The year is 2023, and the global economy, relentlessly stirred by fluctuating trends and financial pressures, has dealt a heavy blow to professional service firms—particularly the custom software development houses. These firms, once lavishly blessed with burgeoning budgets, have come face-to-face with the painful aftermath of their own negligence: systemic underinvestment in sales and marketing.

Over the past decade, buoyed by an era of abundance, boutique professional service firms effortlessly navigated the path to their financial targets. This period of corporate wealth, coupled with the world’s relentless march toward digital transformation, catalyzed an unprecedented demand for custom software solutions. But beneath this seemingly golden age lurked a dangerous assumption held by these firms’ technical geniuses: the belief that their good work alone would suffice to attract prospects and keep the pipeline humming. The dogma that “good work sells itself” and that clients would automatically broadcast their satisfaction was almost religious in its conviction.

Herein lies the crux of their arrogance: “Who needs to be good at sales and marketing when there’s a perpetual stream of opportunities?” This flawed assumption has proven perilously short-sighted in 2023. Firms that were once profitable and expanding are now facing contracting revenues, slimmer margins, operational losses, and even layoffs.

Unsurprisingly, these once-cocky founders believe they can abruptly flip a switch and rectify this situation by merely getting “good” at sales and marketing. But a harsh truth awaits them: Excellence in business development is not achieved overnight. It takes years to build a robust sales and marketing foundation—just as it takes years to hone software engineering skills.

So, what is the founder of a boutique professional service firm, particularly in the software development space, to do? Swallowing a sizeable slice of humble pie seems to be in order. They must heed the wisdom of Warren Buffet: “Only when the tide goes out do you learn who has been swimming naked.” The tide has gone out and these founders have been swimming naked. They must commit to a multi-year investment of time and resources to cultivate world-class capabilities in business development. Failing to do so will condemn them to a vicious boom-bust cycle dictated by the economy’s natural expansion and recession rhythms.

Building an enduring boutique professional service firm—one that thrives in times of prosperity and recession alike—requires the ability to consistently and predictably win new business and garner expansion revenue from existing clients. This moment signifies a stark division between the strong and weak leaders.

The weak leader, in the face of adversity, retrenches and relies on the good fortune of a recovering economy to rebound. But such a leader will never construct a great firm; they will merely float with the macro environment’s ebbs and flows.

In contrast, the strong leader invests heavily in a robust business development function during challenging times. These leaders are driven by an intolerance for their future lying outside their control. They aim to build resilient, enduring firms that can weather stormy times as well as they can bask in glorious periods.

Which type of leader are you? A true entrepreneur who bets on himself during times of uncertainty, or a small business owner masquerading as an entrepreneur afraid to do what is required?

Now is the time for a call to action. For many of these founders, a decade-long stretch of prosperity means they have never navigated a recession before. These uncharted waters leave them clueless and desperate. The solution? Join the Collective 54 mastermind community. Surround yourself with seasoned role models, mentors, coaches, and peers who have weathered these storms before and can guide you forward. Here is an example of a member of our community from the software development sector that should inspire you. By joining, you can surround yourself with remarkable peers like this. 

Failing to heed this advice and continue underestimating the importance of a robust sales and marketing foundation could mean the difference between merely surviving or thriving in the demanding world of custom software development. As the economic tides recede, don’t be left exposed. Take control, equip your firm for the long haul, and build an enduring legacy.