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This question has been answered, and points have been awarded.
Starting A Marketing Consulting Firm-have Question
Posted by Anonymous on
6/7/2007 at 1:27 PM ET
I'm new here and would appreciate your help.
I am on the cusp of starting a marketing/advertising consulting firm with specialties in mortgage lead development for mortgage brokers as well as a reseller of marketing fulfillment (call center resale, web solution resale and direct mail resale) My questions are:
1. I'm financing the effort myself. Do I really need a comprehensive business plan?
2. What fee do I charge for consultative services? Hourly, retainer?
3. Can I market my consulting over the phone and on the internet--I won't have time to go door-to-door
4. Is it legal and ethical to charge front & back fees? i.e. I consult and develop a plan for a firm and charge $125/hr to evaluate their situation and draft a proposal, then, I fulfill their needs with a web solution, call center plan, and direct mail campaign. Can I receive revenue from the web solution, call center and direct mail subcontractors when I commission their services for the plan?
5. In what order do I launch the business? Business plan, budget, registering with the state, forming an LLC, retaining a CPA, etc...
6. Which business start-up resources do you recommend?
Your responses & insights are greatly appreciated
6/7/2007 at 1:41 PM
I'll try to answer some of your questions. I recently started a business for my husband. The business plan and budgeted cash flow was crucial. Most banks will not speak to you without it. The business incorporation is easy as pie. Hire legal council or use any other service. Consult with a CPA and use a software program to get your books going. Most CPA's can take over your software program books when it's too much for you to handle. Make sure you keep your expenses down as much as possible in the beginning. The key is cashflow.
My ft gig is in direct marketing in financial services. I'm not sure of the legality, but what most I would want is if you are going to make money on the leads, I would not pay you to consult. Or, I would be comfortable with you consulting and helping me setup and get the program successful. But, I would want you to teach me the keys to success along the way.
Payment depends on the company and individual's comfort level with your services. The Company will likely negotiate.
6/7/2007 at 1:53 PM
One of the primary goals of a business plan is to answer your other 5 questions... so I would definitely recommend writing one as your first step. The business plan includes plans for financing your business, marketing it, how to charge fees, etc. There are lots of examples and instructional tools available on the Small Business Administration website.
6/7/2007 at 2:03 PM
I wouldn't do a business without a business plan or marketing strategy. Otherwise, it's just you against the world, and you don't know who they are, or their capabilities. You must understand your markets and competitors.
BizPlan - YES.
2. Fees: How do you want to charge. With my clients, some prefer monthly retainer; some prefer hourly. My job is to satisfy my client.
3. You will learn which is best by development of your bisPlan and marketing strategies. However, if you believe that telephone and internet are going to build your empire without going out the door and networking face to face, you will have a shock coming to you. If you build it, they will not come. You will not get referrals from people you do not know. You MUST get out and circulate yourself.
I have not created collateral material (brochures) for my firm. I have been doing this for 35 years and have never created a brochure for my firm. One on one is how business is done in the consulting field. Selectivity of the clients and you, in creating the right match and solutions.
4. You need to create a business that does something well. If all you're doing is trying to drive business to your call center, then be a call center. If you are truly a marketing consultant, then consult and provide your clients with a program that will work for them. It may not be a fulfillment issue. It may be the creation of a global strategy that enables your client to create a distribution network.
Decide which business you're in. It will become painfully clear to your clients that your goal is to drive business to yourself by suggesting that they use your call center, your mailing center...etc. It isn't about you...it's about them.
However, IF...after your audit, it is determined that this type of fulfillment is exactly their need, you may suggest it. But, if it isn't...it isn't.
Are you a marketing consultant/agency, or are you a fulfillment house and call center?
6/7/2007 at 2:29 PM
As a free lance telemarketing guy, I would agree with Randall and suggest NOT counting on generating leads for this service by phone. Generally speaking, unique or highly unusual and specific B2B offerings can be effectively introduced by phone, while more "standard" offerings (such as outsourced marketing) are, in my opinion, better sold in person, through personal relationships and networking.
6/7/2007 at 5:16 PM
Thanks for the additional info. Here's my opinion. I haven't worked with many marketing consultants before, but I've outsourced a lot of event planning, and this is what I'd expect as a client.
1- As a client, I would probably prefer to pay per project. Ie, give me a proposal for the whole project and tell me what it will cost. However, it's nice to have all the options.
2- I think you should include a line item for the vendor price in your proposal. You could either do all the billing yourself (and list, say, a 5-10% markup for doing the billing), or have the vendor bill the client directly. The client should have the option.
3 & 4- I would not want to work with a consultant who's getting a referral fee from a particular vendor, because I would never trust that he's recommending the right vendor. If it's the case that ALL vendors will give you a referral fee (ie, you have no incentive to choose one over another), you should list that as a line item discount in the proposal. So you charge the client whatever fee you want, but include the vendor referral fee as a discount back to the client. That way, you're being totally honest, the client feels like they're getting something back from you, and you still have the freedom to charge whatever you want.
6/7/2007 at 8:56 PM
1. I would charge on monthly basis, developed by number of hours to assist the client to achieve their product launch. I would also charge them for creative/artistic development and printing services.
2. I would not take my company into the fulfillment arena. Introduce the vendors to the client. Should you do the other, and the client is called upon by competiting vendors w/direct pricing, you stand to not only lose a client, but shoot yourself in the foot, as well.
3. Answered above. Get your consulting fees plus expenses and creative. Your client will appreciate the value you have provided.
4. Q1: Yes, absolutely.
Q2: If you negotiate with vendor, as marketing consultant, and continue to work with them, you may create an opportunity for additional referral business, as well as please your client with special pricing.
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