Scenario: Peter Olander was flummoxed. A friend in his Builder 20 Club had suggested that his company, Olander Construction, do some strategic planning. So he called a consultant recommended by another of his friends, and the consultant sent him a multi-page questionnaire to fill out. He wanted to know the number of houses Olander built by size and price range, who his competitors were, and how he was positioned against them in the marketplace. How should he know that? He had a vague idea what his competitors did, but he had no idea how many houses they sold or how their homes were perceived. If he knew all that, why would he need a consultant?
But the question that really stumped him was the one that asked, “Where would you like your company to be in five years in terms of sales, market share, and market niche?” Five years from now? He was doing well to know what he was going to be doing five months from now, let alone five years.
Peter was one of those people who strongly believed in dealing with today’s problems today—tomorrow would bring its own problems, and he’d deal with those problems then. Since he was diligent and hard-working, that philosophy had enabled him to grow his small company to its present level building six houses a year at an average sales price of $450,000. Of course, average price was a misnomer, since the most expensive home last year had been $875,000, and the least expensive had been $285,000. But that wasn’t due to any lack of planning; he just built whatever walked through the door. He liked the challenge of having to build each new home from scratch. So how could he position his company when it was different with each new client and each new house?
As far as his financial goals were concerned, he just wanted to keep making 15% gross profit on every house. Just 15% above his costs—that didn’t seem so much to ask. He’d tried to keep overhead low, and in fact, his office manager complained that she was overworked and underpaid. He didn’t always make that 15%; sometimes costs just got carried away, and he didn’t find out about it until later.
The consultant also wanted to know who his customers were, down to their ages, incomes, and family sizes. Well, that was easy. His customers were anyone with enough money who wanted him to build their home. He didn’t do much advertising; word of mouth had managed to bring in enough work to keep him busy, so he wasn’t sure what the consultant meant by “What is your message?”
All those questions and no answers. It reminded him of that old adage, “A consultant is someone who borrows your watch and then tells you what time it is.” If that was what consulting was all about, then why the heck did he need it?
