Running a bespoke software consulting micro-company entails more than just delivering quality code. It demands a delicate balance between billable consulting hours and long-term product innovation. For many small firms, particularly those with fewer than ten employees, this tension is not merely theoretical – it is both operational and strategic.
Overemphasizing consulting can lead to stagnation and burnout, while prioritizing product development too heavily can result in cash flow shortages and unsustainable overheads. Thus, finding the right equilibrium is not just important – it is existential.
The Nature of Consulting Work
Consulting serves as the lifeblood for many micro-companies, covering expenses, fostering client trust, and enhancing technical credibility. Typically, consulting revenue is linear: the more hours you work, the more you earn. In the short term, this can be both predictable and scalable, particularly with trusted repeat clients or retainer contracts. However, consulting also imposes several constraints. Time becomes a scarce resource, as developers and founders are often drawn into client emergencies, leaving little room for experimentation or internal improvements. Knowledge gained from client systems seldom evolves into a reusable asset unless specifically designed to do so. Consequently, consulting work frequently provides one-off value rather than long-term leverage.
The Promise and Pitfalls of Product Development
In contrast, product development promises scale and ownership. By building a software product – whether a SaaS tool, internal platform, or white-labelled component – you move from time-for-money to value-for-solution. This allows compounding revenue, intellectual property accumulation, and better margin control. Done right, a good product can generate returns independent of effort and time.
Yet, product development is slow and resource-intensive. Ideas must be validated, MVPs built, marketing executed, feedback loops closed, and infrastructure maintained – all without a paying client. For micro-companies, this often means investing time during evenings, downtimes, or by deliberately reducing billable hours. Without external funding, this opportunity cost is significant.
Where the Tension Lies
The core tension is therefore between the immediacy of consulting and the long-term potential of productisation. Micro-companies face two major risks:
- Over-consulting: Becoming a job-shop with no differentiator, where all staff are stretched thin, and the company is unable to build reusable assets or scale knowledge.
- Over-building: Developing a product no one pays for, sinking time and money into features without clear demand, while consulting revenue erodes.
The objective is to find a rhythm where both paths feed into each other.
Practical Frameworks for Balance
- Quarterly Time Budgeting
Allocate time explicitly: e.g., 70% consulting, 20% product R&D, 10% internal tooling. This prevents product dreams from being deferred indefinitely, while keeping consulting pipelines active. Adjust the ratios based on income forecasts and project urgency.
- Client-Problems as Product Seeds
Many successful products originate from consulting frustrations. Look for recurring pain points across clients and generalise solutions. For example, if several clients ask for a secure document workflow system, consider building a multi-tenant core that you license, white-label, or open-source.
- Reusable Infrastructure as a Bridge
Instead of trying to build an entire product suite, start by making your consulting more efficient. Build internal libraries, deployment tools, authentication scaffolds, and templates that reduce delivery time. Over time, these can evolve into standalone offerings.
- Test Through Micro-products
Launch small, low-risk, narrowly focused tools (e.g. URL shorteners for organisations, form integrations, audit dashboards). Use them as MVPs to test adoption. If traction is poor, you’ve only spent a few weeks. If strong, double down.
- Revenue Triggers for Product Scaling
Define thresholds: e.g., “If product X hits 20 paying users or R10,000 MRR, shift 10% more resources from consulting to product.” This avoids emotional decision-making and ensures that product development follows validated traction.
- Shared Talent Pools
Cross-pollinate teams. A senior developer doing client work three days a week can build product features the remaining two. Junior developers can handle internal R&D while shadowing on consulting work. This prevents siloed skill sets and builds ownership.
Final Thoughts
Balancing consulting and product development is not a one-time decision — it is an ongoing calibration. Each quarter brings new demands, new client priorities, and shifts in team capacity. However, with discipline, small bets, and a focus on reusable knowledge, a bespoke software micro-company can use consulting as both revenue and research — and turn product development into a long-term competitive moat.
