Why Boutique Consultants Don't Fear the R-Word

This morning, I woke up to unpleasant news. A fear of a global recession causes a global stock market meltdown. Here is why boutique consultants have nothing to worry about.

Where the mind goes, energy flows. In 2009, I ignored all news about the global financial crisis and grew from a $100k per year solo consultant to a 7-figure boutique consulting firm for localization.

Many small consulting firms also thrived despite the challenging economic environment, most notably:

• Accurate Methods Consulting, providing accounting and finance solutions to small and mid-sized businesses.
• Eagle Hill Consulting, focusing on strategy, organizational design, and talent management.
• Slalom, offering consulting services in technology, strategy, and business transformation.

Do yourself a favor: ignore all the news about the stock market right now – or ever.

It’s not just psychology; it’s common sense backed by hard data

1. No one ever knows when a recession starts, and almost all predictions are wrong. The IMF found that only 4 out of 49 major downturns were accurately predicted one year in advance. The few accurate ones were by people who mostly got it wrong before.
2. The news media needs eyeballs, and bad news sells better than good news. They’ll always amplify the bad.
3. Even if they were right, the average recession only lasts nine months. By the time economic data is compiled and reported, the economy might already be recovering. A recession is defined as two consecutive quarters of negative GDP growth, so when you hear about it, the worst is usually over.
4. As a boutique consultant, your business operates in a unique ecosystem that often insulates you from broader economic downturns. Companies might cut back on general expenses but still require strategic consulting to optimize operations, manage costs, or pivot their business models.
5. The stock market and the economy are not the same. The stock market primarily reflects the performance and investor sentiment of publicly traded companies that over-represent certain sectors like technology and finance, which doesn’t give a comprehensive view of the entire economy.

The stock market is not the economy, and the economy is not your business.

Most boutique consultants cater to specific client needs that may remain stable or even increase during economic downturns.

While overall economic health impacts consumer spending and business investments, your unique offer, systemization, and focus on top clients mitigate these effects.

So, let’s not mention the R-word. Instead, let’s focus on leveraging your Sweet Spot to navigate economic fluctuations, ensuring your business thrives regardless of stock market performance or broader economic trends.

Let your energy flow here

1. Irresistible Offer: Provide highly specialized services in demand during financial crises. Businesses need expert advice to navigate economic challenges, optimize operations, and manage costs effectively.
2. Top Clients: Build strong, personalized relationships with clients. Trust and reliability are critical as businesses seek dependable consultants to help them through turbulent times.
3. Systematization: Adapt quickly to changing market conditions. Pivot your service offerings and respond to immediate client needs more swiftly than larger firms.

In the High Performance Consultant Academy, we call it "focusing on the Sweet Spot." Want to know if you are in it and prepared? Find out in two minutes with the Sweet Spot Quiz here.