The 5 Competitors All Boutique Firms Face And Must Defeat

The 5 Competitors All Boutique Firms Face And Must Defeat

A white chess piece being used to knock over a black one

There are five types of competitors for all boutique firms. They are as follows:

1. Do nothing

2. Internal resources

3. Boutiques

4. Market leaders

5. Other

Understanding the difference between these business obstacles, and how to overcome them, is key to success as a boutique firm. Here, we’ll go over how to tackle these kinds of business problems in your day-to-day, depending on the type.

The “do nothing” decision 

Approximately 40 percent of the time you will be competing with “do nothing.” This competitor can be described as the project that went away. The client did not hire you or one of your competitors. They just decided not to go forward with the initiative. The reason this happens about 40 percent of the time is that you are not pursuing the urgent. The client has other priorities and business plans.

The way to defeat “do nothing” business challenges is to calculate the cost of inaction. You need to prove to the client that your project deserves their full attention. It is the priority. As they say, “Money talks and BS walks.” Put a hard dollar on their inaction, and you will defeat this competitor.

Clients that rely on internal resources

Approximately 30 percent of the time you will be competing with internal resources. These clients think that they can do what you can do. And they think that they can do it better than you and for “free.” The reason this happens about 30 percent of the time is that there is no compelling event. The client is not concerned with how long the project takes. There is no deadline breathing down their necks.

The way to defeat internal resource-based business challenges is to establish a deadline. Explain to the client that completing the project inside of this deadline is very difficult. It is too risky for them to try to do so on their own. Share with the client the true workload. Make it obvious that they need help.

Boutique firm competition

Approximately 20 percent of the time you will be competing with other boutiques. Highly specialized prescale firms are very attractive to potential clients. The reason this happens about 20 percent of the time is that some clients have budget constraints. They turn to boutique firms because, in general, boutiques are less costly. The way to deal with this kind of business obstacle is to guarantee the work. Boutiques have limited resources, and this makes them risk averse. The idea of a guarantee frightens them, as they may not get paid. By guaranteeing your work, you separate yourself from the boutique competitors.

Market leader competition

Approximately 5 percent of the time you will be competing with the market leaders. These are

the 4,100 firms that have had their business grow to more than 250 employees. The reason this happens only about 5 percent of the time is that most boutiques are not in these deals. By guaranteeing your work, you separate yourself from the boutique competitors.

Clients who can afford the market leaders tend not to ask smaller firms to bid. However, when they do, these deals represent the year makers. Therefore, boutiques must be excellent at beating the market leaders. Although it is only 5 percent of the pipeline, these are the big deals. Just one or two wins per year can mean a lot.

Small businesses vs. market leaders

The way to defeat the market leaders is by implementing a five-step approach. Step one is to establish your credibility. Prove to the client that you are worthy of consideration. Step two is to

deliver a top-quality proposal. This will signal to the client that you deliver exceptional work and have a plan to overcome business obstacles. Step three is to demonstrate to the client that you can complete the work much faster. The advantage of a boutique is speed. Big firms can be very slow-moving. Step four is to offer the same quality of work for 25 percent less cost. Market leaders are expensive. They can be defeated with competitive pricing.

Don’t discount too much, for it may mistakenly signal that you are “cheap.” Step five is to offer an enjoyable experience. Market leaders enter a client like a tornado and are very disruptive. The advantage of working with a boutique is that they are easier to deal with.

The “other”

Approximately 5 percent of the time you will be competing with the “other.” This is to say that you are competing with alternative ways of solving the client’s problem. The two most common “others” are executive search and software providers. Clients often think that the fast way to solve a problem is to fire someone. This is quickly followed by hiring a replacement. In other cases, clients think that they can license a piece of software and the problem goes away.

The way to defeat “other” is to perform a postmortem. The postmortem highlights that the last time they took this approach, it did not work. For instance, the hiring error rate is high, especially

so at the executive level. And many software applications have low user adoption rates. Once the client is reminded of these previous attempts, they typically eliminate them.

Are you ready to compete? 

In order to determine if you’re ready to compete, here are some questions to ask yourself.

1. Can you calculate a client’s cost of inaction?

2. Can you find a compelling event that puts a deadline on the client’s project?

3. Are you confident enough to guarantee your work?

4. Can you establish your credibility in the eyes of your client?

5. Can you signal quality to the client by delivering a best-in-class proposal?

6. Can you deliver much faster than the market leaders in your niche?

7. Can you earn healthy margins and still be 25 percent less than the market leaders?

8. Are you more enjoyable to work with than the market leaders?

9. Do you understand the alternative solutions to the problem you address?

10. Will a postmortem reveal to the client that these alternatives have a poor track record?

If you answered no to eight or more of these questions, you are not ready to tackle the business challenge of competition. The task is to prepare for competition by converting the nos to yeses.

If you answered yes to eight or more of these questions, you are ready to win. The task is to get in as many deals as possible. Your win rate will be very high.


A start-up boutique must win a high percentage of the time. They are not in enough deals to allow for many deals to be lost. No one wins every deal. But that should be the goal. By establishing a competitive playbook, you can make sure to beat the other guys consistently.

Get the best experience when growing your business 

Dealing with the competition is a part of the business challenges that every company faces. However, just because business obstacles are commonplace, doesn’t make them any less daunting to face. Relying on firsthand experience and advice is always the way to go. 
For more insights into how to upscale your consulting business, listen to the Collective 54 podcast today or join our mastermind group.