Boutique Consulting Club - The Security Trap

Last week a friend shared with me a beautiful passage by Paulo Coelho, from his book "By the River Piedra I Sat Down and Wept":

"Pitiful is the person who is afraid of taking risks. Perhaps this person will never be disappointed or disillusioned; perhaps she won’t suffer the way people do when they have a dream to follow. But when that person looks back – and at some point everyone looks back – she will hear her heart saying, “What have you done with the miracles that God planted in your days? What have you done with the talents God bestowed on you? You buried yourself in a cave because you were fearful of losing those talents. So this is your heritage; the certainty that you wasted your life."

We all feel fear. It's a built-in feature of every human. And it is the main source of another toxic mindset consultancy founders must look out to: The security trap.

The security trap is nothing more than a disproportionally high risk aversion. You can easily find it by looking at consulting partners whose practice has plateaued for a few years. Founders simply fail to invest and take sufficient risks to generate growth.

Of course, being prudent is important to build a sustainable business. But in consulting, and especially if you're a solo or micro consultancy, business risk is relatively low:

• It's a cash-rich business: How much capital do you need to start a consulting business? Typically, little to none. Apart from the formally employed staff, you have no significant fixed costs that are absolutely required to operate.
• Market growth: The growth rate for the entire consulting market has averaged around 8% per year in the last decade. According to the last Benchpress report, 82% of boutique consultancies grew revenue in 2022. And almost half of them grew it by more than 25%.
• IP as an asset: Even if you do not intend to scale up and try to sell your firm, you can and should build income-generating assets over time. Your IP can often be leveraged and monetized through books, digital assets, and licensing.

After a few years in consulting, we quickly forget all of these advantages. But taking a step back and recognizing that your business operates in a low-risk context is key to avoiding the security trap. Nothing ventured, nothing gained.

We can also quickly spot founders who fall for this trap when we look at their content marketing. This is a key function of business development. Without the ability to create content that is shareable, helpful to your audience, and positions you as a trusted source of value, you will struggle to support premium fees.

Still, many founders are hesitant to publicly share their expertise for fear prospects will steal their ideas and do it themselves. Or that competitors will copy their methodology. I wrote more about it here.

The security trap will ultimately drive both your strategy and execution priorities. A large part of leading and growing a business consists of taking risks. Tomorrow, I'll share a positive mindset that will help you overcome this trap.