3 ways to grow a manufacturing advisory services practice

3 ways to grow a manufacturing advisory services practice

Choosing a specialized niche in manufacturing can provide advisory firms with a competitive edge. This focus allows firms to develop a deep understanding of the unique challenges and opportunities within that sector, thereby offering more specialized and effective solutions to their clients. And because firms can target a specific audience with pinpoint accuracy, focusing on a niche can also lead to more effective marketing strategies.

Manufacturing clients often have complex supply chains, multi-tiered compliance regulations, and ever-changing technology. Understanding these characteristics is crucial for firms to offer actionable solutions. Moreover, manufacturing businesses often work on tight margins and have a large overhead, making operational efficiency and risk management high priorities.

Here are three ways you can grow your manufacturing advisory practice.

1. Streamline your onboarding process

A systematic onboarding process is pivotal in establishing a solid foundation for client relationships. It should be thorough, yet efficient, covering everything from initial data collection, to setting up communication channels and aligning expectations. Onboarding is an advisor's opportunity to showcase their organizational skills and attention to detail—qualities manufacturing clients highly value.

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Manufacturing clients often have complex supply chains, multi-tiered compliance regulations, and ever-changing technology. Understanding these characteristics is crucial for firms to offer actionable solutions.

Before taking on a new client, it's crucial to undertake a rigorous assessment of their file from a bookkeeping and results perspective in order to gain insight on the company’s financial health. This may include reviewing the Profit & Loss and Balance Sheet month-over-month, bank reconciliations, and journal entries. In addition, a careful examination of how payroll and marketing expenses correlate with revenue over time can reveal whether the company is improving in key areas, while a ratio analysis can pinpoint areas for potential improvement. In terms of cash flow, assessing whether the business is generating sufficient cash to support growth and operations is another vital consideration. All of these factors collectively help in making an informed decision about the prospect's viability as a long-term client.

2. Optimize systems, processes, and structures for project profitability

The growth of an advisory firm is contingent on robust structures and processes. This includes developing standardized procedures for service delivery, investing in staff training, and employing technology for operational efficiency. Well-defined processes not only increase productivity, but also ensure consistency in the quality of service provided.

Growth-oriented firms must continually refine their sales processes. This means deploying a consultative sales approach, where the focus is on the client's needs rather than the firm's services. Streamlining the sales cycle with CRM tools, improving lead qualification, and tailoring sales strategies to manufacturing industry trends can significantly boost conversion rates. A full assessment should be completed prior to proposing fees. Consider the conversions, implementations, and workflow design, as well as the advisory function required for the project. Review the engagement regularly to keep the fees up to date.

The profitability of advisory projects can often hinge on effective scope management and resource allocation. The use of project management software and detailed tracking of hours can be invaluable in this context. Set clear expectations with the client by laying down time budgets and communicating clearly. In order to achieve this, a good structure for procedures and reviews should be in place, as well as a dedicated, talented team with individual expertise.

3. Provide best-in-class advisory

A successful relationship between the client and advisor means that their business is growing, goals are met, challenges are mitigated, and there is mutual trust. The advisor needs to be able to not only report findings and provide solutions, but also forecast and make creative recommendations based on their assessment. Learn about the client and their business, research competitors, and stay ahead of compliance and regulatory changes that could affect the business.

Best practices for budgeting and forecasting include an annually locked budget for profit and loss, balance sheet and cashflow; a monthly rolled forecast; and a monthly budget to actuals variance analysis. For clarity and organization, use classes in QuickBooks for department or project budgets.

Track key performance indicators and set targets related to goals, and report on these monthly by reviewing trends. As a best practice, manage inventory well by identifying bestsellers and testing the market carefully with new products, monitor gross margin percentage by product and consider volume discounts from vendors, and invest in good marketing support and team. Limit KPI focus to under 10 areas, and as results improve, adjust the targets or review other KPIs.

In it to win it

A manufacturing advisory services firm can flourish by choosing a specialized niche, understanding the unique needs of manufacturing clients, offering tailored solutions, managing projects efficiently, and rigorously assessing potential clients. The blend of industry-specific expertise and a robust client assessment process ensures the firm is attracting, and effectively serving and retaining, high-value clients.

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