Consultancy BenchPress 2024 – Boutique consultancies feel the squeeze as operating profits fall

Results from the Consultancy BenchPress survey, the leading benchmark survey for boutique consultancies in the UK and Ireland show that boutique consultancies are feeling the squeeze and big profits are becoming rarer. Day rates are flat despite firms carrying increased overheads. Reduced market demand has led to a fall in utilisation and gross margin. All factors combined have led to a fall in operating profit. This at a time when 50% of boutique consultancies are considering an exit within five years.

A collaboration between The Consultancy Growth Network and The Wow Company, Consultancy BenchPress surveyed 287 independent consulting businesses with revenues of up to £50m. 

The report pinpoints the key strategies of high-performing firms and provides crucial business insights to action, whether preparing for exit or building a forever business. Here are a few examples: 

• Focus on equity value levers – consultancies that do this will be twice as likely to be fast-growing, expect fast-growth in the next 12 months and be very confident in achieving their goals. Members of The Consultancy Growth Network have access to powerful tools, template and advice equipping them to do this. No doubt this is part of the reason why TCGN members outperform non-members when it comes to achieving higher than average margins. 
• Use tech to boost performance – utilisation and gross margin increase as consultancies upgrade their technology. The full BenchPress report (only available to members and survey participants) includes links to guidance enabling boutique consultancies to identify what tech they should be investing in according to where they are on their journey.

“All factors combined have led to a fall in operating profit”

“The overall picture for boutique consultancies is not pretty.” says Marc Jantzen, Founder and CEO of The Consultancy Growth Network. 

“Owners who are feeling the profit squeeze can take some solace in knowing they are not alone but that won’t help them turn things around. Now, more than ever the decisions leaders make about what deals to go after, what services to develop and how to price them matter more than ever. My hope is that this report inspires consultancy leaders to spend more time working ‘on’ their business because we now have the evidence to show that there is a direct correlation between time spent on strategy and high performance.”  

“Big profits are becoming rarer”

Now in its fourth year, Consultancy BenchPress presents comparable Key Performance Indicator data alongside insights, tips and tools to support the growth of ambitious founder-led consultancies. Consultancy leadership teams integrate benchmarks from the Consultancy BenchPress Reports into their board meetings and targets.  

This year’s full report, now available to survey participants and members of The Consultancy Growth Network, includes the answers to some of the big challenges, such as operating with purpose, managing time, making money, and building a forever business.  

An abridged version of the Consultancy BenchPress report is available to download below. The full version is accessible to members via the Growth Hub.