The consulting industry is growing rapidly. Thousands of individuals are leveraging their expertise to work for consulting firms or start their own consulting business. With a total value of around $250 billion annually, the global consulting sector is one of the largest and fastest-growing markets within the professional services industry.
With that much money being spent on consultants, one might assume that most consultants are earning significant personal incomes. But according to Payscale, the average consultant in the United States earn $75,000 per year.
While this income might be enough for an individual to live a relatively comfortable lifestyle in North America, there are many consultants whose goals extend far beyond simply earning enough to cover their personal expenses. Many consultants (and entrepreneurs in general) want to build a scalable business – one that creates jobs for others and serves hundreds or even thousands of clients in the process.
To learn how to scale a consulting business, I decided to search for mentors that have already accomplished this. My search led me to Taylor Welch and Chris Evans, the Co-Founders of Traffic And Funnels – a training and consulting company that helps consultants and service providers grow client businesses.
Impressively, Traffic And Funnels has grown from a small startup in 2015 to more than 30 employees and 8-figures in annual revenue in less than 4 years, helping thousands of clients via their online training and mentorship programs in the process.
In a recent interview with Taylor Welch, I asked him to share the strategies that contributed to the growth of his company. Here are 8 lessons he shared with me that helped him scale Traffic And Funnels to over $1 million in monthly revenue:
1. Create an offer that commands a premium price
When you first start building a consulting business, you have to start by establishing a strong foundation. This means honing in on your value proposition and getting over mental hurdles that prevent you from charging premium prices for your services. “You have to figure out what value you can offer people in exchange for money,” Taylor says.
Figuring out your value proposition is an important part of overcoming some of the internal challenges that come with setting big income goals. “You have to deal with all of the mental turbulence of feeling guilty for wanting a lot of money, and all of the baggage that comes with it,” Taylor says. “If you think you wouldn’t feel guilty for having money, look at your goals: they’re probably really low, and they’re probably low because if you set a big goal, you feel weird. That’s all mental.”
Once you get comfortable with charging a premium price for your consulting offer, you don’t even need that many clients to generate a significant income. For example, if you start working with clients that pay $8,000 for your services, you can make $1 million annually by enrolling 10 new clients per month at that price point.
2. Develop consistent, predictable revenue
Once Taylor and business partner had built their foundation and reached approximately $100,000 in revenue per month, they hit their first challenge: keeping their income consistent. “We were having difficulty maintaining that batting average, and things would bounce around,” Taylor says. “We would have a month where we would do $180,000 in sales, and then we would do $75,000 the following month.”
For Taylor, not understanding what was causing those peaks and valleys in the company’s revenue was extremely frustrating. The key to overcoming this inconsistency was paid advertising. Introducing paid advertising into their lead generation strategy helped them to control their ability to generate (and increase) their monthly revenue.
3. Multiple revenue streams are a distraction (at first)
Another approach that helped them increase their revenue, and keep it from fluctuating, was getting laser-focused on the products they wanted to provide to their clients. Often, businesses will start rolling out multiple products — newsletters, videos, courses, e-books — in an attempt to diversify their income and generate new leads. According to Taylor, that’s not always the right approach. “It’s not just about the things we did,” Taylor says, “it was also about us not doing all the other things that people do, like starting a course.”
Once Traffic and Funnels introduced paid traffic and enjoyed two to three months of a steady $100,000 monthly revenue, they decided to start a newsletter subscription selling at $79 a month. But while the newsletter did sell, adding it introduced unintended consequences. “We got distracted,” Taylor says. “It was cannibalizing the main business because our focus was split.”
After choosing to quit the newsletter, and keep their efforts focused on their main business, they were able to grow their revenue to a consistent $400,000 a month (with some months going beyond $500,000).
4. Grow and develop your team
The jump from making $400,000 to $550,000 a month, according to Taylor, was the most difficult barrier in growing a multimillion-dollar consulting business. At that point, their problem shifted from one of achieving consistency to one of capacity — a challenge that was solved by hiring new employees.
“Our program cost $10,000, and we had back-end campaigns on top of that,” Taylor explains. “We had about 30 clients in a month. How do you get all those people results when it’s just you, and then things are breaking and clients are asking for refunds? You’ll get ripped apart if you don’t have people on the team who can help you grow.”
Once you’ve hired employees, learning to manage them and become a leader is important. “We kind of learned by doing everything wrong,” Taylor admits — but says the secret to actually getting better is reflecting and keeping track of what you learn.
Growing and managing a team isn’t about avoiding mistakes entirely — but about owning up to them, learning from them, and continuously improving as a manager and leader. “I may make all of the mistakes in the book in the month of June, but I won’t repeat any of them in July, because they’re documented,” Taylor says.
5. Deviate from traditional business models when necessary
Following team growth, the next stage in Traffic and Funnels’ evolution came from changing its business model — a switch that took the company’s revenue from $550,000 to $1 million per month in early 2019.
“Most people have a front-end and a back-end in their business, but we deviated from the traditional high-ticket business,” Taylor says. “We now have a top-of-funnel, middle-of-funnel, and bottom-of-funnel.”
Moving to this model means offering clients services on different rungs. At the top of the funnel lie “low ticket” products that can be priced at anything from $7 to $500, but are widely available to anyone. Offers in the middle are consultative and generally are priced at $10,000 or more. Their most expensive programs start at $24,000 per year.
This kind of model works well for Traffic and Funnels, considering that Taylor’s expertise lies in product and content creation and consulting, while Chris’ strengths are more in higher-level strategy. This division of experience and expertise makes it easy for Traffic and Funnels’ employees to tackle work at different levels of the funnel.
“I don’t think that this is something that everybody should take on right now,” Taylor warns. “You have to figure out, as an entrepreneur, what your single greatest contribution is to the company.”
6. Know exactly where you’re allocating your money
Throughout the growth journey, it’s critical to keep an eye on where your revenue is going and how you allocate profit. Taylor and Chris have always had a pretty solid system for using their profits to grow Traffic and Funnels. Taylor breaks down exactly how they spend their $1 million in revenue each month.
Approximately $210,000 to $220,000 a month goes towards payroll, which includes revenue commissions they pay each month. “If you take everything down to net, though, we’ll try to get ourselves to a 25 to 30 percent profit margin,” Taylor says. That includes keeping at least a million dollars in cash reserves. They clean out the accounts monthly and put profits into revenue-producing assets — including real estate and other projects.
7. Actively seek out mentors
Chris and Taylor currently have one mentor — Jay Abraham — who they pay for one-on-one help and consulting. They also invest in other mentors for their staff. Taylor has an open approach to learning: he’ll mentor under anyone — regardless of the income they’re making — as long as they’re experts in an area he hasn’t mastered yet.
“It’s pretty amazing once you actually grasp the concept that you can pay money to learn from somebody else who has lost money. You can get the skills and not have to go through it,” Taylor says. “People hate on the info business, but it’s literally amazing that someone can go through a bankruptcy, recover from it, put together all of the lessons that they’ve learned, and you pay them $20,000 so you don’t have to go through what they went through. That’s awesome.”
8. Know where you’re going
Throughout the entire journey of building and scaling your business, it’s important to have a vision for where you’re going and to not let fear or self-doubt stop you from getting there. “Fear is primal and it’s wired in as something that we can’t just solve. We have to actually combat it and make decisions regardless of that fear,” Taylor says. The fear is always going to be there when you level up. The key to overcoming fear is having a clear vision of where you’re going and why that destination is important to you.
“Vision is the best driver of energy over time,” Taylor says. “When you wake up and you think of where you’re headed and you actually buy into that, you begin to become that person. Your brain begins to change. This is real science: you have new pathways that begin to move themselves around based on what you’re telling yourself every single morning.”