Many people think you can’t get to $1 million in revenue in a one-person professional services business. Chad Patschke has proved them wrong.
Patschke brought in just under $3 million in annual revenue—with about one-third of this in profit—in 2019 in his solo consultancy, Ethos Mechanical Integrity Solutions in the Austin, Texas area. It helps companies that handle hazardous chemicals avoid explosions and fires. In doing so, he joined a small but growing group of entrepreneurs who are breaking $1 million in non employer businesses, firms with no payroll. The number of solo firms and partnerships hitting $1-$2.49 million in revenue in 2017 rose to 36,984—up 38% since 2011, the U.S. Census Bureau found.
Patschke has found himself so busy with work from former corporate contacts—he’s booking projects six to nine months in advance—that he hasn’t been able to get his website launched, even though he founded the company in September 2014.
“I’ve been trying to finish it since I started my company,” he says.
Chad Patschke built a nearly $3 million consultancy by welcoming senior-level professionals to his … [+]
Ethos Mechanical Integrity Solutions
Granted, he has a lot on his plate. He and his wife, Stephanie, who runs a small propane distribution company, have five children in their blended family, with four in college at the moment. The family experienced a major tragedy in 2015, when his ex-wife, and the mother of his children, was murdered by a stalker.
Against this backdrop, he has achieved revenue many self-employed consultants only dream of, thanks to a resilient mindset and his scalable, agency-style business model: He goes after projects by submitting proposals and farms them out to 15 expert subcontractors, charging a markup. All of them are contacts from his earlier corporate career or were referred by his subcontractors.
In a break with the many companies that have made age discrimination part of their business models, Patschke, 50, has thrown out the welcome mat to senior-level professionals—a group often squeezed out of corporate America—recognizing the depth of knowledge they bring to his team.
Most of Patschke’s team members are 60 years old and up, with a couple in their mid to late 50s. He bills them out at $150 to $300 an hour, depending on their specialties. His highest-paid, most in-demand consultant is a 75-year-old who commands $300 an hour.
“He’s the founding father of what we do,” says Patschke. “He still loves it and wants to get out there. He’s traveling just about every other week.”
So how did Patschke get to nearly $3 million in just five years? Here are his strategies.
Bet on experience. One thing that has helped Patschke scale the company rapidly has been finding the right subcontractors, so he doesn’t have to do all of the work himself He looks for pros who are recognized in their field as experts and have 30-plus years of experience.
“It’s my business model,” says Patschke. “I want the highest level of expertise representing our methods. That’s how we bring in clients who don’t care what it costs.”
Keep the talent pipeline open. Patschke always has an eye out for corporate contacts who are ready to transition to the world of independent work. He’s always ready to spring into action when former colleagues and clients reach out and tell him, “Hey, this person is about to retire. He’s really good in his field. He’s interested in doing some work.”
Typically, he’ll bring these already well-trained consultants on a project with him, show them how he likes work and how he wants client relationships to be handled and observe their soft skills, so he can determine if they are a good fit for the company.
“I’m not evaluating their technical competency,” he says. “It’s the interaction with the client. When you’re coming in and telling someone who has spent hours trying to develop a safety program that you have found gaps in it, you have to present it in a certain way without making them upset. It’s being able to communicate those opportunities for improvement or gaps within their program without upsetting the client that I’m evaluating and coaching them on.”
Because of the experience and expertise of his team, Patschke has very little people-managing to do.
“One of my colleagues says it’s like coaching the New York Yankees,” says Patschke. “You just turn them loose and watch them play. They deliver an exemplary performance every time.”
Working with senior professionals has also had an unexpected benefit: It gives him some flexibility on cash flow. Many of them live on pensions and retirement accounts, so if Patschke has to pay them in 35 or 40 days instead of 30, as he waits for checks from clients, it doesn’t disrupt their lifestyles. “They’re doing this because they want to stay engaged in this industry,” he says.
Set up your business properly. In a safety-driven business like Patschke’s, it is important to be prepared for the unexpected and protect yourself from liability. Beyond forming an LLC (cost: about $300), he purchased general liability insurance and errors & omissions insurance through his trade organization, the American Institute of Chemical Engineers.
He covers his subcontractors under his policies, saving them the hassles of getting coverage on their own. “They get to go out and do what they love and what they’re passionate about,” says Patschke. “I handle all of the contracting, invoicing and things like that.”
Make the most of inexpensive technologies. Patschke uses FreshBooks , an invoicing software, to bill clients and Zoho Expense, an expense report software, to keep track of travel expenses and the like. Subcontractors have their own log-in for Zoho Expense and submit their expenses there, which he passes on to the clients.
As for marketing, he relies on posting on Linkedin and Facebook. One big hit for him has been his “Office View of the Week,” where he posts a picture on the social media site showing a view of one of his jobs, without revealing the client for privacy reasons, or of the downtown in a city where he’s traveled. He has found more clients coming up to him at conferences and inquiring about his work as a result.
“It lets all of my clients know how busy I am and what kind of work I’m doing,” he says.
One of his goals for the year is creating a YouTube channel, where he’ll feature one five or 10 minute video each month looking at trends in the industry, safety gaps he’s observing and other topics. He’s planning to connect it to his “Office View of the Week.”
Find ways to create “mailbox money.” With a very demanding travel schedule, Patschke is looking to find new ways of bringing in revenue that lands in his mailbox without requiring him to leave home. To that end, he is working on productizing his knowledge in a two-day video course for industry professionals, in partnership with a media company that will take a cut. “I’m hoping that turns into something substantial and will put my face in front of other potential clients,” he says.
All of this keeps Patchke busy, but he wouldn’t have it any other way. He loves the work he does and gets a lot of personal validation when industry contacts come up to him at conferences and thank him for pointing out safety gaps they’ve overlooked.
“When you get a compliment, it gives you a sense of contribution to the industry,” he says. “You never know if you’ve saved lives but that’s our goal—to protect the employees and the environment.”
His highest-paid, most in-demand consultant is a 75-year-old who commands $300 an hour.