Bringing in a consultant – a specialist in your industry sector – may deliver substantial benefits, new perspectives, and solutions to challenges facing your business. However, there’s also a chance that hiring a consultant may be a waste of money, and with all growing businesses, every dollar matters.
What steps should you take to determine who to bring onboard for advice and counsel to help improve your company’s performance and growth?
1. Determine if you actually need a consultant. Consider your staff assets – the skill sets that grow your company daily. Your bookkeeper may provide solutions to improve collection rates. The shipping manager may have the answer to lowering postage costs. Go through your staff’s résumés, including not only their current positions, but also the knowledge and work experience they brought to the company from previous jobs. You want good information and good advice, and you may not have to look outside the company to find it.
2. Develop a statement of work before starting your search. If you decide you need the help of an outsider, a statement of work (SOW) lays out exactly what you want the consultant to do. It also lists work milestones and details what success will look like.
3. Know what to expect from a consultant. Any consultant you hire should provide accurate and precise information, not generalities (quantifiable data). A good consultant provides new perspectives to help you improve your decision-making activities, but he or she is not a substitute for you. Your consultant is expected to perform certain tasks within a given timeframe, but you’ll be there long after the consultant has left the building.
4. Look for a consultant who works within your industry. If you hire a generalist, chances are you’ll get general answers. Hire a consultant who understands your business, your target market, the drives and needs of your demographic – someone who doesn’t have to learn the challenges you face. The right consultant already knows the challenges you face in your market sector.
5. Hire a full-time consultant. Part-timers may not have the time to devote to your company’s challenges. Check professional credentials and certifications from consultancy accreditation associations. The Institute for Management Consultants is a good place to start. Is your consultant a member? Spend a little extra to get the full-time analysis your business needs, and is paying for.
6. Ask for and expect to receive references. Professional consultants with a great deal of experience will be happy to provide references from previous clients. Talk to these previous clients to make sure the prospect under consideration is a good fit for your business.
7. Ask to see samples of the consultant’s reports and analysis. Are the results verified? Is the advice industry-specific? Does the consultant perform a deep analysis, or a once-over-lightly review? Looking at the results of past engagements may provide the insight you need to make the best choice.
8. Interview candidates to find someone who’s not only knowledgeable, but also someone willing to adapt to your company needs – a professional with whom you can work. A consultant can become an invaluable resource when both sides collaborate for the success of the business.
9. Make sure the consultant is unbiased. You don’t want to work with a consultant who’s also advising a regional competitor. You don’t want to work with a consultant who provides advice to one of your vendors – an obvious conflict of interest. Choose a consultant who is not engaged with other businesses in your sector.
10. Create a contract. Have your company’s attorney draw up a defensible contract between your business and any consultant you hire. The contract should detail:
- start and end dates
- activities of the consultant in detail
- work milestones
- payment milestones
- level of support after the engagement ends (phone, in-office, tech support only, etc.)
- terms to void the contract in the event that the consultant isn’t what you’d expected
- an option to extend the contract
Consultants can help you streamline systems, increase operational revenues, and identify problems and opportunities you may have missed. Or, a consultant can simply be a drain on limited business resources. Choose a consultant wisely to get the biggest bang for your consulting buck.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.