Visible Problems, Invisible Value: Challenges Canadian Entrepreneurs Encounter Marketing Intangible Services
Executive Summary
Canadian entrepreneurs marketing intangible services wrestle with familiar start-up issues like difficulty securing financing, navigating complex regulations, and ever-present competition, further complicated by the intangibility of their service offerings which cannot be touched, physically quantified, or in many cases, reviewed in detail due to non-disclosure requirements. Buying decisions are often based on trust, and talent (not capital) is often their most valuable asset. Fortunately, many of these problems are manageable through careful positioning, productizing expertise, evidence-based marketing, and smart pricing schemes. This article explains the major headwinds faced while marketing intangible services, why they matter for consulting firms specifically, and suggests actionable strategies that can help weather the storm.
The Canadian Small-Business Context
Small and Medium Enterprises (SMEs) dominate Canada’s business landscape, constituting 98.1% of employer businesses in 2021 (StatCan 2022). Notably, the highest proportion of SMEs by industry in Canada are in Construction (16.3%) and Professional, Scientific, and Technical Services (14.6%) (StatCan 2022). Given the size of the SME segment of the Canadian economy, SMEs typically represent both the primary market and the primary competition for new ventures, both in terms of talent and capital access. As a result, the realities faced by SMEs in Canada and the dynamics of the SME landscape directly shape go-to-market strategies, pricing, and access to qualified staff of new ventures.
Global economic uncertainty, primarily in response to the US-Canada trade war and persistent inflation concerns, have depressed the outlook of Canadian SME owners, with 46% (+9% Q/Q) indicating that high economic uncertainty would limit their investments in 2025 (BDC 2025). Additionally, Canadian SME owners report that low demand (24%, +4% Q/Q) and higher input costs (20%, +1% Q/Q) also weigh on investment decisions for 2025 (BDC 2025). In April 2025, 64% of SMEs surveyed reported that they expected the economic condition for SMEs to worsen in 2025, relative to 47% in January 2025 (BDC 2025). Taken together, the economic data indicates a reduction in confidence that SMEs will be able to pursue their intended investment plans.
Challenges Encountered by Entrepreneurs Launching Consulting Firms in Canada
Government statistics and industry research indicates SMEs remain the backbone of the Canadian economy, however entrepreneurs report difficulties securing financing, hiring and retaining talent, and market-access concerns when scaling (ISED Canada 2024).
Access to Funding and Cash-Flow Management
Recovering from the Covid-19 pandemic, 82.4% of SMEs reported requesting external financing, up from 47.1% pre-pandemic, primarily for non-residential mortgages, loans, business lines of credit, or other types of credit to finance operational cashflow requirements (StatCan 2022). Access to financing is increasingly difficult for SMEs, as global economic factors, residual effects of inflation, and increasingly tight risk tolerances of large lenders have tightened access to funds. According to data from the 2024 Biannual Survey of Suppliers of Business Financing, from 2022 to 2024, SMEs received a smaller portion of new credit relative to larger businesses, with the number of new loans issued to SMEs decreasing by 19%, while larger businesses received 14.4% more financing (ISED Canada 2024). Approval rates of financing requests for SMEs decreased 8% Y/Y, down to 72% in Q1 2025 (BDC 2025) and the dollar amount of the loans requested is increasing, with 37% (-12% Q/Q) requesting less than $100,000 (BDC 2025).
In addition to receiving a smaller portion of new loans, smaller businesses are increasingly required to provide personal guarantees for their loans as a prerequisite to receiving funding, with 25% of SME owners reporting that they were required to pledge their primary residences as collateral (ISED Canada 2024). These shifts indicate a trend of increasing risk aversion, tighter scrutiny, and more control being requested by financial institutions, resulting in less flexibility for entrepreneurs and more difficulty financing their ventures. These factors combine to create an environment where more SMEs are seeking out funding for cash-flow purposes, the quantity of loans issued is shrinking, and the covenants for the loans issued are becoming more conservative.
New consulting firms are most often owner-led and are typically cash-constrained. Unlike businesses marketing physical products who can pledge inventory or intellectual property as collateral for loans, consulting firms market intangible services and typically rely on receivables, reputation, and talent to secure funding, resulting in lenders being increasingly cautious with financing. From an operational viewpoint, constrained working capital limits growth, slows client acquisition, and delays or hinders investment in essential business elements, such as marketing and talent acquisition. Government loan and guarantee programs exist, but their scopes are typically narrow, and entrepreneurs must still navigate eligibility constraints, significant paperwork, and often slow disbursements (BDC 2025).
Regulation, Compliance and Procurement Complexity
Consultants working within highly regulated industries (healthcare, finance, public sector) must understand and adhere to procurement rules, privacy regulations (PIPEDA / provincial privacy laws), and obtain sector-specific certifications and security clearances to obtain contracts. Winning public-sector work often requires formal registrations, multiple rounds of pre-qualifications, and time-consuming procurement processes. In addition, increased scrutiny on consulting spend has raised visibility on how consulting firms price and disclose work (Auditor General of Canada 2023). Based on this report, the Auditor General of Canada concluded that although regulations and procedures governing the management and award of contracts to third-party consulting firms exist, significant deviations from these regulations and procedures frequently occurred, and increased scrutiny of these processes was warranted. As a result, the spotlight has been shone on ensuring compliance within the consulting industry for public sector contracts, increasing the difficulty faced by SME entrepreneurs in this space.
Finding and Retaining Talent
As a result of uncertain economic forecasts and the rising cost of living, among other factors, the Canadian labor market has been volatile in 2025. The consulting labor market has been no exception, with large firms restructuring and senior talent moving to smaller, more agile firms or startups. This shift in the industry represents both opportunity and competition: new firms may be able to attract experienced hires disillusioned with bureaucracy but must also compete with established firms and new boutique players for high quality candidates. Given the importance of talent in the consulting industry and its impact on credibility, hiring the right mix of senior/technical talent and flexible contractors is essential for new consulting firms (Business Insider, 2024).
Differentiation in a Crowded, Credential-Focused Market
Consulting is, fundamentally, a credential-focused service. Potential clients often have difficulty assessing the quality of the service offering, tangible effects of the advice given can be difficult to measure, and assigning responsibility for success to any one factor in the absence of the impacts of other contributing factors is challenging at best. New firms are particularly vulnerable to familiarity bias, where clients are much more likely to default to known brands or referrals than trusting a new player. This presents challenges to consulting entrepreneurs wrestling with establishing brand recognition and signing clients, especially since large global consulting firms and smaller boutique firms are heavily present in the Canadian market, creating intense competition (IBIS World 2024).
Marketing Intangible Services
Intangible services, like those offered by consulting firms, are difficult to quantify; you can’t see them, you can’t touch or feel them, and you often can’t directly measure their impact, but they produce tangible value to clients. Communicating this value to potential clients can be difficult, especially for entrepreneurs looking to attract their first customers who may not have previous project reviews or referrals. Focusing on communicating credibility through building brand awareness, professional contributions to the industry, and presenting a clean, organized image can build credibility and help entrepreneurs over that first client hump.
In the consulting industry, services are rendered through a process of interaction with the client, data discovery, analysis and dialogue, feedback, engagement, implementation, and follow-up. In service-based businesses, it is difficult to separate the service from the person delivering the service; the work must be done in person to ensure the client’s needs are met precisely; thus the service is rendered directly by a consultant. Accordingly, since individuals are unique, the service received cannot be homogeneous, as consultant’s backgrounds and specialties are all different, introducing variability into the final deliverables. Unlike a physical product-based company, consulting firms cannot produce and store their product to be resold at a later date, complicating marketing efforts.
Building Trust and Client Commitment
The relationship between the client and the consultant is one built on trust, respect, and mutual recognition of expertise. To build and nurture that relationship, it is important that the consultant remain authentic when communicating with their client, prioritizing honesty, openness, and collaboration. Authenticity also extends to how the consultant deals with dissent, voicing their opinions, and exercising their authority in communications with the client. It is important that the consultant be upfront and forthcoming with the client when disagreements occur, voicing their concerns in a firm but respectful manner, to establish a collaborative relationship with both parties on an equal, or near-equal, footing.
Intangibility: The First Challenge to Solve
Intangibility means potential clients can’t touch, see, or test your service before purchase, rendering it difficult to assess the quality of services before they are provided. For new consulting firms, that raises questions: How can you prove competence without existing client testimonials? How do you estimate ROI for an intangible deliverable? How do you reduce perceived risk so buyers will engage? Research emphasizes converting intangible benefits into tangible cues (reports, dashboards, metrics, etc.) and using tangible evidence (case studies, historical data, certifications, etc.) to reduce buyer uncertainty (Zeithaml, Parasuraman & Berry, 1985), but in practice this can be surprisingly difficult, especially without historical data from past successful projects.
Consulting firms should focus on the aspects of the service they can control, most notably demonstrating the experience of the consulting team, the phases of the consulting process and the progression through the phases, and how the process is organized to collect and analyze real data to derive solutions to tangible problems their clients experience.
At its core, consulting is about transferring specialized industry knowledge from the consultant to the client in a way that not only solves current problems but also ensures that the problems stay solved. Demonstrating the experience and industry knowledge of the consulting team is crucial to communicating competence to the client, however industry and technical experience alone is insufficient; to be effective, consultants must also possess the necessary interpersonal and “consulting” skills to successfully deliver value to clients. Skill in consulting is not only your skill in providing a program, a process, and procedures that respond to the client’s needs; it’s also your skill in being able to identify and put into words the issues around trust, accountability, feelings, responsibility, and the needs of the different parties (Block 1981). Navigating organizational politics, communicating with tact, assertiveness, and active listening, as well as managing confrontation and dissent are crucial skills for consultants, which often play a large role in consulting success.
With ambiguity comes uncertainty, therefore providing the client with a roadmap of the progression of the service eases concerns surrounding the process and allows the client to better understand the value provided. Every client’s needs are different and the consulting approach must be modified for each client, however the general process can be boiled down to common phases: Contracting, Discovery and Data Collection, Feedback and the Decision to Act, and Engagement and Implementation (Block 1981). Each successive phase builds upon the work established in previous phases and the consulting firm should walk clients through the phases to establish how the service will be rendered in detail.
The final deliverables of any consulting project rely on thorough data collection and analysis to determine the root causes of the client’s problems and derive actionable recommendations for resolution. The positioning of the data collection and analysis process should highlight the tangible value of resolving the issues at hand, and the reasonable benefits associated with their resolution. Increases in operational efficiency, reduced waste, higher throughput, or other tangible benefits, whenever reasonably calculable, should be highlighted to the client as reasonably expected outcomes.
A word of caution, however: Consulting relies on establishing a relationship and building trust and commitment with the client. Being authentic with the client at all times is paramount to success, and part of authenticity is not embellishing estimates of potential value created through the consulting process. Always strive to derive the utmost value for your clients, but be reasonable and realistic with your projections to avoid misleading them at all costs.
Practical Strategies for Marketing Intangible Services
To overcome difficulties encountered while marketing intangible services, new consulting firms should consider modifying their existing marketing strategies with some insights from the sample strategies presented below.
Build Credibility and Reduce Perceived Risk
Implement steps to help build credibility within your industry and with your prospective clients, showcasing your competence and de-risking relationships.
1. Provide Outcome-Focused Case Studies
Engage your clients to investigate a specific problem on a smaller scale, quantifying results in easily understood terms with clear demonstrations of added value.
Ex: “Reduced operational inefficiencies in procurement department, resulting in savings of 10 hours of menial work per week, on average, with an estimated yearly savings of $30,000.”
2. Build Credibility through Third-Party Validation
Demonstrate industry-relevant certifications, published research awards, articles, or media mentions.
List government or industry association memberships to add legitimacy.
List credentials and project experience of senior team members.
3. Guarantees and Pilot Engagements
Offer a short discovery phase and a fixed-scope pilot to demonstrate competence and de-risk the relationship.
Provide guarantees to clients focused on delivery times, recommendations, and deliverables.
4. Reference Network
Provide a list of industry-recognized references to prospective clients.
Request introductions through your network to new prospective clients.
Make the Intangible Tangible
Refine pricing models and provide value upfront to help clients understand the details of your consulting services and assess quality.
1. Productize Aspects of Services
Consider re-branding your service offerings into clearly named packages. Productized services let clients compare service levels and reduce purchasing friction.
Ex:
Operational Quick-Win Package
5 Weeks - $25,000
Includes Diagnostic, 3 Priority Recommendations, 1 Implementation Sprint
2. Deliver Tangible Artifacts
Reports, playbooks, dashboards, and implementation roadmaps act as “physical” evidence of the quality of your services.
Enables comparison and evaluation of progress
3. Use Visual Proof
Before and after flowcharts, sample dashboards, and short video walkthroughs make outcomes visible.
Where possible, include photo and video from previous projects.
Differentiate Through Content and Thought Leadership
Establish credibility and influence within your industry through publishing content, participating in industry conferences and newsletters, and establishing an active brand.
1. Targeted Thought Leadership
Publish sector-specific white papers showing methods and case examples.
Provide tailored strategies and commentary.
Distribute via LinkedIn and industry newsletters.
2. Webinars and Workshops
Showcase concrete problem solving.
Create and nurture industry contacts.
Extend the reach of your brand through industry events and seminars.
Free workshops convert leads better than cold calls because prospects see your approach in action.
3. Client Education Funnel
Create a funnel sequence to educate clients and drive prospects to consider your services.
Free Diagnostic
Workshop
Pilot
Retainer/Contract
Each step demonstrates skill, reduces buyer risk, and builds upon previous steps.
Pricing and Commercial Models that Match Perceived Risk
Offer a range of pricing options tailored to different market segments, providing prospective clients with more flexibility to engage your services on terms that work for their business.
1. Value Pricing
Lower upfront cost plus a success fee tied to measurable, pre-defined outcomes.
2. Retainers vs. Project Based vs. Subscription
Offer a range of pricing options to suit different market segments.
Retainer-based pricing for on-going client relationships.
Project based pricing for specific scopes of work.
On-Demand Subscriptions for access to expertise as required.
3. Transparent Pricing Ranges
Ensure pricing ranges are logical, represent the increases in value with each tier, and are easily understood by prospective clients.
Even ranges (ex: 10k – 20k) narrow search friction and attract more serious prospective clients.
Client Acquisition Channels for Service-Based Businesses
Refine your lead generation and simplify your marketing efforts with more targeted and detailed client acquisition channels.
1. Referral Programs and Alliances
Engage in partnerships with complementary service providers (ex: Legal, Accounting, etc.) to provide warmer leads.
2. Account-Based Marketing
For higher-value prospective clients, targeted campaigns to specific accounts combining personalized content and executive outreach.
3. SEO for “Solution” Queries
Refine your SEO optimization to very specific, industry appropriate keywords.
Ex: Optimize SEO for “Reduce Construction Procurement Time Canada” rather than a more generic “procurement consulting”.
Operational Realities
To compete in a challenging economic environment, new consulting firms must consider the operational realities of the consulting market. As larger players consolidate and small firms struggle to compete, tumultuous market conditions require newer firms to refocus efforts on operational efficiency and service quality, while maintaining an eye on the horizon to monitor shifting industry indicators. New firms must therefore concentrate on improving service efficiency through standardized delivery, tracking and quantifying outcomes to better showcase service quality, and maintaining operational flexibility to adjust to shifting industry requirements.
Upon cursory review, every client’s situation and needs are unique, however, after a more detailed analysis, themes and common industry problems begin to emerge. While generalizing in broad strokes can be detrimental if not properly managed, once common themes have surfaced, consulting firms have an opportunity to standardize delivery of certain aspects of the service, resulting in operational efficiency increases which help drive down costs and streamline operations. Once identified and properly analyzed, standardized templates, playbooks, strategies, and options can be employed, reducing service heterogeneity, increasing service quality, and protecting margins. Clients benefit from increased service quality and delivery times, improved project schedules, and faster implementation of solutions to reduce financial hemorrhaging and get their business back on track sooner.
A consulting firm can have the greatest minds, most talent, and best service offering in their industry, but if they cannot summarize and showcase their results, clients will struggle to recognize their achievements. Consulting firms must become experts at data collection, analysis, formatting, and presentation of results not only to deliver value and be effective consultants, but also to market their firm’s services and communicate value effectively to potential clients. Tracking client KPIs, simplifying data to meaningful insights, and creating visuals and dashboards to show results are crucial for project delivery and to document results for future marketing efforts. Firms should consolidate these results in After Action Reports, synthesizing their results down to marketable material that can be presented to prospective clients as evidence of the value of the service offering.
As industry trends shift and the market carves its path forward, consulting firms must maintain operational flexibility, enabling rapid and agile response to the changing business environment. As part of this initiative, establishing relationships with reliable third-party contractors to handle capacity without the fixed cost of full-time hires can enable smaller firms to compete with larger competitors. Conversely, hiring of senior-level consultants from larger firms should be considered when their experience and client relationships provide operational and strategic advantages to the firm that justify their higher salaries and associated perpetual overhead costs.
Stumbling Blocks
Inevitably, newer consulting firms will stumble at some point along the journey to establishing their business. Overcoming obstacles not only tests the character and perseverance of the firm, but also it teaches valuable lessons that help safeguard the company in difficult times. Four of the most common pitfalls encountered by fledgling firms are reliance on “expertise-only” sales, over customization, mispricing, and ignoring procurement complexity.
Reliance on “expertise only” sales is a double-edged sword: it reduces the amount of work per client the firm must commit to, but it also removes the demonstrability of the service offering and value provided, makes it more difficult for the client’s management team to justify the project internally and engage in repeat business, and does not provide marketing materials to generate future sales. The allure of a “quick sale” is detrimental to the consultant’s brand and reputation, and as a general rule for early phase consulting firms, should be avoided. As the firm scales and its reputation becomes established within its industry, “expertise only” sales may become a more prominent service offering, once the detriments are no longer significant to the firm.
The tendency to over-customize for each client can be detrimental in terms of operational efficiency and represents a roadblock to scaling the consulting business. Consulting services by their nature must be tailored to the client’s needs, however, opportunities to standardize the deliverables and workflow processes must be capitalized on to ensure an efficient use of resources and enable the business model to scale more efficiently. It is critical that newer firms be constantly searching for new ways to optimize their offerings and workflow to eke the most value out of the resources at the firm’s disposal. Truly custom work should hold a premium price and be factored into the firm’s pricing structure.
As new entrants to the industry, fledgling consulting firms must be wary of mispricing their services; pricing too low signals lower value and quality, while pricing too high blocks trust and introduces skepticism in the client. As discussed in an earlier section, productizing expertise and pricing structure can introduce more tailored pricing options for different market segments, enabling prospective clients to select the package most suited to their needs. Firms may also experiment with hybrid pricing options and on-demand pricing to provide additional flexibility to their clients.
A profound understanding of the logistical, procurement, and regulatory environments for each client and industry is an important aspect of a consultant’s offering. For public clients especially, understanding procurement complexity is vital. It is crucial that when engaging public clients, the consulting firm must map out the procurement lifecycle and invest in compliance and proposal templates that comply with regulatory requirements. With the increased scrutiny of consulting within the public sector, it is important that new consulting firms navigate the complexities of this space carefully, ensuring close compliance with regulations and requirements.
The Opportunity Behind the Obstacles
Yes, Canada’s consulting market is competitive and small-business realities add friction, but there are also promising levers to increase the odds of survival and success. Consulting firms that convert intangible expertise into repeatable, measurable outcomes, that productize expertise and pricing, and that build credible social proof can quickly and efficiently win the trust of their clients and industry. The ongoing shakeups in the consulting market, especially the availability of talent, create opportunities for nimble founders to attract experienced hires who want influence and speed. Talent flexibility with third-party contractors and technical experts add agility and resiliency, helping adjust to market fluctuations. Investing in evidence-based outcomes, focused positioning and brand building, and smart pricing structures are the most reliable and efficient paths from obscurity to credibility.
References
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BDC. 2025. SME Investment Financing Outlook Report. April. Accessed September 24, 2025. https://www.bdc.ca/globalassets/digizuite/57553-sme-investment-financing-outlook-survey-report-april-2025.pdf.
IBIS World. 2024. Management Consulting in Canada, Industry Report. Accessed September 24, 2025.
ISED Canada. 2024. Biannual Survey of Suppliers of Business Financing - Data Analysis, First Half of 2024. January. Accessed 9 24, 2025. https://ised-isde.canada.ca/site/sme-research-statistics/en/research-reports/biannual-survey-suppliers-business-financing-data-analysis-first-half-2024.
—. 2024. Key Small Business Statistics. Accessed September 23, 2025. https://ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2024.
StatCan. 2022. Small and Medium Businesses: Driving a Large-Sized Economy. June 27. https://www.statcan.gc.ca/o1/en/plus/1253-small-and-medium-businesses-driving-large-sized-economy.