A little respect, please? 5 myths about running a professional services business

Startups get all the glory these days. Accounting, consulting and marketing firms? Not so much.

What gives? Because, if you’ve ever been in the professional services game, you know that it’s demanding on practically every front. You’re responsible for everything, from marketing to sales to bookkeeping and legal. Not to mention constantly booking billable time!

So, let’s dispel some of the myths about being in the services business:

1. Anyone can do it

To be sure many people try to jump into services. If you leave a corporate job, there’s nothing stopping you from hanging a shingle. But that doesn’t mean you’ll be good at it.

The firms that grow and become sustainable tend to do so because the founders possess a raft of vital skills, including:

  • Credibility – required if you are going to convince a client to put their career in your hands.
  • Tenacity – what gets you through your first year
  • Soft skills – what keeps clients around for longer than one engagement
  • Perseverance – how you get through the inevitable dips

2. It’s just a lifestyle business

Sure, if you run a professional services firm, you have the *option* to maintain a nice lifestyle. Certainly freelancers and solo consultants can more easily balance work and personal pursuits.

But anyone with employees knows that the minute you take on staff, it’s not about you anymore. You’re now the leader of a squad of high-functioning professionals. And you never forget that they have other employment options. They expect you to be there for them and work as hard, if not harder, than them. Phoning it in from your beach house in Tahiti is probably not in the cards.

3. There’s no ability to innovate
Ok, it’s true that your 5-person legal firm might not be asked to invent an autonomous flying nanobot. But if you’re not innovating in the solutions you deliver, you probably won’t be in business for long. Pure innovation may not be your business, but creativity and innovation is baked into your business.

Creativity is always about finding solutions to problems *within* certain parameters. Inventors have to deal with limitations, such as physics, cost and market acceptance. Other than that, there are no limits.

As a professional service provider, your creative parameters are the realities of your client’s business, their industry, and most importantly, their budget. Other than that, there are no limits!

4. It’s a no-risk business

Imagine being on the hook for a $33k payroll every month. (That’s about what your payroll would look like if you had a firm with 5 staff each earning around $100k a year.) Only, you don’t get to dip into an investor’s pocket to make this payroll. It’s on YOU. If a big client pays you late, you’ll probably gonna be late on your mortgage. If they don’t pay you for too long, you’re out of business – probably after a couple months of you raiding your savings to keep the ship afloat. If that doesn’t sound risky, I don’t know what does.

5. It only gets easier

Where the risk really ratchets up is when a services firm takes on the long-term overhead of a leased office space. Even though you can’t be sure the business will sustain or grow, you have to commit to 5 years of rent – often with a personal guarantee. And if you’re planning for future growth, you might lock in a larger space than you really need…just in case.

If the business fails, you’re not off the hook. The owners personally may need to pay off the full remaining amount of the lease. We won’t even get into the accompanying costs of furniture, high-speed Internet, phones and office management.

Consider this antidote to risk…

Luckily, services firms can put off the risk and overhead of leasing office space. At COCO, we’ve played host to hundreds of growing service firms including law firms, CPAs, management consultants, financial advisors, technology providers, marketing agencies, to name a few. COCO provides furnished private and semi-private office spaces, equipped with 1GB Internet, meeting rooms, high-end coffee and reception – all for a low monthly payment with no long-term commitment.

COCO West Loop

Discover how a serviced office space at COCO can help your firm reduce risk and focus on growth.

We’ll work with you to understand your needs and provide a range of solutions to help you grow, stay productive and steer clear of the #1 killer of business: overhead.

Schedule a tour of COCO Chicago in the West Loop or any of our 4 Twin Cities locations!

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