Curious about how to transform your industry expertise into a successful consulting business? Steve Hopper, today’s guest, made that leap, and he’s here today to tell the tale. After decades of experience in the logistics and warehousing space, Steve left a larger consulting firm in 2004 to start his own venture, Inviscid Consulting. Today, he shares the journey of building his firm, the challenges of transitioning from subcontracting to direct client work, and the innovative referral program that has become a cornerstone of his business growth. Tune in to learn how Steve navigates the complexities of consulting while maintaining a lean operation and delivering exceptional value to his clients.
In this episode, you will learn:
- The motivation behind starting a consulting firm
- Transitioning from subcontracting to direct client work
- The power of a simple referral program
- Managing client relationships and ethical considerations
- Strategies for growing a consulting business
- Framing business cases for clients
- Overcoming the challenges of running a lean operation
- The importance of networking in consulting success
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Welcome to the Consulting Success podcast. I’m your host Michael Zipursky, and in this podcast, we’re going to dive deep into the world of elite consultants where you’re going to learn the strategies, tactics and mindset to grow a highly profitable and successful consulting business.
Before we dive into today’s episode. Are you ready to grow and take your consulting business to the next level? Many of the clients that we work with started as podcast listeners just like you, and a consistent theme they have shared with us is that they wished they had reached out sooner about our Clarity Coaching Program rather than waiting for that perfect time. If you’re interested in learning more about how we help consultants just like you, we’re offering a free, no pressure growth session call. On this call, we’re going to dive deep into your goals, challenges and situation and outline a plan that is tailor made just for you. We will also help you identify where you may be making costly and time consuming mistakes to ensure you’re benefiting from the proven methods and strategies to grow your consulting business.
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Steve Hopper, PE, is the Founder and Principal of Inviscid Consulting, and he has spent over three decades helping clients optimize their warehousing, logistics, manufacturing, and distribution operations. With a focus on reducing operating costs, improving service levels, and implementing effective supply chain solutions, Steve has worked with a range of clients from small businesses to Fortune 100 companies. He holds a Bachelor of Industrial Engineering from Georgia Tech, is a licensed Professional Engineer, and also serves as an expert witness, industry advisor, and speaker at various industry events.
Connect with Steve Hopper
Discover more about Inviscid Consulting
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Hey, Steve, welcome.
Thank you. Good to be here.
Yeah, great to have you. Let’s dive in. You have been a consultant or you’ve been working in the logistics warehousing space for almost 30 years or so. You’ve been running your own consulting firm since 2004 after working at a larger consulting business. Just take us back to that time around 2004, give or take. Why do you decide to go out on your own? What was the impetus for starting your own consulting business?
I think there were a number of factors. I experienced some bureaucratic kinds of frustration that come from working for larger companies, some of the politics that goes along with that. I think I do have sort of an entrepreneurial spirit that prompted me, and putting all that together, I just decided the time was right for me to hang out my own shingle.
Defining Inviscid Consulting’s Mission
You shared with me earlier that there’s maybe two, two and a half kinds of specific things that you are known for or that your clients come to you to get help with. Share what those are and maybe how you arrived at them. How did you discover that these are the two or so things that your clients actually care most about?
We refer to that as our mission statement. I mean, our mission is to help businesses fundamentally do two things: reduce operating costs, everybody wants to do that, become more profitable because their costs are lower; and to also improve service levels, things like the speed of delivery or the accuracy of orders. There are a couple of dozen metrics these kinds of businesses typically track fairly regularly, and so helping them improve those service levels. And really any business that is a prospective client for us, that’s in the field of warehousing, distribution, logistics, fulfillment, they all want to do those things. And so that’s our mission as a consulting firm to do that.
Transitioning from Subcontracting to Direct Client Work
You told me that when you launched, you initially got the first group of clients through your own network. You spent a lot of time going to industry events, conferences, talking to people, so you weren’t just hiding behind your computer, which is something that I think far too often people do these days. And so you were well tapped into what was actually happening in the marketplace, and so you said to people, “Hey, I’m going to be going out on my own. This is my area of expertise. People said, “Hey, we could probably benefit from you.” But a lot of that initially was through subcontracting. What was your experience like being a subcontractor? What do you like about it? What did you maybe not like about it so much?
The good news was that there was business already out there. These were other businesses, generally larger businesses, that had potential consulting projects that I could tap into and do my type of work working with them. The downside is that you don’t control those projects. We don’t have the authority to do certain things on the project because we have a very specific contract with them. They have the contract with the end client. It also continues to lead to some, you could almost call it frustration in that, because they own the client, I can’t claim that client as my own reference. Their firm claims that client as a reference, and it would be kind of a breach of the agreement I typically have with them if I claim that client as a reference directly because I was working through their firm. I actually have a drawer full of business cards from probably a half dozen other well known large firms that we’ve done work on their behalf. And so their clients have seen me as members of their team, as opposed to me working as Inviscid Consulting, which is my firm.
Navigating Client Relationships and Referrals
Does that mean that you, with the agreements that you’ve signed with these other companies, because you are the subcontractor in your specific situation and with that specific agreement, that you’re not able to put, for example, the logo of those companies on your website or mention them by name on your website. Is that kind of what you’re referring to?
Every subcontractor agreement is a little different. Each of those companies kind of has their own rules about things, but that’s some of it. I mean, I think some of it is just kind of the awkwardness of what could happen from that. Because, for example, if I worked with a large company through another large consulting firm, they brought me in as someone to run a project for them, and I did that, and that client sees me as working for that firm. Then, okay, a year, two, three, four years go by, and I want to use that person as a reference for another prospective client, it gets complicated because you kind of have to explain, “Well, Inviscid, my firm, didn’t book that work directly.” We were working for this other firm, and they’re the ones that have that relationship, and they would see it as an affront if we try to make direct contact with that end client. It’s not our place to do that in a lot of those situations. And so they really don’t want you reaching out to their client directly after the project.
The Power of a Simple Referral Program
You shared with me as well, that over the last few years, you’ve been transitioning the business away from only doing subcontracting work to a higher percentage of business being actual direct client business, meaning that you’re no longer subcontracting, you’ve won the client directly. You told me that one of the most effective ways that you are currently generating those new leads and bringing opportunities into your pipeline is through this referral program that you have, which I thought was very interesting. Can you just explain to everybody, how does that work? How do you actually get people to send you referrals, to send you opportunities? Is there compensation? If so, what does that look like? Just kind of run through it?
Sure. Well, I’ve been on the receiving end of referral programs from other businesses for quite some time, even before I had my own firm. And I discovered that almost all of them are these formal agreements that they expect you to sign, and they can be complex from a legal standpoint. And I just started asking myself, “Why?” A referral is just a tip. It’s a tip to go after a piece of business. There’s no need to overcomplicate that. If I can structure something where I get a tip from someone about a potential consulting engagement, we book that engagement and I pay that person a portion, like a referral fee or commission, whatever you want to call it, for my paid consulting fees, then that’s a win-win, and you don’t need to complicate that with contracts. And so what we put together, and it has worked very well over the years, is anyone who gives us a tip for a consulting project, it might be and they might say, “Hey, Michael, this company has a need that I think you can help them with. And here’s what I know about it, and I think this person might be the person to contact.” If I were sitting in your chair, I’d say, “Great, we’re going to chase that and see where it goes.” And if we end up booking that consulting engagement, then whoever it was that gave us that tip automatically gets 10% of our professional fees off the top. Before we make the money, the 10% goes to them. It’s like a commission, and it’s just an automatic thing. It’s paid to them. As soon as we get paid by the client, it’s paid to them. Seems to work pretty well.
Understanding the Referral Network
So who are these people typically? I mean, are they somebody inside of these organizations? Are they other consultants? What have you seen in terms of who are the actual people that are sending you these tips?
If you can turn your inventory faster, it means your capital cost of holding inventory goes down, and that’s worth this much dollars per year to the business. Share on X
It’s a wide variety. There are people at other consulting firms. And by the way, I always tell them I don’t want to create any conflict of interest for them. They shouldn’t be sending business my way that their firm could get because that would be a conflict of interest. But sometimes they may hear about something that is either not in their wheelhouse that we could help them with, or they just don’t have the bandwidth and interest in going after and they can refer to that. But yes, consultants would be one source. Solution providers, software companies, providers of automation and equipment and so forth in the industry, that’s another source.
I’ll give you kind of an oddball example. There’s a gentleman I know that specializes in selling paper and packaging supplies, but he works in the industrial sector, so he’s out there calling on all these businesses, selling them stretch wrap and corrugated boxes and stuff. Well, in those conversations, he sometimes hears about people that, “We want to improve our labor performance in our warehouse,” or, “We want to select software.” And so he’ll tell me about that and then we’ll chase business, and that’s an example of that. So there are people in the media that have referred things to us, they’ve heard about things and passed them along to us. A wide variety.
Spreading the Word about the Referral Program
How are people actually hearing about this program? Is it you just meeting people and you’re telling them face to face? Are you sending out emails? How do the people, let’s say consultants or the media or whoever it is that is sending the tips, how are they actually learning about this program?
It’s not something that is marketed. We have this flier that outlines it, and that’s really only for simplicity so that I can leave behind something and they see how it works and maybe they’ll think of us. But it’s usually from networking. It’s usually from when I’m meeting new people at a conference or on a phone call with someone or whatever it is. And just by virtue of having the conversation and getting to know that person, I’ll mention the program and usually people will say, “Hey, that sounds interesting.” And then I’ll follow up that conversation with the little flier, and that results in starting that new referral conduit, if you will.
Reciprocity and Ethical Considerations
That makes sense. That sounds like a great opportunity, and obviously one that’s working well for you. I know you said you might have some months where you’re getting three or four new opportunities or tips coming your way. So that’s a nice flow of leads to the pipeline.
And it’s reciprocal, too. I mean, a lot of times we do the same thing for other firms. I mean, we specialize in that function of warehousing, fulfillment, distribution, logistics. We sometimes hear about things that are outside of our wheelhouse, and we can suggest to our partners, “Hey, you need to contact this company.” Occasionally, we’ll get a referral fee from that as well. But again, we’re very careful. We have a code of ethics on our webpage that talks about, we don’t want to be getting kickbacks from- If we’re doing a paid consulting engagement, we don’t want to– For a selection, for example, if we were going to select software or material handling equipment or whatever, we would never take a referral fee for that. But for something that we’re not engaged in a project or something, we’re always happy to refer that to other people. And then that can create a win-win the other way as well.
Typical Engagement Size and Sales Cycles
Right now, what’s your typical engagement size in dollars? What does the range look like? Or what is just kind of a typical average deal in terms of dollar value?
Yeah, averages can be a little deceiving. My dad always used to say, “When your head’s in the freezer and your feet are in the furnace, on average, you’re doing pretty well.”
That’s a good one.
Yeah. So it’s a wide range. I would say the low end is just a few hours of my time. I do expert witness work in litigation, for example, and sometimes an attorney will contact me and say, “Hey. We got this potential case, and we want to talk for a few hours.” And that would be just a few hours here and there. Opposite extreme, we can go into six figure consulting engagements where they’ve hired me to just do something much more in depth. So I would say going into six figures, we haven’t had a seven figure deal yet, but maybe one of these days we’ll hit that.
And what are the sales cycles? So, again, taking maybe what’s called your preferred or the type of project that you’d like to do. So maybe it’s between $50,000 to $100,000 or $50,000 to $200,000, somewhere in that range. What does that look like? First of all, I guess, what are you providing? And then I’d like to just understand how long you find that it typically takes you from first meeting somebody to actually booking the business.
It’s a wide variety there. I would say– Well, first of all, it’s important for us anyway, we are purely a professional services company, so we don’t sell. And this is a pet peeve of mine. I have to say that there are other businesses out there in the industry that claim to be consultants. They advertise themselves as a consulting firm, but they’re selling the solutions that they’re recommending. And I think that’s really a conflict of interest. And that’s why, like I said, our code of ethics, we will not do that. We’re agnostic when it comes to anything we recommend. We’re purely professional services. People pay us for our expertise, for the time that we work on the project. And as far as a sales cycle, it can be, like I said, very quick. If somebody just wants to set up a call next Thursday for spending a couple hours talking about something, then that could be a very quick sale. There have been, I’m trying to think, maybe the longer term sales cycles have been certainly well into the months and probably more than a year from the first conversation until the time our consulting engagement was actually booked.
Strategies for Accelerating the Sales Cycle
Is there anything that you found, Steve, that helps to accelerate the sales cycle on some of these larger deals that you have?
Well, I think I’ve learned some of that over time. I’ve gone out of my way to standardize certain tools that I use, not only in the consulting process after we booked a project, but tools that I use in the qualification process in the just kind of the sales process. I won’t get into sales funnels and all of that, but there are certain things that I obviously learned over the years that can help advance the ball a little bit quicker.
Can you maybe share one or two of those specifically? Just anything that you feel is a best practice that you’ve learned that might help others.
For what I do, almost everything boils down to some kind of an economic value. If you think about businesses that operate warehousing, fulfillment, distribution, they spend money to make money. And so I have to frame everything. And rightfully so, I think this is the right way to do it, frame everything from an economic business case standpoint. That business case can have multiple directions to it. It could be reducing inventory, it could be reducing labor, it could be reducing the amount of equipment and so forth they have to have. There’s all kinds of variations to that, but at the end of the day, they’re really trying to save some money somewhere or improve their sales. Shipping orders more accurately and, and more quickly will lead to more sales. And so that’s the revenue improvement. But speaking in those terms about what is the impact on the business really in dollars and cents tends to be what motivate people more than just, “Hey, we’ll have better inventory accuracy.” Well, what does that mean? You know, what does better inventory accuracy mean? If you can turn your inventory faster, it means your capital cost of holding inventory goes down, and that’s worth this much dollars per year to the business. So that’s what I mean by trying to frame things in terms of economics.
Framing the Business Case for Clients
So really making a business case, focusing on the value, the outcomes that you’re going to create for them and speaking their language is really what I’m hearing you say.
One of the things that’s come up a lot when we engage with a new client, we have kind of a quick survey that we, before we go on site with that client, a survey that we send them to get a sense of what we’re going to see when we’re there. And I wont get into all the details of that, but the first question on that is, what are your top three goals for this operation? And I’ll see what they respond. And it’s interesting because people will sometimes say, “Oh, automation is our goal,” or “We want a new facility, a new distribution center is our goal.” And so when we get answers like that and we begin to engage with the client and we sort of say, “Timeout, is automation really your goal? Or is automation a tool or a means to reach some other goals, such as reduced costs?” I mean, you don’t buy automation because you want automation. You buy automation because you’re trying to save money. And you don’t build a new facility because you want a new facility. You build a new facility because there’s something about that that’s going to result in more profit or reduced cost in doing so. So those goals become very important to get people thinking about “Why are you really wanting to do this and what are the true goals at the end of the process? What defines victory when all this is done? What defines victory for this type of a project? “And sometimes that really helps people think about whether it makes sense to do the project.
Growing and Scaling the Business
How do you think about growing and scaling your business? I know you’re running a pretty lean ship in terms of don’t have a big team. You’re still very involved in all aspects of the business. When you think about growth, how are you currently thinking about continuing to grow the business or have the impact that you want with the resources that you have in terms of people or small team and so forth?
Yeah, it’s tricky. I’ve jokingly said over the years, if I could only clone myself. And I don’t mean that from an ego standpoint, but it’s really more of to run this business. I have, for good or for bad, built an inventory of my own skills and experience that allow me to do this. And other people, a lot of other people could get to that point, but I would have to train them, I would have to pay them, I would have to nurture them along to get to that point. So it’s very tricky. And over time, looking back 20 years from when I started the firm 20 years ago, I just literally independently hung out a shingle, like I said, and largely did subcontract work, but did other work as well. And it was just me. And over time, I began to add more people to the team by way of subcontractors and scale that way. And doing things like that has allowed me to focus less of my personal time on the day to day heavy lifting of a project, and focus more on the business.
So far, and I don’t think this will ever change, I’m always personally involved with every project that my firm does, but much of my work on a given project is spent kind of at the higher level. I don’t spend as much time on the details, the analytical aspects of it, or thinking of all these examples. I used to do AutoCAD work myself, another great example, and I thought, I can pay somebody to do AutoCAD and they’ll be able to bill out cheaper than me doing AutoCAD. So finding ways to delegate things without giving up control. I mentioned with doing subcontract work, I don’t want to throw the project over the wall to someone else to do, because then it gets out of my control and I have certain expectations and I want to make sure things are right and all of that. But as much as possible, if I can get things off my plate and just kind of oversee the work, it frees me up to do more of the kinds of things I need to do to scale the company higher.
Connecting with Steve and Inviscid Consulting
So, Steve, I know today we have a little bit of a time constraint, but I do want to make sure that people can learn more about you and everything you have going on at your company. What would be the best place for them to go to learn more about you and everything you have going on?
Well, I mean, I would say with the web these days, certainly LinkedIn, I have my LinkedIn profile. I’m an open networker, which has been very valuable to me. We were talking about networking. But also our website, inviscidconsulting.com. I don’t know if you’ll splash that on the screen.
Well, yeah, we’ll link that up. Everything is in the show notes so that they can go to consultingsuccess.com. and click on that for access.
Yeah. But inviscidconsulting.com has our story, if you will, and the kinds of specialty areas where we work.
Okay. We’ll get all that set up. Steve, again, thanks for coming on. I know we have a little bit shorter time here than usual today. I hope that everyone will take some lessons, especially around, I think, the referral idea and the kind of program that you’re running, which seems to be very successful for you. So congratulations on that. And again, thanks so much for coming on.
Thank you, Michael. It’s good to be here.
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