Stop and think about how you’ve structured your consulting business for a moment. Many of you are generating one stream of revenue by directly consulting with clients and sharing with them the skills and knowledge you’ve gained from your years of experience. With careful planning, you can create new revenue streams by repackaging that knowledge and offering it to a much larger audience via the Internet.
I’ll discuss how I explored and entered online publishing as another method of generating revenue for my business. I’ll use my own experience of the past 16 months as a case study to help you streamline your approach if you decide to do this yourself.
First in a series
This is the first in a series that explores using Internet-based publishing to create another revenue stream for your consulting business. Other articles will cover developing a Web site with online ordering capabilities, publishing your material, and marketing your information.
I started a traditional IT consulting business, MDE Enterprises, in November 2000, after 25 years in a corporate environment as a senior IT manager and CIO. I hoped to create a business that could continue to generate revenue even if something were to happen to me and I couldn’t work. To do that, my business model needed one or more recurring revenue generators that would work “in the background.”
I wanted a business that would allow me to provide consulting services in my areas of expertise but that wouldn’t require me to personally provide those services forever. My ideal business scenario became one that would allow me to define a product, work hard at getting it off the ground, and then sell it repeatedly over the Internet with minimal ongoing effort. I also wanted a business that required no inventory and had a reasonably high sales price with high margins. I decided to try to create a secondary revenue stream by writing and publishing materials devoted to IT management development.
MDE’s secondary revenue generator
During my years as an IT manager and CIO, I learned that there was considerable need for mentors with practical IT management experience. MDE’s complementary revenue stream is based on this knowledge.
In April 2001, I decided to write a set of 10 books titled the IT Manager Development Series. My goal was to write about the key topics that I believe are needed to be an effective IT manager. My publications range from 12 to 45 pages and are featured in PDF format on my Web site. It took me about a month to complete each publication. I’m currently looking at producing the series in paperback and publishing through Amazon, as well as other sites.
Early sales indicators are very promising and suggest that my strategy is working. In 2001, 95 percent of my revenue was generated from direct consulting time. This year, I anticipate that 50 percent of my revenue will come from consulting, with publishing comprising the other half. (My plan is to drop the consulting revenue in my business every year until consulting is extra revenue, not required revenue.)
Sales from every corner of the world also validate that I’m reaching people that I never would have otherwise. The five countries in which I make the most sales are the United Kingdom, Australia, Canada, Brazil, and Saudi Arabia.
I don’t suggest that everyone tackle such an aggressive publishing project to start with, but I recommend that you take a close look at opportunities you have to document a piece of what you know from your own consulting expertise. For me, the response has been extraordinary, especially when I consider that many people bought the entire series when only one publication was completed.
Identify and define the need
Before you can decide on your approach and begin your initiative, you must identify and define a need and a market. In my case, I identified the need for IT management improvement. Many IT managers need help because of the sheer growth of IT organizations in the past 10 years. This accelerated pace has created thousands of managers without providing mentorship or help to move individuals from technical specialists to managers.
I didn’t do a formal market analysis; I already knew my target market from my professional experience: up and coming IT managers who require advice on developing their management and assessment skills.
Other benefits of expanding your revenue streams
When you develop your first product, you’ll discover even more new ideas that complement your consulting business. Probably the biggest impact for me is in the additional marketing focus this effort has instilled in me as I try to target my consulting prospects. Another benefit I have found is that book authors are often requested for consulting engagements. I’ve made new business contacts through the sale of my publications. Just this week, for example, an IT manager has asked me for help in a “turnaround situation.” This may lead to an outside IT assessment for his company.
Be careful not to lose focus on your consulting services as your primary revenue producer. Structure your time so that you can comfortably develop materials that support your business outside of your normal workload. In my case, I developed the first several publications while working full-time in my consulting business. After I saw the revenue developing in July, I began to focus more energy on finishing the publications.
You don’t have to write a 500-page book to package and sell what you know. You will, however, have to dedicate time to developing something of high quality and substance. If you plan and execute it well, this approach may offer you an opportunity to increase your revenue from direct sales, as well as additional consulting engagements.
What I like about this approach is that it helps you reach a larger audience in your chosen profession and complements your base business model. Being published also sets you apart from your competition and adds credibility, and the secondary revenue is nice too.
Mike Sisco is President of MDE Enterprises, an IT management training and consulting company in Atlanta. For additional insight into Mike’s IT management perspective, take a look at the IT Manager Development Series.