Key Business Resources For Boutique Consultancies

Let's continue to explore the components behind the Boutique Consulting Canvas. Yesterday, we touched on value proposition. Today, it's time to look at value creation and key resources.

The Boutique Consulting Canvas

Value creation in our framework refers to how your consultancy actually delivers value to clients. To do that, you need both resources and processes. Let's take a quick look at the four main resources you must consider when analyzing or rethinking your consulting business model.

Those resources are people, intellectual property (IP), market assets, and your relationships and partnerships.

People

People here refer to your firm's employees, contractors, or collaborators. They are responsible to support you by working on the main processes your consultancy needs to survive and thrive - getting new work, delivering projects, etc. (more on this tomorrow).

In your business model review, the main questions to pose here are:

• Which kind of support you want to hire?
• Where are those people coming from?
• What do you need in order to attract, hire, and/or retain them?

There are several possibilities here. You can operate in a traditional partnership model, employing full-time people in a hierarchical structure. It can be a collaborative structure, where you or your core team lead client engagements but bring external consultants or other firms to collaborate on assignments. Lifestyle boutique consultancies leverage their founders' personal brand and keep a small team in a flat structure.

Intellectual Property

IP is nothing more than codified knowledge. These can be a billion things, but I think it's helpful to divide them into 3 categories (hat tip to Prof. Joe O'Mahoney): Business Development, delivery, and operations.

• Business Development IP: Helps you sell more, better, and faster at a lower cost. Examples: Marketing content, pitch methodologies, proposal templates.
• Delivery IP: Helps you standardize and/or scale by enabling high-fee work by cheaper consultants. Examples: Methodologies, process maps, questionnaires.
• Operations IP: Helps you continually improve the effectiveness of your infrastructure. Examples: SOPs for admin tasks, strategy, team alignment.

The type of problem your consultancy chooses to focus on solving matters here. "Procedure firms" that solve common and frequent problems often have high levels of IP on the three groups - solutions are often productized and there's a high team leverage.

On the other opposite, if you solve complex and unique problems your consultancy will tend to have a low level of delivery IP. The focus here is usually on business development IP that demonstrates expertise and creates demand, such as articles or presentations with a strong and distinct point of view.

Market Assets

Market assets refer to resources that are captured or built as you interact with your target audience. As opposed to your IP, they can't really be "codified" in any way - although they can be leveraged to produce new IP, such as new research and methodologies.

Under this category we usually include:

• Market Data: What you know about your target audience. It can be used, for example, to inform your strategy and personalize your marketing initiatives.
• Market Channels: Owned and earned market channels to distribute your message and offerings to people. Examples include a large and targeted email list, social media reach, a monthly column in a trade association's magazine.
• Market Position: Your reputation, awards or industry recognition, special accreditation.

These are powerful resources that are often overlooked when boutique consultancies are planning for growth.

Relationships & Partnerships

I'll say it again: The consulting business is a relationship business. Trust is the most important currency here. You won't go anywhere if you ignore it. Your relationships and partnerships play a crucial role in the trust-building process.

Relationships here refer to your existing network, composed of all the people you personally know. These include those you have occasionally met. Those who work in the same space as you do and would gladly put you in front of their audience. And also your super fans - delighted clients, peers, colleagues.

Some of them might be partners. Partnerships are strategic alliances with other people who can accelerate growth. These include:

• Brand partners: Improve your visibility and reputation in the space.
• Affiliate partners: Are paid a commission to recommend your offerings.
• Product partners: Supply you with additional offerings that add value to your business.

Relationships are often the main resource of consulting founders with a corporate background, which is why they should be part of your business model analysis. And while not every consultancy is ready for partnerships, they can make or break a practice.

Tomorrow, I'll give you a quick overview of the key processes of a typical boutique consulting firm.