All consulting companies for e.g. XYZ IT consulting always target the established companies like HP, Cisco, Walmart etc. for business and revenue. This is very good and may be the only approach to get consistent revenue (a.k.a bread and butter) YOY and add established clients to the portfolio of XYZ company, but over a period of time the growth of these established companies slows down or stalls completely due to various reasons like management changes, nation’s political changes, no new products, competition from new startups etc. And that in return reduces the revenue of companies like XYZ who have been seeking business from these established companies.

Problem:

The question is how to find new opportunities for biz growth and add a new stream of revenue YOY for company XYZ IT consulting. There may be many approaches to this problem and I would like put forward my idea.

Idea 1: This is interesting and methodological way to increase revenue.

Follow the pattern of Venture funding of a given nation for a given year to establish a plan for our sales team. In my example I have taken investment funding of USA.

In year 2013 in USA the Venture capitalist invested 13 billion dollars in US companies that was up by 57% compared to 6 billion in year 2012. These number are published every year by known sources in corporate world.

This number of 13 billion dollars will make more sense when we see the breakup of where this money went, for us to decide which new regions and the new companies within those regions and their technologies we should target to seek new Business for revenue.

Funding breakup by region: Provides us guidelines on where the funding was allocated region wise in 2013.

Region Approx &tage Approx.Doller
Bay Area 55 7.1 Billionr
Northwest 3 411 Million
North Central 1 135 Million
New England 10 1.3 Billion
Colorado 1 151 Million
Midwest 4 479 Million
Washington DC 2 247 Million
Southern California 6 761 Million
Southwest 1.5 219 Million
Southeast 2.5 364 Million
New York 9 1.2 Billion
Texas 3 354 Million
All others 2 253 Million

    Funding breakup by Industry:

Provides us guidelines on where the funding was allocated industry wise in US and within that Bay area allocation.

Industry US%tage Bayarea %tage
Software 46.7 57.5
Biomedical , Health 19.8 12.8
Finance 8.4 6.3
Media, Entertainment 7.9 8.7
IT Services 5.8 3.6
Industrial , Energy 5.7 5.7
Electronics Hardware 3 3.5
Networking , telecom 1.5 0.6
Semiconductors 1 1.3

If you look at the table above Bay area has received more than 50% of funding allocation and New York around 10%. This has been the case from past 8 years that I have been observing these funding split. This gives us the fair idea on which region and within that region which industries the company XYZ should plan its strategy for growth based on its existing competency and to also build new competency to match the changing industry for new revenues. It also give XYZ enough information to study and find out which regions have less competition to go after.

After thorough analysis if XYZ IT consulting is able to place at least 1% of its work force in these new emerging startups and that 1% grows 100% in team size every next 2- 3 years then we are set in our goal for additional revenue of YOY and in that journey some startups may become a another HP , Cisco , Facebook or Walmart and if that happens then XYZ’s growth will be exponential , but that is only possible if they were able to build a relation with that startup at right time else it becomes very difficult later on. It is like if someone bought Facebook share at $20 three years back, then it would have become $120 today V/S if someone bought Facebook at $98 one year back then it would have become $120 today.

The other point that comes out of this is if we are able to get into these new startups early on and if some startups show good potential and product line then XYZ can also become there investor in next line of funding and that will bring additional revenue.

Idea 2:

XYZ IT consulting expands it managed services relation with established companies by adding new verticals of managed services that are not software oriented like providing services of managing the GYM, instructors, Yoga trainers etc . Employee health is tied to employee’s medical insurance rates and companies want them to be fit.

Managing the cafeteria end to end , managing travel of employees end to end Established companies spent billions in food , travel and Health/GYM industry .

This would be another soft growth vertical with established companies.

I hope I was able to convey my idea with proper examples.

 

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Jetender Vilku

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