Ronald Recardo founded The Catalyst Consulting Group in 1993. He brought to his consulting firm 30 years of experience as a former executive at Johnson & Johnson and Fidelity, a senior level consultant with Arthur Anderson & Co, and he had completed projects for over 130 companies ranging in size from startups to the Fortune 10. Today, Catalyst has a staff of 10 consultants who work with companies to help them grow, improve performance and address human resources issues.
(Photo courtesy of Ronald Recardo)
It hasn’t all been smooth sailing. “We were experiencing very intense competition from two sides,” says Recardo. “International consulting companies were going down market and targeting smaller projects in an effort to bolster their lagging revenues, and interim staffing companies were attacking us from the opposite direction. The interim staffing companies had databases of C-Suite executives who were displaced from executive roles and were unable to secure employment in corporate America. They provided a very lost cost alternative to our targeted markets while the international consulting companies had a much stronger brand.”
Catalyst put their business acumen to work to reposition their space in the market. Recardo outlines the three strategies they employed:
- We modified our pricing to include a value pricing option that appealed to many emerging companies. Instead of paying our normal rate structure, selectively we would discount our rates in lieu of either an equity stake in the company or a percentage of the savings we identified. The benefit to the client was there was less impact on their cash flow, and we were tied into generating a tangible result.
- We developed a number of products to augment our services, which provided passive income with no additional cost of sale. Examples included licensing methodologies and toolkits.
- We established strategic alliances and partnerships with other companies where we created demand for each other but did not compete. [For instance,] there are companies that only do organization assessment and surveys, but do not offer consulting to address problems identified. We could direct work to them, and after completing a survey, we could provide services to address their client’s problems. We also developed relationships with two executive search firms. When our firm did mergers and acquisitions work, we would generate searches for them, and they would leverage relationships for us to generate consulting.
According to Recardo, implementing these strategies had the net effect of increasing revenues by 23 percent and profitability by 14 percent.
This article was written by Gillian Burdett for Small Business Pulse