraging their network and client referrals. But, when it’s time to scale, they don’t know where to start.
Challenges
Lack of capacity for growth strategy
Founders wear a lot of hats. They are involved in sales, operations, hiring, finance, and marketing. They send invoices, attend conferences, interview job candidates, build strategy, seek out prospects, negotiate scope, innovate their service offerings, respond to fires, cover for staff, and engage with customers on a billable basis.
They’ve grown the company by staying involved in the details, and they like the level of control. But when it comes time to think about growing the business, being too in the details of the day-to-day hinders them from effectively building and executing on a growth strategy. They don’t have the time or mental space to set up systems, measurements, and tools that lead to scalability. An effective growth strategy requires that leaders get feedback and review data to ensure that the growth strategy is working.
Scattered growth tactics
Sometimes leaders without unified growth strategies will put several different growth tactics into play, without investing the time and energy to review performance and see what’s working. When initiatives fall short, the blame may be placed on the economy, the time of year, or bad luck.
As we mentioned earlier, leaders at this stage are often overloaded with tasks and simply don’t have the time to measure their initiatives, set up systems, or define KPI’s in their growth strategy. Even when they do review how things are going, they rely on anecdotal evidence and make assumptions based on a single prospect or initiative.
Cost of a growth leader
A full-time growth leader is a significant investment for a small company. Hiring a growth leader might feel like a necessary step in scaling the company, but the company can’t afford to hire the right person for the job. Experienced growth leaders are expensive and often demand equity and an inexperienced leader may ultimately delay growth.
If a company does take the leap and hire a growth leader, that is only half of the solution. They’ll need other skill sets on the team, ranging from graphic design and copywriting to Revops, to software implementation and customization, to sales, to negotiation.
Uncertainty in strategy
There are endless options for growth tactics, and it can be daunting to decide which to activate. Should the website be refreshed? What about the sales and marketing tech behind the scenes, are those up to par? Develop a content strategy for blogs and social media? How much to pursue organic traffic? What about incentivizing partners to sell for you?
It’s impossible to know what might work best without data and trying multiple tactics can be costly. What works in one industry (e.g., software) may not work in professional services. Burdened by uncertainty and overwhelm, new leaders often default to what they’ve done previously because they have experience with it, not necessarily because it’s the right thing to do.
Lack of customer-centricity
A growing professional service firm often doesn’t take time to consider the customer experience. The focus tends to be on results and sales performance instead of how the client feels throughout the process. However, a focus on customer-centricity can make all the difference in keeping clients happy and engaged.
Why does it matter? Because professional services is a highly competitive industry. A client’s positive experience and relationship with staff is what keeps them coming back. It leads to referrals and better results. Being intentional about customer centricity sets firms apart from others and establishes them as a strategic partner that provides a superior experience.
Lack of a customer journey
Professional services businesses rely on their relationships with their customers. Usually, when a customer comes on board, the company creates a custom project with a scope that meets the customer’s specific needs—and rightly so. Therefore, professional services work is often project-based (i.e., $x for a specific scope completed) or managed service (i.e., $y for tasks a, b, and c done weekly).
However, the customer journey usually ends there. The project is complete, and they are sent on their way. Yet, if a company is looking to grow, there needs to be an established path to the next (or added) service the business can offer.
Overworked employees
The professional services industry is unique because the product (what companies are buying) is a service provided by staff. Because employees are on the front lines of engaging with clients, it’s essential that they are not overloaded with tasks outside of their client work.
Sometimes in small businesses, top-performing staff will get pulled into the sales meetings or administrative responsibilities. This detracts from their main objective of serving the client, and, as a result, staff can get burned out and sales could suffer.
Price cutting
It is so easy, tempting, and fast to cut prices to win business and increase a prospect’s expected ROI. But once you go down, it’s hard to come back up. Lowering prices changes the perception of the service offered. Clients are getting a good deal, but it also implies that the company’s product is not as valuable. Staff get that sense too and might not be motivated to work as hard. The quality of service might drop.
Building and executing a growth strategy is not easy. Being serious about growth means someone needs to take responsibility for it on top of their day-to-day tasks. And it’s not enough just for one person to be leading growth, they also need to delegate to get tasks done. All of this can feel daunting for a small professional services agency that hasn’t considered growth before. But Sentinel Way is here to help.
Sentinel Way works with professional services companies, leading them on their growth journeys. From strategy to execution, across sales and marketing, Sentinel Way offers experience, best practices, and a culture of continuous improvement to professional services companies who are looking to grow into their chapter. Contact us to have a conversation about your growth challenges and we’ll help identify some opportunities for improvement.
