Not every consulting business is the same. But still, many independent consultants have a biased and fixed view of what a successful business would look like. And this vision can lead often lead them to work on something that is neither enjoyable, sustainable, or suitable for their personality and personal goals.
When you paint a picture of a perfect consulting business, you are likely drawing from your previous work experiences and relationships. Someone who worked on a large consulting firm is more likely to see the size and quality of their staff as a driver of success. But there's not a golden recipe to build a business that sells expert advice.
So today I'm listing the 3 most common consulting business models out there, with their pros and cons:
- The Solo Consultant Model
- The Consulting Firm Model
- The Productized Consulting Model
The Solo Consultant Model
Here you work closely with clients but have no fixed employees. The projects usually consist of 1:1 engagements, where you can either deliver the work yourself, partner up with other indie consultants and agencies, or subcontract freelancers and specialists by project.
I've previously written about the advantages of staying small. The solo consulting model is a great option for you if you want your business to be lean, profitable, and flexible. You can build a consulting practice that fits your preferred “lifestyle”, instead of the opposite.
Solo consultants have all the freedom in the world. You get to choose what you get to work on, who you want to work with, and where you want to do it. There are also disadvantages, however.
Some people find it hard to work without a team, even if you can always join niche communities for support and accountability. The higher flexibility often comes with the side-effect of feeling overwhelmed and taking less time off, since all revenue and client work rely 100% on you. This also makes it much harder for you to sell your business in the future.
The Consulting Firm Model
Here you have a team of consultants who implement or execute the projects for your clients. You can also eventually deliver work, but your main role as partner or founder is to generate more businesses and hire and manage a talented team.
The consulting model might be a good fit for you if you don’t want to be focused on the “day-to-day” work. Projects can be delivered without much of your involvement. The business also becomes an asset that you can more easily sell in the future.
There are also downsides. The time you save by having a team to deliver projects needs to be allocated into business development and sales, and leadership - how to manage and coach your people effectively. Hiring and implementing a healthy culture become key, and making payroll is an unavoidable burden (or stress) you will need to deal with every month.
The Productized Model
Here you turn your expertise into a productized service - a “done for you” solution with a compelling value proposition, packaged at a set price and scope - or products such as books, digital info-products, courses and training, paid communities.
The productized consulting model might be a good option for you if you want to build a business that can scale, if you already have developed effective methodologies, systems, and a repeatable process with past clients, and if you want to remove yourself from the day-to-day work.
This is not ideal if you find it boring to always explore or solve the same problems again and again. Commoditization and plagiarism are always a challenge, and since the average size of the solution is smaller this model often requires more clients (volume) for you to reach a given revenue level.
They Are Not Mutually Exclusive
You can mix and match different elements of these models for your own business. You can build info-products as a solo consultant. You can work on high-value projects or sell retainers as a firm's partner.
What most indie consultants would benefit from is understanding there's not a single business model they can work with. If you're stuck, it might be worth revisiting your assumptions.