The Point: When I “threw out my entrepreneur shingle” and started my coaching and consulting business, I was in love with startups. I loved their energy, ambition, and disruptive ideas – they were like a very strong magnet attracting me to them! I wanted to help these driven entrepreneurs take their vision and make it scalable. But I realized something: Startups don’t scale your coaching and consulting business.
Despite their potential, working with startups often feels like being caught in the aftermath of a bomb explosion, where the mushroom cloud symbolizes their scattered focus and chaotic priorities. They are multi-focused, indecisive, and tend to view business consulting and executive coaching as a “luxury”—even when they desperately need the guidance. In this article, I’ll share my journey of moving away from startups to focus on SMBs with proven readiness, explain why startups can be a tough fit for seasoned consultants, and provide insights for coaches and consultants on identifying their ideal target markets… Enjoy!
KEY TAKEAWAYS
- Startups Exude Potential but Lack Readiness: Startups often have captivating visions, but their multi-focused nature and limited operational clarity make them challenging partners for consulting or coaching.
- Decision Paralysis Hampers Progress: Many startup entrepreneurs struggle with making critical decisions due to inexperience and competing priorities, stalling potential engagement effectiveness.
- Coaching and Consulting Viewed as Luxuries: Startups frequently see external expertise as a “nice-to-have,” rather than a strategic necessity, which undermines the consultant-client relationship.
- SMBs Are Better Positioned for Coaching and Consulting:
- Proven Readiness: SMBs typically have established operations, clearer goals, and the resources to implement strategic advice effectively.
- Decisive Leadership: Experienced leaders in SMBs are more capable of acting swiftly and decisively, driving momentum in engagements.
- Strategic Investment Mindset: SMBs view consulting and coaching as a worthwhile investment, ensuring mutual commitment to impactful outcomes.
- Identifying Your Ideal Target Market:
- Define your value proposition and align it with clients who can fully benefit from your expertise.
- Use a qualification framework to assess prospects’ readiness for engagement.
- Focus outreach on established SMBs with proven growth potential, leveraging tools like Deloitte’s Tech Fast 500 or INC 5000.
- Optimize Time and Impact: Consultants and coaches should focus on clients who value and are prepared to act on their expertise, avoiding the risk-heavy nature of startup engagements.
The Startup Trap: Why Entrepreneurs Struggle to Commit
1. The Lure of Potential
Startups exude potential. The founder’s pitch is captivating, and their vision often feels revolutionary. For many business consultants, this is an irresistible draw. You see where they’re headed and believe your expertise could bridge the gap between their ambition and reality.
But here’s the catch: startups rarely have the operational clarity to act on your advice. Their focus is split between product development, fundraising, and trying to capture market share. This lack of prioritization trickles into their decision-making process, often stalling engagements before they even begin. They may love the idea of coaching or consulting but can’t commit to the investment—financially or strategically.
2. Decision Paralysis
One of the greatest frustrations I’ve encountered working with startup entrepreneurs is decision paralysis. Many are first-time leaders, and their lack of experience shows in their hesitancy to pull the trigger on crucial decisions. They’re juggling a million competing priorities, often with limited resources, and fear of making the wrong choice freezes them in place.
This indecision doesn’t just hinder their growth; it also prevents them from fully leveraging the value of consulting and executive coaching. As consultants, we thrive on actionable insights and strategic execution. Without a decisive partner on the other side, our efforts stall—and so does the impact we can deliver.
3. Viewing Consulting as a Luxury
Perhaps the most glaring challenge is that many startup founders view coaching and business consulting as a “nice-to-have” rather than a necessity. They focus on survival and immediate wins, such as landing their next investor or launching a product. While these are valid priorities, they often fail to see how strategic guidance could accelerate their progress or prevent costly missteps.
For seasoned consultants, this mindset is a non-starter. When a client doesn’t value the expertise you bring to the table, the relationship becomes transactional and short-lived, undermining the potential for long-term impact.
Why SMBs Are a Better Fit for Business Consulting*
1. Proven Readiness
SMBs with established operations and revenue streams are better positioned to benefit from coaching and business consulting. These organizations understand the value of strategic insights and have the resources to implement them effectively. Unlike startups, they are not just surviving—they are actively seeking ways to scale.
For consultants, this alignment is crucial. SMB leaders come to the table with clarity around their goals and are ready to invest in achieving measurable results. This readiness makes engagements more productive and rewarding for both parties.
2. Decisive Leadership
Unlike first-time startup founders, SMB leaders often have years of experience making tough decisions. They understand the stakes and are willing to act swiftly on advice. This decisiveness creates momentum and allows consultants to deliver impactful results within a shorter timeframe.
As a coach or consultant, working with leaders who value your input and act on it creates a partnership dynamic that fuels mutual success. It’s a stark contrast to the stop-and-start nature of many startup engagements.
3. Strategic Investment Mindset
SMBs see coaching and business consulting as investments, not luxuries. They have budgets allocated for growth and view external expertise as a means to accelerate their trajectory. This mindset fosters long-term relationships where consultants can deliver significant value over time.
By focusing on SMBs, consultants can avoid the constant negotiation and justification of their worth that often comes with startups. Instead, they can concentrate on driving results and building sustainable partnerships.
*NOTE: I love working with the Fortune 500, but so do my former Deloitte colleagues (as do those at McKinsey, Bain, etc.) It’s awfully “red ocean” in the Fortune 500! So why not concentrate on a little more “blue ocean” strategy, provide the same Deloitte experience, and do so at 1/3 the price?
How to Identify Your Ideal Target Market
1. Clarify Your Value Proposition
Define what you bring to the table and who benefits most from it. For example, if your expertise lies in scaling businesses from $10 million to $100 million, startups aren’t your ideal clients. Instead, target SMBs with the scale and ambition to match your skill set.
2. Develop a Qualification Framework
Before engaging with a prospect, ask qualifying questions to assess their readiness:
- What’s your annual revenue, and how do you allocate your budget for external expertise?
- What are your top three strategic priorities for the next year?
- What challenges are you facing, and what’s the cost of not solving them?
These questions can help you filter out prospects who are not ready to commit to a productive engagement.
3. Focus Your Outreach
Use tools like Deloitte’s Tech Fast 500 or the INC 5000 lists to identify SMBs with proven growth and the resources to invest in scaling. Tailor your messaging to highlight how your expertise aligns with their specific challenges and opportunities.
Summary
Startups may seem like exciting prospects, but for seasoned business consultants and executive coaches, they often represent more risk than reward. Their multi-focused nature, decision paralysis, and tendency to view coaching and consulting as a luxury make them a challenging fit for impactful engagements.
By focusing on SMBs with proven readiness, decisive leadership, and a strategic investment mindset, consultants can build more productive partnerships and deliver greater value. It’s not just about avoiding frustration—it’s about aligning your expertise with clients who are ready and willing to scale.
If you’re a coach or consultant looking to identify your ideal target market, take a hard look at where your efforts are most valued. Remember, your time is your inventory. Invest it where it makes the greatest impact—on clients who are ready to grow with you.
Sam Palazzolo, Managing Director @ Tip of the Spear Ventures
