Consulting Insights: Metrics Your Consulting Business Should Measure

Consulting businesses have a unique business model that brings with it a multitude of metrics that can be helpful to measure. It’s easy to get bogged down in numbers and percentages and feel like you don’t even know where to begin or what areas need your attention. These five metrics just might be some of the most important, so start by measuring these to get a hold of the overall effectiveness of your business.

Magic Number

Once you set revenue goals, it’s essential to calculate your magic number. This is essentially the number of clients you need to connect with to reach your goals. This number will look different depending on your average revenue per project, the goals you’re trying to reach, and your outreach process. Once you know these things, you can establish how many new outreach conversations you need to start to keep your business growing towards its goals.

Sales Call Conversion Percentage

This is an important metric to consider in conjunction with your magic number. Marketing to and winning new clients can be expensive–you should keep track of your sales call conversion percentage to evaluate the effectiveness of your outreach efforts. If this percentage is looking low, it might be time to rethink some of your marketing techniques or reevaluate your target audience, as ineffective marketing is an expensive shortcoming.

Offers Sent and Accepted

How many proposals have you sent out to prospective clients, and how many were successful? This is another critical metric to keep an eye on. If you’re sending out tons of proposals but not securing many projects, that could signal issues in many areas, from pricing to proposal presentation. Make sure you’re offering competitive yet profitable proposals and clearly explaining what your company has to offer.

Project Profit Margin

How much money are you making, on average, per project? Many businesses focus on overall gross income, but studying per-project income is a valuable metric to look at as well. Projects can get expensive quickly, so it’s essential to watch your expenses and make sure your projects are still profitable. Many big firms strive for a profit margin of at least 35%.