When people ask me whether hiring a business consultant is a good idea, I am torn.
My answer is usually “it depends” or “maybe.” There are so many red flags. As a business owner you may have identified problems in your company, yet you just can’t figure out how to get over that particular hurdle. Perhaps you can’t quite pinpoint what would make your business run more efficiently. Or maybe you have a project that only requires someone for a short period or a specific task. Hiring a business consultant can help you tackle these problems more efficiently and improve your bottom line. At the same time, many of the consultants I have hired have been terrible, costing a lot of money and not helping me very much. Working with the wrong consultant feels like speeding down the highway throwing money out your car window. I hated that for me and I would hate that for you. So let’s take an in depth look at the pros and cons of hiring a business consultant.
First, a good business consultant (or consulting firm) can help find and implement solutions to problems you have already pinpointed in your business. If you keep banging your head against a problem, a business consultant might be able to get you over, around, or through that problem. If that’s what you’re looking for, make sure when you are interviewing potential consultants that you ask that person for their specific experience in addressing this type of problem. “Just to make sure we’re on the same page, I’d like you to share three to five times you’ve worked with a company like mine to address a problem like this. What went well? What went poorly? What were the main reasons those projects succeeded or failed? Of course I don’t want you to reveal any private or proprietary information.” If they can’t give you at least three projects they’ve personally worked on like yours, be very careful. If they can’t give you any, but talk about how their firm “has been doing this sort of work for 87 years,” RUN!
A good business consultant can also guide you and your business in a direction needed for greater growth and efficiency. By mapping out a clear cut plan, business consultants can give you feedback about your goals and, if appropriate, can help get you to your next goal. A good business consultant should always be looking for the right opportunity, making sure you have the right resources to achieve the goal, and making it clear how they are going to provide you with the right solution for your problem. Do NOT settle for glittering generalities or base your hiring decision on hope. As former Mayor of New York Rudy Giuliani once famously said, “Hope is not a strategy.”
Business consultants can also provide a sounding board for business owners. If you are going to use a business consultant as a sounding board, make sure they have either worked in companies like yours, consulted with companies like yours, or preferably both. I once hired a consulting firm dripping with MBAs. I figured these guys were the masters of the universe so they would obviously have all the answers to my problems. The problem was NONE of them had ever worked for a small business like mine or done enough consulting in businesses like mine to offer me real, helpful advice/feedback/guidance. Their advice might have been helpful for a hundred million dollar company, but not for a five million dollar company like mine.
Another potential advantage of business consultants is the ability to reduce overhead. Some projects may only require a certain amount of time. Hiring an employee in this case could be costly due to labor burden (insurance and benefits, etc.), work space, and more. By hiring a consultant, you only use them when needed and thus save on paying a salary for the same type of position had you hired an employee. Remember though, consultant fees vary based on the work, so weighing the length of time needed and type of consulting required are important factors in deciding on hiring a consultant.
The biggest potential disadvantage of hiring a business consultant is hiring the wrong one. That’s painful and can be costly in terms of morale and money. If their advice is misguided, it could actually sink your company, so be careful. Another potential downside is consultants can create a relationship of dependency for businesses. In this case, the business owner spends more time and money with the consultant and thereby the business ends up losing money. Let me be clear, in the long run, the wrong consultant can end up costing you truckloads of money. Being clear about the specific problems you need help with, checking out references, and performing a rigorous interview is crucial. If the potential consultant bristle at your vetting process, move along. You’re not hiring a best friend, you’re hiring a consultant to have a positive impact on your bottom line.
The bottom line: consultants can be an important member of your business team, especially in situations where hiring a full time employee for a particular project would be overkill. Weighing your options and your business needs is paramount when deciding on whether or not to hire a business consultant. Take enough time to know exactly what problem you want to address, what goal you want to achieve, and why you think hiring a consultant may be the best option to fix the problem or achieve the goal. Once you know those things, you can decide whether hiring a consultant is really the best thing for you, and you can find the right consultant for your situation.
When people approach me by asking why they should hire me as a consultant, my response is something along the lines of, “I don’t know. Maybe you shouldn’t.” Until both of us know your specific needs and situation, neither of us has any idea whether I can help you or not. Neither does any other consultant worth his or her salt. Don’t be bamboozled. As a small business owner, you’ve worked to hard to let someone else screw this up.
If you’d like to discuss your situation and see if I might be able to help you, please email me so we can set up a time to talk. If you’re afraid I’m going to try to smooth talk my way into some sweet consulting gig, don’t worry. I won’t. I’ve been in your shoes and I know what it’s like.