Questions To Ask When Considering Building A Lifestyle Boutique Consultancy

Closing the series with some readers' questions.

Today I'd like to end this series of posts on understanding lifestyle boutique consultancies. In the last few days, I wrote short posts about:

These posts will probably help you start thinking about whether you'd like to sustain a solo practice or continue through the growth path toward building a micro consultancy, and later a lifestyle boutique firm.

On top of these, I recommend you to attend one of the free live workshops I deliver here - we discuss benchmarks and common challenges for each growth phase. Having a clear vision of what kind of consulting business you want to build is necessary to create a plan of action. As the saying goes, if you don’t know where you’re going, any road will get you there.

Finally, here are some questions I got from readers this week.

What exactly characterizes a lifestyle boutique consultancy?

Typically, these consultancies consists of 4 to 20 people. For a number of reasons (attend our workshops for more details!) they tend to gravitate towards 10-12 employees. It's a small and dynamic team with relatively low overheads and the ability to self-organize.

The founders or partners usually have developed a strong brand and reputation in the space, continually attracting money and opportunities. In terms of compensation, they earn more or at least in line with what they could get at a corporate job. But with much more flexibility, fun, and fulfillment.

What's the difference between a micro consultancy and a lifestyle boutique consultancy?

Micro consultancies are smaller, both in terms of staff and fee billings/FTE. While there are some benchmarks we often use, there are no formal criteria to classify those growth phases.

A micro consultancy has a small team with focused roles and can pay basic wages, but it's not very profitable. Often things are pretty tight. Founders would almost always earn more by taking a corporate job, so it's a frustrating position to be in.

What are your thoughts on choosing to stay in a freelancing, solo consulting path?

As I said here, freelancing is not "smaller" or "worse". I know several freelance consultants who earn much more than micro consultancy founders. While the average compensation is much lower for freelancers, it is a skewed distribution - there's a long tail curve to the right where we can find some consultants earning much more than the average guys.

An in-depth analysis of why this happens would probably require a post on its own. It's worth saying, however, that the freelancers that compose this selective high-earning group don't only offer consulting services - they typically increase and diversify their income with digital products such as courses, books, and paid newsletters. They also have a very solid money-saving strategy to survive the roller-coaster life of a one-person business.

Thanks for reading. You can get more specialized and actionable growth insights for micro consultancies in our newsletter. Every Tuesday, you get one idea from Danilo, one quote from other experts, one number you need to hear, and one question for you to level up your consulting practice.

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