Professional service firms seeking new markets have to plan in 3-D. No glasses required.
Our firm has adopted the paradigm that defines a market as always having at least three dimensions: geography, services, and clients. Any new unique combination of these three dimensions is technically a new market for us.
(An emerging qualifier is that a critical dimension for new market expansion is an available supply of talent.)
A company must understand clearly how many dimensions it intends to assault at once in seeking a new market. Just tackling a new geographic market challenge is no small task in itself without compounding that challenge by also seeking new clients, offering a new service, or adding all new staff, or talent, in a new location.
MacKay Sposito’s expansion experiences over the past five years have been varied and have helped us develop an informed recipe for success to expanding into new markets, geographic or otherwise. During that time, our firm has stretched from three regions into five while expanding our three core services areas to five. Three of our firm’s current top-five clients are new to us within those five years.
We used to venture into new markets by leading with the services we provide. Today, our growth is not about what we do or where we do it. Now it’s all about who we want to serve or — a better way of saying it — who we believe we can help. For MacKay Sposito, those growth opportunities are with companies in energy, land development, and public-works markets.
My experience suggests that if you want to expand into new locations and into new services, then don’t define your firm around these ever-changing market dimensions of location or specialty. Lead with what is consistent — that is, who you want to help.
Other important ingredients include seeking new markets with existing clients and with at least one existing staff member willing to relocate. It’s likely you have ambitious employees and a valued client or two looking to seek new locations, too. Seize these opportunities and simultaneously build client loyalty and retain up-and-coming talent. These frame the dimensions you are trying to hurdle and reduce risk.
In no particular order, here are my picks of potential growth market opportunities for professional services firms to explore:
• Rail (light, heavy, freight, crossings);
• Energy (generation, transmission, and distribution);
• Education (public K-16 and private vocational);
• Infrastructure (preservation, replacement, and new capacity);
My lens is obviously influenced by my civil engineering background, but I would argue these are all fundamental building blocks of our economy that have lacked significant public investment for decades.
Our society’s appetite and expectation for on-demand reliable energy, convenient access to goods, clean water, intolerance for congestion, and access to public education will eventually overwhelm our distaste for having to pay for those public services. Once we realize the longer we wait to reinvest, the more expensive the necessary investment will be, there will be a sustainable decade or two of opportunity swirling around these markets.
In my opinion, it is not a matter of if these markets will arrive, but when are we going to realize the need to invest in them.
Fear is a powerful motivator for any company, but planning for the next downturn is also smart for businesses looking to position for expansion. The downturn certainly provided us all a scary reminder of the risks of attempting to implement a rigid business plan against a cyclical market like construction and infrastructure development.
Rather than trying to time the next peak, I suggest you ask yourself what challenges will your clients (and prospective clients) face in the next down cycle.
Start thinking and planning now for what new markets will be attractive in the next recession and what your clients will need.
If you are willing to invest in growth, plan now how to sustain growth through the next cycle.
Tim Schauer is president and CEO of MacKay Sposito Inc., a Vancouver professional services consulting firm.