95: Why Your Clients Are Too Small (Fractional to Scalable Series #9)

It's 8.47 on Thursday morning. Fiona is standing at her kitchen counter, sipping her first cup of coffee after getting the family off for the day. She remembers to take a deep cleansing breath to help with the anxiety she can feel building. She just hit send on an email that she felt in her gut. She turned down $24,000. It would have been a retainer for $4,000 a month for 6 months for fractional fundraising. Two years ago, she would have been over the moon to have this opportunity with a scrappy nonprofit whose mission she adores. On the discovery call, Fiona could hear the exhaustion in the ED's voice. She knew the ED couldn't do this themselves. Fiona has the exact depth and breadth of experience they need. And truthfully, she could start Monday. And she said no. Because a few weeks ago in one of our coaching calls, we co-created new positioning for her. She's going to focus on organizations between two and eight million in funding who have a development director on staff, but do not have a major gifts program. It's going to help them implement a major gifts program. And right after she got clear on it, I told her something I tell all of my clients at this stage. The universe is going to test you. A compelling project is going to come your way. It will tug at your heartstrings. It will look like income you need. And it will be the exact kind of work that pulls you off the path you just got clear on. This was Fiona's test. Welcome back to the Biz of Nonprofit Consultants. I'm your host Natalie Eckdall. And this is episode nine in our fractional to scalable series. You're welcome to pop in if you haven't listened to the previous episodes and join this one. If you're new here, this series is for consultants in the messy middle. You've built something real, but you can't quite see how to grow. You've currently built a business based all around you and your expertise. And it's hard to know how to grow when there's really no more of you that is available to give. If that's you, please know that this is normal. And it's normal to be uncertain about where to go next. If you're considering narrowing your positioning, then frankly, it's terrifying. Your brain will fight you. It will tell you it's unsafe to do that to narrow your options. But I will tell you time and time again, after helping many hundreds of consultants position their businesses. More narrowly, I can 100% say it works. And one of the biggest things keeping you stuck in this messy middle space is often, most often, the size of the organization you're serving. So today we're talking about why your clients are likely to small and why that's keeping you from building a scalable firm. I'm going to be direct because Fiona needed me to be direct with her. And I am direct with my clients. Most consultants start by serving smaller organizations under a million in annual revenue. Sometimes very well under and it makes sense. They needed you. They were all around you and they said yes. And the work felt meaningful and the work is meaningful. You could be a generalist. You could do a myriad of things for the organization. You might be designing a fundraising strategy, writing a few grants and providing a side of executive coaching and the organization, the ED and the board are grateful for you. And you could see the impact in real time. That's how you got here. It's also why you're stuck and can't see how you can grow beyond your time. You don't want to build a consulting firm on sub one million nonprofits because they are very price sensitive. Each dollar that comes in is very precious and their funding year to year is less stable. Here are three signs that your clients are too small. And you get constant price resistance. Every proposal inevitably sparks questions about your rate. You start to wonder if you're overpriced. You are not my friend. You are simply misaligned. Your work is valuable. Your current pull of clients just can't afford it. And the longer you swim in that pond, the more your money mindset takes hit after hit. You start shrinking your proposals even before you send them. And you start to think the market is not valuing you in the way that they should be. And the truth is, it's just you're talking to the wrong clients. Number two, experiencing scope creep after scope creep and what I like to call Swiss Army knife syndrome. Other works need everything and there is a lot of last minute and kind of unorganized requests that are usually out of scope and feel hard to say no to the board wants a report. The ED found a new grant they want to apply for and it's due next week. The operations person needs help with a spreadsheet. You say yes time and time again because you can see how overwork they are and how much each of them cares about the mission. But every yes it is outside of your offer is a no to building something scalable. You can't standardize an offer when every engagement is a custom job and you can't bring on a team to deliver work that has no consistent shape. The third thing I see happening is there are long sales cycles. It takes a long time to make the decision because those dollars are precious and it ends up in a no or silence or ghosting right. The third signal is long sales cycles that end in a no or just silence. You spend hours nurturing and educating in the proposal process and you send a very thoughtful proposal and then something changes on their end. The fiscal year shifts, a donor pulls out, they ghost you and that is not bad luck on your part. That is normal for that size of an organization. They don't have the decision making infrastructure or the financial cushion to handle these costs and your services are likely the first to go. So what do you do instead? Where do you aim in the marketplace? There are so many different sizes of organizations. There are the small ones, there are mid-size and there are also very large organizations. I do work with clients that serve large organizations and that would actually be a whole other podcast because they operate very differently and the skillset involved in working with them. It's very similar to having corporate clients. I come from the for profit world and the way that consultants are treated by large nonprofits is very similar to working with a corporate organization. My favorite place to steer clients, if it makes sense for them and nine times out of ten it seems to, is mid-size organizations. So the sweet spot is nonprofits between two million and twelve million. Now that may be slightly different in your market but two million to twelve million in annual revenue. And sometimes my clients will even find an even narrower slice in that range that makes the most sense for them. Fiona for instance landed on two to eight million based on her niche. And that's the work that I do with my clients. I help them focus on how to specialize the work they do and how to niche by who they are. Who they deliver to. Below two million in revenue money is precious. In fact, if you have a small business which I think most of you listening do, if you have a small consulting firm you can understand that your money is precious and it's the same thing inside the smaller organizations. And so once an organization gets to two million in revenue they have more stability and paying for a 40K high ticket scalable project is less of a big deal to them than it would be to a tiny organization. So the organization is big enough to have a real budget and clarity and their own processes. They're too small though to hire your skill set in house full time which is exactly where you create outsized value for them. Here's some examples capital campaign readiness evaluation system strategic planning with implementation major gifts infrastructure development operations. These become scalable high ticket projects with clear ROI return on investment for leadership and the board. They have a beginning middle and end. These projects can be standardized and can be delivered by a team not just you. But last part matters because in this series we're not just trying to get you two better clients. We're trying to get you two better clients. Trying to get you to designing a consulting firm that doesn't collapse without you. As revenue increases in your consulting firm, the percentage of time your in client delivery decreases. I'm going to say that again. What I help my clients create is a consulting firm where as revenue grows, the percentage of time you are working directly with clients decreases. That's what we do. Let's go back to Fiona. When she came to me, half her clients were under 800K and she loved them. She felt guilty even questioning the fit. But once we co-created her new positioning and moved her from focusing on fractional fundraising to a major gift scalable offer, I told her what I tell all of my clients. The universe will test you on this. And I see it frankly every time with my clients and honestly even with myself as I have narrowed my positioning as a coach. Previously I have coached for over a decade all consultants. In 2024, really in 2023, but I implemented it in 2024, I made the decision to only serve a portion of the clients I had been serving, which are you, non-profit consultants. And I've talked about that in previous episodes. The moment you get clear on where you're headed, something compelling and surprising shows up that points you in a different direction and you need to ask yourself, is this an opportunity or a distraction? Also, just because you can't do something doesn't necessarily mean that you should. The $24,000 project Fiona was offered last week, this fractional fundraising project or six month retainer, that was a test. She loved the organization's mission and truthfully she really wanted to help that exhausted ED. She really related to where they were at and what they're struggling with. And it's also six months of her not having the capacity to do other work in her scalable offer. And here's the harder thing I had to say to Fiona. It is not your job to rescue other adults. That executive director is a grown up professional running an organization. The exhaustion in her voice is real and it's not Fiona's to solve, especially not at the cost of the firm Fiona is building. Saying no hurt, costs of anxiety and the next test will probably hurt too. These are the really tough decisions I help my clients make and I remind them that you have to stay laser focused on what you are building. I know some of you are thinking, my heart is with these small organizations. You love them and they need so much help and they are doing such great things. However, I need you to remember, your business is not a nonprofit. We are building something sustainable, something that can support your family, your team and your contribution to the sector over the long haul. When you align with the right size client, you create stability in your own company. You train your team on a consistent method the way you do things. When you do this, you protect your margin and the stability is what lets you give back on your own terms. Remember, you do not need to do consulting work for small organizations to support them. You can create profit through your business and support them financially. What I worry about most is you getting burnt out, serving these small, tiny organizations that can barely afford you. That isn't generosity but instead likely leads to a slow exit from the field completely. My goal is not only to keep you in business but to help you build a consulting firm that creates more impact, more profit, while creating more ease for you. If you are resonating with this episode and even if it feels a little heavy, that is okay. That is a signal. If you would like to support building a scalable offer, one that includes deciding who your ideal client actually is, hint it's not sub one million organizations, I invite you to book a 90 minute intensive with me and you can do that by going to natalymba.com. We will work on your positioning, your offer and the client profile that will actually let you scale and you leave with a focused plan. For deeper ongoing work, I also offer private 101 coaching which is six months and of course you can renew. It's the same kind of support that our fictional consultant Fiona is getting right now. I'll share the link in the show notes below and spots are limited. I do know that I have a couple clients rolling off this in the next few months and so there will be one spot opening up each month. If you're interested, I'd love for you to go to my website again, it's natalymba.com and you can directly book from my website and intensive. You can go there, click and pay for 101 coaching, there's an application and after I receive your application, I review it and invite you to a call to discuss if it's a mutual fit for us. Being a business owner takes great courage. You're making decisions like saying no to $24,000 that most people will never understand. I see you doing it and even if we've never spoken, I want you to know, I believe in you. Go, make some impact.