Questions

What does the evolution of a company profile (staff,rev,etc.) look like of growing a tech consulting company from startup to $1M of revenue look like?

3answers

Traditionally agencies and consulting firms grow vertically through a pyramid structure adding junior layers and mid level professionals who can be paid at a lower level and then billed back at higher rates to the clients as they scale once the rainmaker fills the pipeline. Another option is to grow horizontally and compensate people for bringing in work thereby gaining leverage through a network effect of casting a wider net. Both ways can work it is a matter of strengths and preferences.


Answered 4 months ago

It is a good question if the growth of the company is well structured defined and firm or it is dynamic to mirror the growth.
The growth path is generally on the lines of the focus the leadership has in this growth period. If the leadership is focused on results the evolution of a growing tech consulting company is casual, dynamic and result oriented. The staff will be performing multiple roles and the org structure would be lean

However if the leadership is focused on performance and process oriented, then there is likely to be hierarchy ( whether it is projectised or matrixed or could be hybrid) .

Whatever is the focus however this would be the right time to bring formalization in the processes and results.


Answered 4 months ago

Every case is different but I would expect something as follows. You would probably start with between 2 and 4 people and probably end up at around 5-7 people. They key here will be the people generating the income for the business; both sales and delivery. At $1M you probably would not have an office manager or many ancillary functions as they cost money. You would potentially outsource your accounting. If your sales staff/person is very good you would start with selling one or two project. As these are being delivered next ones would be sold and so on until you cannot deliver more and you have to hire another consultant. At this stage you would probably take in contractors until you are certain of the project pipeline. This will differ for FT projects and PT projects. It will also depend on the daily rate you are charging. If the daily rate is $1k then you are looking to sell 1000 man days to get your $1M => 4 guys working 250 days per year. Add 1 sales guys and 1 or 2 junior staff plus office costs etc. The time of this can take is as little as 6 months or it can be 2 years - all depends on your sales.


Answered a month ago

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