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:
- What a lifestyle boutique consultancy is.
- The difference between freelancing and running a micro boutique.
- Why freelancers are not all the same.
- Why freelancing talent platforms are not as safe as they seem.
- How you start a micro consultancy from a freelance background.
- What I think about skipping freelancing and founding a micro consultancy straight out the gate.
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 every two weeks - 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.