Is It Unsustainable?

A relevant reflection for consultants, as the market environment shifts.

It's wise to think about how sustainable your business model, workload and recurring activities, and lifestyle as a whole are.

Everybody gets excited to see their number of clients, employees, or social media followers growing. But the more we accelerate, the harder it is to hit the brake and evaluate if we have enough fuel to keep the engine going.

But wait, is it really that important?

Morgan Housel, a partner at Collaborative Fund, wrote:

Unsustainable things can last years or decades longer than people think.

He's right. For years, many of my clients were agency founders. I've lost count of how many of those businesses were in terrible shape - the commoditization of digital marketing pushed everybody to sell productized services at lower prices. When you choose efficiency over innovation, it becomes a race to the bottom.

The economics (no margins and poor revenue model) were unsustainable. The founders' lifestyle (high level of stress and no flexibility) was unsustainable. But somehow, they survived. They stayed in business for years.

Of course, the same happens with boutique consulting firms. Despite the prestigious brands in their client list and the awards that you often see partners celebrating on LinkedIn, many of those firms are - at least the way I see it - on a countdown to close their doors.

Most partners only fully realize it when they try to sell the firm. Maybe this is one of the reasons why they often exit via employee purchase, rather than via external sale.

So the question is not whether you will have enough work on your plate or not. With enough hustle and concentrated focus, chances are you will get by for a few years. It's about choosing what game you want to play.

If you want to invest your limited time and energy into building castles in the sand, go for it. But don't forget that your only reward is the joy of building. With the strong winds that many expect for the upcoming months, we might unfortunately see quite a few firms closing their doors.

Get ahead. Take some time to audit your consulting practice. Progress happens too slowly to notice, and setbacks happen too fast to ignore.

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.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.