David A. Fields Consulting Group I’ve seen small consulting firms weather severe downturns on their journey to booming success.
On the other hand, more than one consulting firm’s revenue has plunged, plateaued for a year or two, then continued the descent into a total, permanent shipwreck.
If your consulting firm’s revenue is soft now, what does the next quarter hold? Are you in a temporary lull or headed for doom?
The five-question diagnostic below predicts whether your firm is going to crash against the rocks or is headed back to smooth sailing.
A 5-Point Diagnostic to Predict Your Consulting Firm’s Revenue Future
Question #1: Can your consulting firm reach new decision makers in your target market?
| Answer | Interpretation | Immediate Next Step |
|---|---|---|
| Yes | Your dip in revenue may be temporary. | Answer question #2. |
| No | You’re facing a brick wall. | Reexamine your target. |
Question #2: Do you have evidence that clients will continue to pay to solve the problem your firm addresses?
| Answer | Interpretation | Immediate Next Step |
|---|---|---|
| Yes | Your dip in revenue may be temporary. | Answer question #3. |
| No | You’ve been fortunate so far, but the ride is probably over. | Reexamine the focus of your firm. |
Question #3: Do you have evidence that clients will pay your consulting firm to solve their problem?
| Answer | Interpretation | Immediate Next Step |
|---|---|---|
| Yes | Your dip in revenue may be temporary. | Answer question #4. |
| No | Your firm’s positioning is choking your pipeline. | Reexamine your offering and/or your presentation of that offering. |
Question #4: Are you creating enough opportunities to hear about potential projects?
In other words, are you building visibility and engaging in a high volume of conversations with decision makers?
| Answer | Interpretation | Immediate Next Step |
|---|---|---|
| Yes | Your dip in revenue may be temporary. | Keep up your visibility building efforts …and answer question #5. |
| No | You’re in for a slog or disaster until/unless you prime your pipeline. | Ramp up your marketing engine…and answer question #5. |
Question #5: Are you closing opportunities?
Other than the past month or two, does your firm typically close at least 50% of the project opportunities you identify?
| Answer | Interpretation | Immediate Next Step |
|---|---|---|
| Yes | You’re temporarily caught in a revenue trough. This is the nature of sailing the consulting seas and is common to firms of all sizes. | You’re in a temporary lull. Take a deep breath and stay the course. |
| No | You have the potential to right the ship. | You need to pinpoint the weak spot in your closing process. (That’s a different diagnostic.) |
Even if your consulting revenue is strong, slightly modifying the questions above will help you determine how to accelerate your business development.
For example, modify question #2 to: Do you have evidence that clients will pay more to solve their problem than they’ve paid your firm for similar projects?
What does the five-point diagnostic above suggest about your consulting firm right now?
Text and images are © 2026 David A. Fields, all rights reserved.
Hi David, Very helpful diagnostic. Somewhat reassuring (which is good), but I think I need the “closing process” diagnostic. Thanks for all the great material you share! Belden
Belden, if your challenge is in closing, that’s good(ish) news. A long as you’re pursuing legitimate opportunities and just need to learn to land them, you’re in a much better place than those who aren’t in a position to win at all.
Keep in mind that your ability to close projects is mostly a reflection of what you do before you submit your proposal, especially during discovery (a.k.a. the Context Discussion).
I’m glad the diagnostic was helpful for you, Belden, and appreciate your feedback.
Thanks, David. This post took only a few minutes to read, but absolutely confirmed my suspicions and gave me a clear path forward. Love your work!
Outstanding, John. That’s the best possible outcome for an article: quick to process and immediate value generation. I appreciate your support letting me know the article helped.
My default assumption is always that we’re headed for doom. Reading this was reassuring. I’ll see a new AI tool and think, “that’s going to replace us tomorrow,” then realize it usually creates more demand for consulting, not less.
That default assumption sounds a bit exhausting, Steven… though, I bet you’re pleasantly surprised quite often! On the upside, you probably have a knack highlighting the ills and harms that can befall clients, and that is a very helpful trait for business development.
Either way, I’m glad the article was helpful, Steven, and that you let me know your reaction.
A follow on question to Question #3: Do you have evidence that clients will pay your consulting firm to solve their problem?
What is the appropriate evidence? It’s not like I have a front row seat to what deals the competition is closing. Competition I talk to always puts on the “everything is awesome” tune, even when I see them laying off people. I regularly see targets hiring subcontractors directly to do staff augmentation work we used to win as an add on to strategy work, and skipping strategy altogether – but that was the case in the past few years too, just seems more prevalent now. What is a good signal?
Fair question, Olga. The best evidence is your own sales history. Plenty of consulting firms push and push on problems they’ve rarely or never been paid to solve, or haven’t been paid to solve in two-to-three years or more. If you’ve been paid recently by some clients, but fewer than normal, than you’re most likely in a slump rather than heading toward doom.
You can (and should) also regularly ask your Network Core what challenges they’re paying outsiders to help resolve.
By the way, it sounds like you haven’t yet built deep trusting relationships with “competitors.” It’s worthwhile opening up and creating those honest relationships with peers. You’re in the same game and the market is so huge, that you can afford to be honest with each other.
Thanks for the smart question, Olga!