Managing Consulting Finances

2026 planning starts now. If I was the CRO of a $50M business looking to grow 30% next year (i.e. add $15M of net new ARR to end the year at $65M) here’s exactly what I’d do: ASSUMPTIONS: - Selling into SMB and Mid-Market but with a small Enterprise sales effort. - 82% Gross Revenue Retention and 95% Net Revenue Retention (NRR). - A CS team that has renewal targets but expansion is handled by the AEs. - New business team is hitting quota in total but unevenly distributed. 1. Stress Test the Targets and the Revenue Model Look at 2025 growth and compare to total investments in sales and marketing focused on new business growth to understand CAC to ARR growth. Confirm the ratios map to the budget — e.g. you’re not being asked $15M in growth on the *same* CAC investment.    Assume CAC will degrade by 10% and ensure your fully weighted S&M investment is Pro-Rata + 10% to the growth. We’re looking for rough confirmation we’re not being asked to perform miracles. 2. Stress Test Pipeline Coverage and Marketing Performance Ensure we understand Lead to Closed Won Cycle and we have coverage. If we have a 3 month sales cycle and it’s mid-September, we’re on track. But if we wait much longer we’ll be drifting into Q1 and will immediately be behind. As usual, we’re looking for 3-5x pipeline coverage. 3. Understand Demand Generation Channels Word of mouth is not (really) a channel. It’s a “channel” if you can put $ behind it and the more you spend the more you get. If we have our basic framework in place, it’s time to get out the precision tools, modeling CAC, retention, and LTV by *investable channel*. At higher ACVs, we put muscle behind in-person travel, ABM, and targeted field marketing. At lower ACVs, we need investments in data and enrichment to enable effective paid acquisition and AI-enabled inside reps. 4. Review Gross and Net Revenue Retention targets If nothing changes with NRR, we are looking at $47.5M end of year run-rate. Let’s figure out if we can push NRR up to 105%, lowering the burden on new business. How? - Segment accounts by Red, Yellow, Green - Assign commercial support to CS to expand Green through more seats, new products, or deeper usage. Take one high performing AE and turn them into an Account Management expansion focused hunter whose sole job is converting upsells. 5. Drive Our AEs with Great Variable Comp and Route Our Best Leads to Our Best People Top sellers are 5-7x more productive than average sellers. And sellers with unlimited upside and generous accelerators, do better. I'd design our comp plans to pay for over-performance and route our leads to our best people. Target 80%+ quota attainment and be willing to part with the bottom 20%.  Get confidence every lead we send to the sales team closes at a higher rate with a higher deal value. The last step? Pop bottles because we hit our number 🍾 P.S. Want to learn how to do this as a scaleup CRO? Pavilion's CRO School starts 10/2. DM me to join.

Scaling sounds great.  More clients, more revenue, maybe even a team. But if your finances are messy, growth won’t fix your problems.  It’ll multiply them. Here are a few red flags to check before you try to scale: 1. Cash flow is chaos If you’re constantly chasing invoices or stressed about bills, you don’t need more sales, you need better cash management. 2. You don’t know your key numbers What’s your profit margin? Break-even point? Monthly overheads? If you can’t answer quickly, scaling is risky. 3. Your prices are too low If your margins are thin now, growth just means doing more for less. Fix your pricing first. 4. You're approaching the VAT threshold with no plan Hit £90k+ turnover and you may need to add 20% to your prices overnight. Plan ahead. 5. You treat your business like a personal bank account Random transfers, personal spending on the business card, this is a recipe for tax trouble. 6. One client pays most of your bills If 60%+ of your revenue comes from one client, you don’t have a business, you have a risky job. 7. You’re already drowning in work If you’re burnt out now, more clients won’t help. You need better systems, not just more sales. The fix: ✅ Get your cash flow in order ✅ Review your pricing ✅ Plan for VAT ✅ Learn your numbers ✅ Separate business and personal finances Growth is good, but only if your business is ready for it. - Which of these red flags have you faced?

Consultants and contractors tend to be the first on the chopping block! With tariffs returning and political efforts to cut federal spending on corporations and institutions that support DEI, we’re already seeing early signs of tightening budgets from our small business owners. When companies look to reduce costs, one of the first expenses they look to cute are their 1099s/contractors—IT consultants, marketers, outsourced HR teams, architects, executive coaches, accounting/finance consultants even health and wellness professionals. If you run a professional services OR more broadly a service-based business service, like mine, serving B2B clients, now’s the time to anticipate the ripple effects and reposition your value. Here’s how to stay ahead, protect your revenue, and stay relevant in the eyes of your clients—industry by industry: 1. IT Services → Clients may delay digital upgrades as hardware costs rise. Focus on cloud-based solutions, automation, and cybersecurity—things they can’t afford to cut. 2. HR Services → Immigration and hiring pressures = demand for compliance and strategic support. Package your services as essential to workforce stability and stress the importance of having an expert that understands the ever-changing labor laws in each state. 3. Marketing → Clients want ROI, not pretty graphics. Emphasize measurable outcomes, reposition your services around lead generation and sales conversion. 4. Consulting/Fractional CFOs → Your clients need a calm financial navigator. Offer tariff scenario planning, cash flow strategy, and pricing model resets. 5. Architecture → Material cost spikes slow projects. Offer value-engineered design, highlight your ability to stretch their dollars. 6. Commercial Cleaning → Supplies are more expensive. Bundle value-added services (like deep cleaning or disinfection) and renegotiate long-term contracts. 🔔📌 You don’t have to panic—but you do need a plan. If you're a growth oriented business owner in one of these industries and you want to talk through how to apply this to your business, book a complementary financial consult at the link in the comments.<<<<<< #CEOLife #womenentrepreneur #womeninbusiness #financialadvice #smallbusinesstips #tariffs

Feeling drained and overwhelmed? Here’s a common blind spot: The culprit might be a few of your clients. These non-ideal clients were kept on because, at the time, it didn’t seem like a big deal. But they might be consuming more time and resources than you realize. 𝗦𝘁𝗮𝗰𝘆'𝘀 𝗦𝘁𝗼𝗿𝘆: 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻: Stacy was constantly putting out fires and making exceptions for certain clients, causing her stress and headaches. 𝗚𝗿𝗼𝘄����𝗵: On track to $800k this year, but hesitant to let some clients go. 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻: 𝗖𝗼𝗻𝗱𝘂𝗰𝘁𝗶𝗻𝗴 𝗮 𝗖𝗹𝗶𝗲𝗻𝘁 𝗔𝘂𝗱𝗶𝘁 A client audit can reveal: • How much these clients are draining your energy. • How freeing up this capacity can actually increase your revenue. 𝗥𝗲𝗮𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻: She didn't understand the true cost of retaining these non-ideal clients. Once Stacy put the data into a sheet, she saw clearly how much these clients were costing her. We helped her devise a strategy to fire these clients, replace them with better ones, and identify such clients early in the funnel. 𝗥𝗲𝘀𝘂𝗹𝘁𝘀: • 𝗠𝗼𝗿𝗲 𝗧𝗶𝗺𝗲: Stacy found more time to focus on high-value clients. • 𝗠𝗼𝗿𝗲 𝗣𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗹𝗲: Her profitability increased as she replaced draining clients with better ones. • 𝗟𝗲𝘀𝘀 𝗦𝘁𝗿𝗲𝘀𝘀: Reduced stress and more enjoyment in her work. When was the last time you did a client audit? DM for client audit  & quarterly review sheet

Doing great work for clients is a must, but it's not the end point. You prove your worth by showing your impact at each stage of the engagement. Here's how: 1. Deliver on the promise of your offerings as a starting point. Doing the work and driving the agreed-upon results is where you start. Successful consulting engagements offer "factual quality" and "interpersonal quality", meaning you need to do the work AND maintain a relationship with the client throughout in order for it to be considered a success for all parties. 2. Use your track record to illustrate the process. PR and media consultant Kylie Ora Lobell suggests referencing what worked with similar clients so it's clear how exactly you'll provide support step-by-step and what results they should expect. A signal that your costs are more than justified as you've done it before. 3. Send a weekly recap email for continued visibility. An easy, but impactful way to keep the important stakeholders aware of your wins, challenges, and where you'll need their support You want clients aware of what's happening across the project timeline, not just the end. 4. Find an immediate win of value, not just a win for the sake of it. Look for meaningful ways of delivering results for the clients in big and small ways throughout the duration of the project. Sometimes the main goal of the project won't be achieved for weeks or months. We can't wait that long. 5. Measure success by a client’s independence in addressing future challenges. Take the time to train and equip the client with skills related to the project at different points in the collaboration. When they're empowered to act on their own, and not dependent on you, that's one of the most impactful ways to make a lasting impression and really highlight how you provide undeniable value. Dive into all the details in my latest for Inc. Magazine: https://lnkd.in/ePuQXft5 🔗

“You can’t even spend my monthly budget… how will you bring results?” I’ve heard this from so many clients. When I started. When I was consulting. Even recently. But here’s the truth 👇 Spending money isn’t the job. Spending it properly is. When there’s no data, no presence, no credibility — how can you expect to exhaust the budget and get results? I once worked with an e-commerce client who had a ₹3L/month budget. But their online presence was weak: ❌ Poor website ❌ No product ratings ❌ Shaky social proof They pushed me to “spend every penny.” I ran precise campaigns. Got 1.1x ROAS. Profitability? Nil to negative. Later, they fixed the fundamentals. Improved their website. Added reviews. Built a proper social presence. When we restarted ads? The ROAS jumped to 3.7x. Same budget. Same marketer. Different foundation. That’s when I realized: Clients don’t just need an agency or consultant. They need a partner who tells them what’s missing — and how it impacts the outcome. This mindset shift changed everything for me. It built trust. It improved retention. It made me part of their team, not just a vendor. So here’s my advice 👇 Be honest. Be bold. Be trusted. (And make sure the client is equally worth working with.) 💬 Marketers, have you faced this? How do you handle clients who only look at spend? #PerformanceMarketing #GrowthStrategy #paidads #ClientTrust #MarketingTruths #clientsuccess #agencylife

Far too many Consulting firms struggle to scale beyond the influence of their Founder. They fail to build recurring revenue channels that extend beyond the Founder’s personal network and reputation. Instead of intentional growth, they operate on ad hoc improvisation—saying yes to everything, reacting to the flow of the day, and never truly designing a scalable model. The result is scattered efforts, unpredictable revenue, and a ceiling that’s impossible to break. Many Founders hesitate to hire senior experts due to their high cost, despite these individuals being best positioned to drive business growth. Even when they do bring them on board, they are often reluctant to grant equity, many Founders believe that they should retain all rewards since they created the original value. This mindset overlooks a crucial reality: securing and retaining senior talent with client relationships for the long term is what truly enhances equity value. The priority should be building a team of senior specialists with strong market reputations from day one. Paying above market rates and offering long-term equity incentives isn’t just an expense—it’s a strategic investment in credibility, accelerated growth, and early wins with high-value clients. Another defining factor is positioning. Many early-stage Consulting firms spread themselves too thin, saying yes to whatever comes their way. Sustainable growth comes from solving a well-defined, high-value problem better than competitors and shaping this into a repeatable process. Firms that dilute their expertise struggle to establish authority. Specialisation builds authority and pricing power. Client acquisition is another common stumbling block. Instead of chasing leads through cold outreach, the most successful consulting firms focus on becoming the reference in their field. Sharing insights, educating the market, and consistently reinforcing expertise creates demand, reducing reliance on unpredictable deal flow. Long-term success comes from consistently evolving expertise, deepening client relationships, and building a market-defining reputation.. Firms that take this approach position themselves as dominant players, creating a business that doesn’t just grow—it thrives on its own momentum.

After speaking to 300+ PS leaders at TSIA Envision, here’s my biggest prediction for SaaS in 2025 🔮 Professional Services will be a critical growth driver for SaaS businesses. Doubly so for those that are AI enabled or have a consumption-based revenue model. Every PS leader I spoke to was under pressure to increase margins, but also needed to drive value and outcomes for customers faster. They were in an uncomfortable place due to: 1. Limited budgets 2. Unclear priorities (choosing what to optimize for) 3. FOMO about AI How do you work through this? You need to first align with your exec leadership on very clearly prioritized goals, and craft a charter for your team that you get a sign-off on. Then work on your budget with your finance org - ensure you plan for the right resources for your customer work, and ALSO for strategic projects that can create a big impact for the company and your team. Do that, and you can expect a successful 2025 for you and your team. If you haven’t done your budgeting, here's a 4-step playbook for PS leaders to put together a budget you can align with finance on: 1️⃣ Work and Revenue Estimation - Collaborate with sales and finance - Determine the right PS attach rates - Model PS forecast from new logos, cross-sells and upsells 2️⃣ Capacity planning Take multiple approaches to validate capacity requirements. - Top-down: If business grows 15% QoQ, scale PS team accordingly - Bottom-up: Break down anticipated work with types of projects and average effort per project; calculate team size needed for different role types based on quarterly capacity Don't forget to account for operational overheads, ramp time, and partner involvement. 3️⃣ Systems/Tooling budget Finance usually likes to see clear ROI within 18 months of purchases. Work on the ROI case with any new vendors. And this needs to impact your models to showcase the ROI. Validate your tooling budget with a total per employee tool spend that works for your finance org. 4️⃣ AI & Strategic Projects These are greenfield projects with impactful outcomes if you get them right. Aim to conduct 1 - 2 experiments per quarter, with measurable impact on at least two of the following: - Automated processes (reduce timelines and effort in your PS projects) - Delivery productivity - Project governance (reduce risk, increase advocacy) –--- [PS: Want to learn more? I’ve added the link to a recording of a budgeting session we did for PS leaders] What are your predictions for SaaS in 2025? Let me know in the comments section below ⬇️

The Consulting Growth Journey – Navigating Key Inflection Points 🚀 As consulting firms grow, they hit critical inflection points—moments demanding strategic shifts to sustain success. Having led, supported, and advised firms through these transitions—and with insights from Mark Palmer and Prof. Joe O'Mahoney—we’ve identified four key revenue milestones: 🔹 £2m – Scaling Beyond the Founder 🔹 £6m – Investing for Strategic Growth 🔹 £10m – Professionalising Operations 🔹 £20m+ – Leading with Vision & Innovation Each stage requires a shift in mindset, leadership, and business strategy. Let’s explore the first two: 🔹 At £2m Revenue: Scaling Beyond the Founder At this stage, the business is still founder-led, but real growth means letting go and trusting your team to manage key projects and client relationships. ✅ Profitability is key – Strong gross margins fund future growth. ✅ Cash is king – Healthy cashflow is essential. Ensure prompt invoicing, tight credit control, and reserves to weather slow periods. ✅ Refine processes – Build solid recruitment and onboarding systems. ✅ Strengthen account management – Reduce client dependency on founders. ✅ Be selective – Avoid reactive decisions and low-value RFPs. ✅ Prevent burnout – Start building a leadership team. ✅ Own your niche – A sharp, focused value proposition drives sustainable growth. Many founders underestimate cashflow discipline at this stage. Even a profitable business can struggle without it. Predictable cash inflows enable confident investment in talent and growth. 🔹 At £6m Revenue: Investing for Strategic Growth At £6m, the shift is from opportunistic growth to strategic investment. Success at this stage requires: ✅ A clear brand & value proposition – Define and own your market position. ✅ Pipeline management – Use CRM for predictable sales and management insight. ✅ Firm-wide sales culture – Business development isn’t just for leaders—everyone contributes to growth. ✅ EBIT margin normalisation – Margins may adjust from ~40% to ~20% for stability. ✅ Developing talent – Identify leaders and build accountability. ✅ Retaining key performers – Equity-based incentives like EMI schemes help retain top talent. At this stage, firms must transition from reactive growth to structured scaling, investing in the right frameworks for the next phase. Successfully navigating the £2m and £6m milestones is about trusting your team, refining your value proposition, and making smart investments. But beyond £10m, the game changes. The challenge shifts from entrepreneurial hustle to scalable operations. How do you professionalise without losing agility? How do you transition from founder-led growth to a firm that can truly scale? In my next post, I’ll explore how firms move from £10m to £20m+, where leadership, operational excellence, and market positioning become essential. Stay tuned! 🚀 📌 Which of these challenges resonates most with you? Share your experiences below! 👇

I violated data best practices to deliver a $40K ROI. (The client renewed. Here's why.) For 4 years, I've preached data best practices: Build proper data models. Minimize tech debt. Do it right the first time. Then reality hits. A mid-sized healthcare company hires us. They need a manual report automated. Fast. Your offer as a consultant is speed-centric. Their "source of truth" is 400 stored procedures written by a DBA who left 2 years ago. Zero documentation. Spaghetti SQL everywhere. 30+ Power BI reports querying directly off the transactional database. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝗜 𝘄𝗮𝗻𝘁𝗲𝗱 𝘁𝗼 𝗱𝗼: Build a clean data warehouse from scratch. Proper dimensional modeling. Governed metrics. Best practices. 𝗛𝗲𝗿𝗲'𝘀 𝘄𝗵𝗮𝘁 𝗜 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗱𝗶𝗱: Replicated their messy legacy logic in the cloud. Matched their numbers exactly—even the parts I knew were questionable. Automated the manual report in 6 weeks. Delivered the $40K ROI we guaranteed. 𝗪𝗵𝘆? Because many executives don't care about best practices. They care about results. Now. You don't get 3-6 months to "do it right." You get 6 weeks to prove you're worth keeping. 𝗧𝗵𝗲 𝘁𝗿𝘂𝘀𝘁-𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗽𝗮𝗿𝗮𝗱𝗼𝘅: If you show up and tell them their legacy logic is wrong, they won't trust you. If you replicate it perfectly first, they do. Once trust is built? Then you can challenge the legacy logic. Then you can propose the proper data model. Then you can start fixing the mess. But not before. 𝗛𝗲𝗿𝗲'𝘀 𝗵𝗼𝘄 𝘁𝗼 𝗯𝗮𝗹𝗮𝗻𝗰𝗲 𝘀𝗽𝗲𝗲𝗱 𝗮𝗻𝗱 𝗾𝘂𝗮𝗹𝗶𝘁𝘆: 𝗗𝗲𝗹𝗶𝘃𝗲𝗿 𝗾𝘂𝗶𝗰𝗸 𝘄𝗶𝗻𝘀 𝘁𝗵𝗮𝘁 𝗲𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵 𝘁𝗿𝘂𝘀𝘁 Automate one critical report. Match legacy numbers. Show ROI fast. 𝗢𝘃𝗲𝗿𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 𝘁𝗵𝗲 𝘁𝗿𝗮𝗱𝗲-𝗼𝗳𝗳𝘀 "This works, but it creates tech debt. Here's the plan to fix it long-term." 𝗖𝗮𝗿𝘃𝗲 𝗼𝘂𝘁 𝘁𝗶𝗺𝗲 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗿𝗲𝗯𝘂𝗶𝗹𝗱 Once trust is established, allocate hours to build the proper foundation. 𝗞𝗲𝗲𝗽 𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝗶𝗻𝗴 𝘃𝗮𝗹𝘂𝗲 𝘄𝗵𝗶𝗹𝗲 𝘆𝗼𝘂 𝗶𝗺𝗽𝗿𝗼𝘃𝗲 Don't stop showing ROI while you refactor. Balance both. 𝗧𝗟;𝗗𝗥: Best practices are the North Star. But speed to value is survival. Deliver quick wins. Build trust. Then improve the foundation. Perfection kills consulting businesses. Progress builds them. Agree or Disagree? P.S. - Full breakdown of how to balance speed vs. best practices in this week's newsletter. Link in comments. 👇 ♻️ Share this if you've ever had to choose between doing it "right" and doing it "fast." Follow me for real talk on what data consulting actually looks like in the wild.