Hiring a Business Consultant
By Patti Lind, The Abilities Fund, Inc.
Comprehensive planning for business start-up or expansion will require you to take advantage of a range of resources. Some of those resources may include group meetings, training, books, the library, the Internet, and computer software. Planning for start-up or expansion is different for everyone. Several factors, including the specifics of the business idea and your research and writing skills, will determine the types of resources you will need to utilize. For some, the previously mentioned resources will be adequate. Others may need the assistance of a skilled business consultant. A business consultant can expedite the process and assist you with the exhaustive professional research and preparation needed to launch or expand a business successfully. Paid consultants are likely to give you the comprehensive, unbiased, and reality-based information needed to help you make smart and informed decisions about how your business will develop.
It’s one thing to determine that your best resource will be a paid consultant. However, when it comes to spending your precious, hard-earned dollars to obtain their services, you will want to be absolutely certain that the consultant gives you the most for your money. The following are a few tips and techniques to consider when hiring a business consultant:
1. Clearly define your consulting needs.
Prepare a list of all activities the consultant will perform. With this list, you will be set to communicate your needs to the consultants you interview.
2. Identify qualified consultants with expertise in the area you need.
Often times, a barrier to hiring a good consultant is the fact that you don’t even know any! Identifying reliable resources for obtaining the names of consultants is the first step. Your local banker is a great place to start, as he/she is knowledgeable about consultants who have helped their other clients. Local Chamber of Commerce officials frequently are “in the know” about who’s who in the consulting world. Finally, economic development officials in your state economic or commerce agency should be knowledgeable of qualified, experienced micro and small business development consultants.
3. Interview all consultants before making a decision about who is the best for the job.
This tip assumes that you will interview more than one consultant–and you should! Remember, their business expertise is one thing; your ability to communicate effectively with the consultant is another. Hopefully, all consultants interviewed will have the fundamental expertise necessary to complete the job, but don’t assume anything. Ask for references, and follow through by investigating those references. And remember, just because a consultant has ten years experience in his/her own consulting business doesn’t guarantee that you can communicate together effectively. When selecting a consultant from the many you have interviewed, consider the ease in which you were able to communicate together. Solid skills and expertise coupled with an ability to communicate clearly are the ingredients for a fruitful relationship.
4. Access to your consultant means everything.
If you hire a consultant who is part of a large firm or agency, is there a thick wall of secretaries and assistants to get through? Will the consultant you interview be the one who actually provides your service, or will you have to work with a designated associate who may be promising but doesn’t have the background to support your needs? Ideally, when making the final hiring decision, you want to make sure that you work one-on-one with the consultant of your choice and that you have a direct line to his/her desk so you can reach her/him as needed.
5. Understand the range of services the consultant offers.
Is the consultant a full-time professional with a specific area of focus? Or, will they have to “outsource” any of the services claimed as available from their firm? Many consultants boast a menu of available services and expertise that is extensive, but actually mean that in order to provide all of those services, it is necessary that they use, or “outsource,” the services of an outside professional who will actually do the work. This type of consulting arrangement can be very effective, provided that you know up-front that the consultant you are interviewing may not be the one providing all of the services. In this case, make absolutely sure that you understand who will be the primary person for contact purposes, who will provide each component of service, and that one contract will suffice.
6. Remember–you are paying not only for expertise, but ATTENTION as well.
It’s a fair question to ask how many other clients the consultant will be serving during the period of time your needs must be met. Talk with the consultant about his/her ability to meet your timeline. Having expertise is one thing–having enough time to share that expertise is another.
7. Does the consultant specialize in one area?
When hiring a marketing specialist, determine whether or not he/she works with only one type of marketing (for example, a consultant who is a specialist in on-line marketing or radio advertising). Or, is he/she spread too thin by trying to be a “jack of all trades” in order to provide whatever marketing services you want to buy? The same applies to business planning consultants. Is their experience in providing business planning services to micro businesses–or–is their demonstrated experience working with large conglomerates with hundreds of employees? In the end, make sure you match your specific needs with their specific skills and experience.
8. Ask the consultant to provide a proposal for services.
Let the consultant know that in a proposal for services, you need a specific listing of activities to be performed. In this case, the more detail, the better. Clear expectations lead to satisfaction. Not only should the proposal be detailed as to activities to be performed, it should be equally clear regarding the timeline for providing services and the fee. Some consultants will propose services on an hourly basis and, therefore, you will need to know the maximum hours anticipated for each activity. Others propose services by an “outcome-based” fee, meaning that there is one fee for all services detailed in the proposal. Regardless of the method, be clear on the maximum allowed dollar amount for the contract. Also, it’s important to note that some consultants have specific requirements, such as ¼ of the total contract fee as a down payment before the work begins. Be absolutely certain what their requirements are, if any.
This may be a good time to hire your first consultant (an attorney) to help you review the proposal and develop a contract for accepting it!
9. Once the consultant’s services are contracted, monitor progress.
The proposal for services should include regular reports on progress. Whether the reports are made in writing or through personal contact, monitoring progress is essential. Use the timeline provided in the proposal to determine whether or not activities are being performed at the promised pace. If a face-to-face meeting is the method you use to monitor the consultant’s progress, insist that you be provided with written notes regarding the results of the meeting. This service should be noted in the proposal.
10. Enjoy the outcome!
By clearly defining needed services, seeking recommendations for qualified consultants, interviewing consultants thoroughly (including checking references), requiring and reviewing written proposals for services, and monitoring work progress, you’re on your way to satisfying your business planning needs and enjoying success as an entrepreneur!
Contact Information
Patti Lind
The Abiltites Fund
PRLIND1@aol.com
©2000-2001 The Abilities Fund, Inc. Reprinted with the permission of the author.