The Inside Look at Starting a Consulting Firm
Updated: Sep 15, 2022
with Josh Tan, Founder Alchemist Consulting
Alchemist Consulting is Josh Tan’s consulting firm working specifically in the alloy and molten metal space. Josh has a lot to share when it comes to working in a specific niche and opening an independent consulting firm. We discuss competitive analysis, what to avoid when starting your business, and effective growth strategies.
Notes from the Show
Consulting Firms are a growing field in the workforce. Josh Tan of Alchemist Consulting joins me today to discuss his journey now 3 years in of beginning a consulting business in a unique niche. Josh works with leaders in the molten metal space, alloy makers and manufacturers.
From working with Fortune 500 companies and top producers in the alloy manufacturing space, Josh was bitten by the bug to become an independent force in his area of expertise. He began his business with an aggressive growth strategy and although this came from an intrinsic force, he shares some tips on what to avoid when starting a consulting firm.
Being Everything to Everyone
These two mistakes can prevent a strong, confident start. He advises future business owners to take action and not limit themselves to perfection. He also highlights the importance of focus to build your business. Like many entrepreneurs or beginners in a new self-run company, Josh started with a more open base of offering for his clients and prospective clients. Sticking to his advice of not being everything to everyone, Josh, after working with enough alloy foundries, felt he had filled a niche with a significant amount of his personal experience through that work allowing him to focus down and own his credibility in the space.
When it comes to growth, marketing and sales, and customer acquisition for new consulting firms, Josh relies on networking and LinkedIn content. Josh has been posting strongly on LinkedIn for about a year and has seen success. He says the key is consistency and posts with “tip of the iceberg” problem-solving for ideal clients. This July, Josh is excited to test out a new outreach strategy to work conjunctively with these two.
In the Alloy and Metal space, Josh works with businesses who are looking to grow their business, exit their business, and acquire or be acquired. He reminds businesses that everyone wants a growing business and no one wants a shrinking one. With Alchemist Consulting, Josh empowers a company's existing team to deliver results that improve their vulnerabilities such as process production, staffing, and cash flow. If you want to learn more about Josh Tan, you can find him via LinkedIn, Email, or through his consulting firm website.
Why should you set aggressive growth goals?
What to avoid when you’re opening a consulting firm.
Why focus and niche provides credibility to your business.
What strategies can you adapt to increase efficiency and grow your business?
Mentioned in this Episode:
Transcribed by AI Susan Tatum 0:36
I'm here with Josh Tan, who is the founder of Josh Tan Alchemist Consulting, which is a really interesting name for a company. And we're going to ask him about that. Welcome, Josh.
Josh Tan 0:46
Hey, Susan, thanks for having me on your show.
Susan Tatum 0:49
Really glad to have you here. You want to take just a few minutes and give us the what do you do and how you got there kind of thing?
Josh Tan 0:58
Yeah, absolutely is a great way to start the show. I am a management consultant for small and mid sized manufacturing firms, typically, and specifically in the space of metalworking. And what I do is I come in and I help them improve their production and scrap issues, their labor and workforce issues and their management issues. What I do inside of these businesses is help them improve their overall efficiency or productivity, profitability, a lot of ity's in here. And overall, it's really if you're looking to grow your business, and possibly exit or acquire another business, my skills are designed to systematize you and have you grow, as well as receive a high valuation on the market.
Susan Tatum 1:54
So metalworking, that seems kind of a niche.
Josh Tan 1:58
Yeah, so you asked how I got here, right? I caught what they call the foundry bug in my industry, which is working with molten metal. And I started that when over a decade ago, and I've been in that industry ever since. And basically started my own consulting firm, it was really looking at where I have the most expertise, the most notoriety or the most notoriety and how I can serve that industry first, right. When you look at your history, where you come from is really where you have the lowest barrier of entry.
Susan Tatum 2:37
Well, it's kind of instant credibility, isn't it?
Josh Tan 2:39
Susan Tatum 2:41
It helps it anyway. Yeah. And so you and your former life, you must have worked with some molten molten lead is that which is our molten metals.
Josh Tan 2:39
molten molten metals and alloys? Yeah.
Susan Tatum 2:56
That's the alchemists.
Josh Tan 2:58
That is the alchemist turning lead into gold.
Susan Tatum 2:59
I like that. What let's let's talk a little bit if you don't mind, you just said something interesting about how you're you, you work to help companies with mergers and acquisitions, or how they how to get the most out of their businesses and an exit strategy. Which seems very different from process improvement when I think of process improvement in a manufacturing plant. Which would be like making the line run more smoothly or supply chains or, correct me if I'm wrong, but that's where my where I go. Let's stick with that. Then how does that affect the ability to get the most money for your company?
Josh Tan 3:45
Yeah, one of the most basic ways to evaluate your company for a sale price, right, is to look at your cash flow, month to month. And that you spend the resources to have a more efficient line by doing things like continuous improvement, lean manufacturing, retraining your workforce, right, hitting your KPIs, as long as you can move more to the bottom line, month to month, that is one way to increase the value of your company.
Susan Tatum 4:19
So you said that your work increases efficiency. That's how it gets to the bottom line, because you're more efficient. So there's more left in the in the profit column.
Josh Tan 4:33
Susan Tatum 4:35
Makes sense to me. So what made you take the leap from because you worked for some big companies, didn't you?
Josh Tan 4:44
Susan Tatum 4:45
To care to name them.
Josh Tan 4:46
That's all on my LinkedIn. It's okay.
Susan Tatum 4:50
Say he's driving his listeners. He's driving you to his profile. This is very smart.
Josh Tan 4:57
I worked with Fortune 500, as well as top five producers in certain certain certain niches inside the alloy space. Yeah.
Susan Tatum 5:08
All right. What made you decide to go out on your own?
Josh Tan 5:11
Really, it's chasing you know, the age old American dream, right? Work for yourself, make your own rules make, make more money. Work on a laptop from a beach somewhere, as you can clearly see by beaches white sand
Susan Tatum 5:28
for those who can't see what he's pointing to. It's a whiteboard. I believe in the background
Josh Tan 5:32
white sand beach
Susan Tatum 5:36
should have drawn a palm tree on it at least
Josh Tan 5:39
Susan Tatum 5:40
There you go. There you go. So you've been in business three years?
Josh Tan 5:47
Susan Tatum 5:47
So do you. You've been in business for three years. And you have from the first time that we talked some very aggressive growth goals, like Forex, kind of aggressive growth goals. So how did you get to the point where you feel really comfortable? Saying, that's how fast you want to grow?
Josh Tan 6:10
Wow. Well. You know, it really comes from an internal, like an internal state. Where, firstly, I do believe it's possible. And I completely, totally believe it's possible. And then it's from that internal state of like, I have the skills I know how to do it, or how to build a team around me, I know how to get help. It's really where do you set? Where do you set the goal? And for me, that that just came to Forex. For some people might be 2x, you know? So for me, that's just how I said it, it comes from that certainty. I've made enough mistakes along the way. I've done a lot of iterations along the way. So it's kind of like, all coming together now.
Susan Tatum 6:59
So what would you I'm thinking in terms of tips for people who have businesses that maybe are not yet at the point where they can think about a Forex? Or? Or they're, they're just getting started? Or maybe they've been around a while? What? What can you help them avoid?
Josh Tan 7:25
Great question, how can I help people just start a consulting business avoid?
Susan Tatum 7:30
Well, yeah, that's yeah, let's go with that.
Josh Tan 7:32
Well, I would definitely say like analysis paralysis kept me stopped for a long time, trying to get everything like Right, like to the tee, right? Like, I have to have the best marketing plan before I could start it. That's not true at all. It's like any marketing plan is will work to some degree, right. It's like, I had to have the best copyright and I had to have the best social media, how to have the best website, I have to know exactly like, what to do, where to do. All of that. Perfectionism was a huge stop for me for a long time. Other than that, I would say, don't try to be everything to everyone.
Susan Tatum 8:19
You mean, like focus,
Josh Tan 8:20
try to focus down, you can call it niching down, you know, focusing down but trying to be everything to everyone, you know, you start racking up a couple of losses or a couple of like Miss sales calls and next thing you know you're really demotivated because it's been a couple of months, and you're trying to go hungry, right? So yeah, don't try to be everything to everyone. Don't worry about perfectionism. Action always beats theory, in my opinion, in my experience,
Susan Tatum 8:56
yep. So these are kind of, I can see how this could be conflicting in the type of thinking that you have to do because you talked about perfectionism, you had to be the best. And the way you describe that was very much I think, like a process person. Because every little thing along that process needs to be the best it can be right. So then you get into working for yourself. You naturally brought that along.
Josh Tan 9:30
You're picking up a lot. Yeah.
Susan Tatum 9:33
So I think it's really interesting that you so you didn't just go say, I do this, this work really well. I know what I'm doing with this work. I'm going to start a business without thinking through the other parts of what was going to have to be done.
Josh Tan 9:56
I don't understand the question.
Susan Tatum 9:58
Okay. You you talked about that in the beginning, you looked at you looked at things that you weren't necessarily good at but you knew where to go to get help. And I think that there are a lot of folks that do start consulting businesses. Without thinking about that, they just think Well, I am an expert in XYZ people are going to hire me and okay, maybe you have to send out some invoices but nothing beyond that. But you strike me as somebody that really thought it through more carefully.
Josh Tan 10:39
I think you're seeing the end product. And I might not have had all of that at the beginning, where where some of the harder lessons have been learned, right. But now looking back, it just makes a lot more sense lots a lot more strategic. You know, it's a lot more focused.
Susan Tatum 10:58
So let's talk about not, don't try to be everything to everybody because that's, that is a that is near and dear to my heart. How when you first started, were you always thinking you were going to focus on metal working, manufacturing, metal, metal work manufacturing,
Josh Tan 11:20
I had more open at the beginning. And then, after working with a number of businesses and working with more metal foundries, alloy foundries, I was like, Okay, this is more of what I've been doing, which comes with a certain level of expertise. And at the same time, it comes with a certain level of like, I'm not doing something like brand new. And I think a lot of people, and business owners specifically, are caught with chasing like new ideas that they haven't gone and perfected one idea yet. So here I am perfecting my own craft, really?
Susan Tatum 12:01
How did you? How did it feel when you're picking a niche, I guess, or making yourself sort of narrow your focus?
Josh Tan 12:20
How's it feel?
Susan Tatum 12:22
Josh Tan 12:23
It always feels like I could be doing more. Right always feels like, Oh, I could be in so many more places. Or I could be working with so many more companies and like, what if it doesn't work out? Right? That's how it feels. And at the same time, you have to step outside of your reptilian brain around like what could go wrong, right? And like to go wrong, and look at all the things that could go right. And then you have to look at that. And I'm like, well, like you said, I do have credibility here. I do know exactly what I'm talking about. I do know, so many things that other people don't. I am an expert in this area. So there's this. At first, I would say it's gone now dissipated at first to choose a niche, which happened maybe a year ago. It was like, kind of scary. You know, what if it doesn't work? What if I fail? What if I should have been doing something else? Right? What if I miss an opportunity, because we always have the end in mind, right? Like, I want to be this guru, this Tony Robbins type of person, right? I want to be this voice and this leader, but we don't know where to start. And we worry that like going left, at stage one, or the first step will lead us to the end. At least that's my experience with humans and myself included. So it's really a reframing of the mindset of like, what's everything that could go right?
Susan Tatum 13:56
Yeah, that makes sense. You know, I think it's so logic would tell us that, just because you're picking a niche now doesn't mean you're stuck with it forever. But the emotion says, Oh, my God, I'm gonna, you know, it's, this is wrong. And I'm gonna make a mistake, and I can't do this.
Josh Tan 14:16
Susan Tatum 13:45
So I think the best thing, that if, if I were to give advice, which, which I often do, sort of in this area, but I would say you know what, you're going to make a mistake, you're going to pick the wrong thing. At some point, we all do. And you're going to say, Oh, maybe I should have been over there. And then you just move in that direction. But the more focused you are, the more the faster you'll succeed or not succeed, and know what changes that you need to make.
Josh Tan 14:50
I love that you added that on there. Right? Like, you might not, but then you'll have a new thing. You'll know where to go.
Susan Tatum 14:56
Yeah. But I mean, you talked about analysis paralysis, I run across so many people that can't, they can't even pick a target market for for campaign, you know, or, or an outreach effort. And I think it's a very human thing. But time and time and time again, you see the people that do that, that do make that gets to take that focus, they succeed.
Josh Tan 15:22
You know, one of my mentors always tells me that, like success is just beyond how far you can stay focused, right? It's just like, how far can you go stay focused and like one little sliver of the pie for longer than anyone else.
Susan Tatum 15:39
That's an interesting analogy I have I haven't heard that one before. But that so then that leads to you becoming the expert in that area.
Josh Tan 15:46
I would like to think so the expert I like the sound of that.
Susan Tatum 15:50
Unfortunately, there's so many people that call themselves that when they aren't really can become meaning. You got to have your, your clients and the world around you calling it Josh is the guy to go to.
Josh Tan 16:07
I gotta get I gotta get, I gotta get some reviews read.
Susan Tatum 16:09
There you go. That would definitely work. Well, so one of the things that we talked about before, because it's kind of my area of interest, and it's it's so important for every business is, how do you grow the business? And what do you do for sales and marketing? And what do you do for prospecting, and getting new clients?
Josh Tan 16:34
So are you asking me specifically what I
Susan Tatum 16:38
will you share what you because I think you did a lot of looking into it, maybe experimenting with it a bit. And once you've arrived that now, what are the important things?
Josh Tan 16:50
I would say the important things now for me are networking, creating content on LinkedIn. And I'm about to test a third strategy, starting in July. So I think that 3rd strategy will be basically an outreach strategy. I think that will be the a nice addition to my strategies.
Susan Tatum 17:14
So you've got your marketing, which is the LinkedIn posting stuff. Do you find that the posting on LinkedIn, does that? Bring is that drawing people into you?
Josh Tan 17:28
you know, for posting, it's, yes, it has. And it's about being consistent with the same message over and over again. And it's about adding value. And solving problems, like or at least giving the tip of the iceberg? This is how you can solve a problem. Right? And yeah, it has brought people inbound.
Susan Tatum 17:56
And you've been doing it for a couple of years.
Josh Tan 18:00
LinkedIn really strong for about a year.
Susan Tatum 18:07
Do you is your your expertise are there? Is it competitive? Are there a number of other consultants that claim the same?
Josh Tan 18:16
Susan Tatum 18:16
Josh Tan 18:17
I haven't seen anyone and I did do like a competitive analysis, if you're gonna start your own consulting firm or coaching firm, definitely do a competitive analysis. Plug. And I haven't seen anyone that's doing exactly what I'm doing. And I think that's a huge benefit.
Susan Tatum 18:40
Yes, it would have to be, especially if what you're doing is in demand, people really need it. And they've got if the demand is better than the supply, you'll always be in a better boat, I think. What do you think was the most challenging part of the first three years?
Josh Tan 19:02
Let's see the most challenging part of the first few years? Well, I mean, you mentioned a few things, right? Choosing a niche, choosing a market, choosing a message, choosing a service, really like choosing. And then there's this internal battle that goes on around like, am I actually good enough to deliver what I say I'm going to deliver? Right, like believing in yourself?
Susan Tatum 19:30
Yeah. What about the imposter syndrome?
Josh Tan 19:31
Imposter syndrome? Exactly.
Susan Tatum 19:34
Do you find that your is it? You used to work for these larger companies. So you're surrounded by big teams and a lot of resources and then you come out and you're Josh Tan? And you've got a network, but it's really all kind of you that you're relying on does that? How did that affect you?
Josh Tan 19:55
Well, I think it's really important for consultants to know that they're not alone, when they go into a business to work with a business, right? Like that businesses, internal resources are effectively part of your team.
Susan Tatum 20:12
Oh, you're talking about the client?
Josh Tan 20:13
Yeah. The clients and the resources are part of your team. So I really work to empower the people that I'm working with to deliver the results.
Susan Tatum 20:24
That is a really good point, Josh.
Josh Tan 19:55
Yeah. Because one person show you can't do it all. It's not it's not possible. Well, I don't know. I don't care who you are it's not possible?
Susan Tatum 20:38
Yeah. Yeah. Is it that's a, I think a really good approach to consulting as well or external prop problem solving is to realize I mean, Strad someone said to me that strategy is really about figuring out the best way to use your clients resources.
Josh Tan 21:00
Mm hmm. I can see that. Yeah.
Susan Tatum 21:01
I thought it was a pretty good one. Well, what, what should we talk about that we haven't talked about? This has been really interesting.
Josh Tan 21:07
Well, you know, if you're a small manufacturer, so I want to highlight that I work with manufacturers, not just metal makers. And if you're a small manufacturer, or small mid scale, and you're looking to grow or looking to exit your business, there are a number of things that you should be doing now, to start to prepare for that,
Susan Tatum 21:32
Josh Tan 21:34
number one is improving the process the production process, right, improving the process and documenting the process. So you want to do a few things like, really, if you're looking to exit or be acquired. And this also goes, if you are acquiring a business, you want to look for where the vulnerabilities are. And one of the biggest ones are documentation and processes, right? Most people are just pushing buttons, turning knobs, swinging hammers right inside of the manufacturing world. And if you were to buy a business, or if a business were to buy you and your workforce were to walk out, that would be a huge loss where you wouldn't be able to produce, right. So you want to look at vulnerabilities such as your production process, your staff, right, including your leadership, are they a, an exit or a flight risk. And you want to prevent against that. And then you want to do whatever you can to make your cash flow healthy. And there's a lot of Su little, little secret plays you can do aside from becoming more productive and more efficient and dropping more down to the bottom line there. You know, there are things you can do with your lines of credit with your vendors and providers. To show positive net growth month over month, and if you can show that for two years, you can exit at a much, much higher multiple.
Susan Tatum 23:10
It's also not a bad way to keep your business in business.
Josh Tan 23:13
Yeah. Remember, everyone wants to buy a growing business, nobody wants to buy a shrinking business.
Susan Tatum 23:19
Right? Do you do you think that? Well, I'll say I think you were talked about the importance of documenting your processes, making them more efficient, continuously, and really, really documenting them. And I think that some people really got hit with the problems of not doing that, during the Great resignation, or whatever it is that we're calling it now where a lot of the workforce was lost. And cash when you think about finding new people training new people, and then you got to train them on a process that hasn't even been documented. You can't just like plop them in there, the amount of money that could cost a company is just crazy.
Josh Tan 24:06
Oh, yeah. It's through the roof. One of the biggest problems, that's going to be I'll say, haunting the industry for the next 10 years.
Susan Tatum 24:16
In what way?
Josh Tan 24:16
so the great resignation that you spoke about, they're projecting that we won't have like, a real solution to that for about 10 years. So lack of workforce number one, and then undocumented processes and people and people that can't come in and just pick up where you left off is going for a long time.
Susan Tatum 24:40
In addition to the supply chain itself, the non labor supply chain,
Josh Tan 24:46
in addition to that, you know, and then you know, they're looking at unique solutions, like automation, and whatnot. But then that comes with a whole nother set of problems.
Susan Tatum 24:57
So seems like there's plenty of business out there for you, Josh.
Josh Tan 25:04
Knock knock. Here's my phone number.
Susan Tatum 25:07
All right, yeah. Any manufacturers that are listening, you better get to him fast. He's not going to be available long.
Josh Tan 25:12
Susan Tatum 25:12
Well, thank you so much for for being here today. I think that this was everything I hoped it would be and very valuable to the listeners, whether they're in manufacturing or not.
Josh Tan 25:25
Excellent. I hope there are some manufacturers listening. And if you're assigned a consulting business, I hope you consider that as well.
Susan Tatum 25:33
So how do they find you?
Josh Tan 25:36
You can find me at Josh@Joshtan.net. That's my email. And I'm also Josh tan J-O-S-H T-A-N on LinkedIn, best way to reach me.
Susan Tatum 25:48
All right, fantastic.
Josh Tan 25:49
Thank you, Susan.
Susan Tatum 25:52
It was good talking to you again and take care of yourself.
Josh Tan 25:55
You too. Thank you. Bye