As a result of the shaky economy, many IT professionals have recently lost their jobs, and more layoffs lurk ahead. Many tech workers will consider joining or forming small boutique consulting firms with staffs ranging from one to 50 employees.
A boutique is riskier than an established consultancy. Boutiques (particularly those with only one or two people) may not have established clients, methodologies or administrative processes. Worse, they may not have the resources to train new employees who have limited consulting experience. Before joining or creating a boutique consulting firm, consider these aspects:
Successful boutiques deliver a small number of very-high-quality services. (Even large consultancies cannot deliver every possible service.) Focus the firm on industries and services where the staff has expertise. Resist the urge to tell potential clients you can address any IT issue.
No consultancy can exist without clients. Most boutiques struggle to build enough market awareness so that potential clients know they exist.
Often, when people start a firm, friends hire them. This will jump-start a boutique, but it won’t create a sustainable company. The firm must learn to identify potential business opportunities and close deals with strangers. If you hate the selling process or quake at the thought of making cold calls, avoid boutiques.
Executives who become consultants sometimes want to offer advice based largely on their experience. Sustainable boutiques must move beyond armchair consulting. Although experience provides valuable perspective, clients also expect consultants to base their findings and recommendations on rigorous analysis. Some former executives are unhappy with the required attention to detail.
In most large organizations, middle managers scramble to implement senior executives’ ideas, even half-baked ones. Boutique consultants can’t force clients to implement their ideas; they must sell them. This requires collaboration with the client and a willingness to have your ideas modified. If your ego can’t handle that, stay away.
Because boutiques rarely employ junior consultants and usually have limited administrative help, delegation may not be an option. Boutique consultants must be proficient with Excel and PowerPoint and willing and able to write their own reports. Most boutiques take the position that if you want a staff meeting, look in the mirror (and hope that you don’t get into an argument).
Some people who choose boutiques find that they miss the status and perks of a large organization. Corporate executives will miss having an executive assistant. Few clients provide support to consultants beyond basic levels. Expect cramped office space with inconsistent network access. Don’t expect the client to take you to dinner.
Instead, expect your schedule to be inconveniently rearranged on short notice. (Learn to love travel Web sites.) Boutique consultants are at the bottom of the pecking order. Avoid disappointment by adjusting your attitude accordingly.
With lower overhead than bigger consultancies, boutiques are very profitable when everyone is working on billable projects. But boutiques may experience large cycles of feast and famine, and most have limited funding to pay the staff during idle periods. Be prepared financially.
Some boutiques are organized around the owners’ lifestyles, and these intentionally remain small. In other cases, the owners hope to grow and sell the firm. If the boutique is ultimately sold to an established consultancy or to younger partners, the change will create opportunities and challenges. Be sure you understand the owners’ growth plans and time frames before joining.
Boutique consulting firms offer tremendous opportunities for IT professionals, but they also present unique challenges. Gather plenty of data and thoroughly research the associated challenges and opportunities before deciding if you’re boutique bound.
Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com.This version of the story originally appeared in Computerworld’s print edition.