The ultimate guide to Hiring a Business Consultant

Who is a business consultant?

Two broad categories, subject matter experts and generalists (advising on business strategy)

A business consultant is an expert on a particular subject matter (like Taxation, Marketing) who offers suggestions and guidance for improvement of your business. Some consultants specialise on the overall functioning of your business instead of any particular matter. They advise you on strategic management of your business.

Other terms also describe consultants in the present day. An advisor, Coach and Mentor, are terms that define people performing more or less a similar task of a business consultant.

Do you need a consultant?

A small business owner will find it challenging to arrive at an answer. Engaging a consultant will need money (whatever be the amount) and with limited availability of funds, is it a prudent decision?

A small business owner does not need a consultant mainly due to the cost involved. But sometimes consultants can help the entrepreneur with a balanced analysis of the business, identify the shortcomings and suggest strategic changes for improving the business. Hiring a consultant could be a significant decision for the small entrepreneur.

When to hire a consultant, finally? Broadly speaking, when the company lacks in-house expertise, need a second opinion on a specific issue or, need to restructure their operational infrastructure.

An area where consultants are known to guide a small business is at the start-up stage. Several entrepreneurs have utilised the services of consultants to find the money for investment. At step one, when funds are required, many small business owners find it hard to arrange documents as per the requirements of banks and other lenders.

The consultants play an essential role here. The new age Fintechs (technology-based finance companies) is a good source of start-up funds, but choosing such a company and dealing with them need domain knowledge which the small business owner may not have. Consultants are experienced in dealing with them (Fintechs) and are a ready source of support to a small business owner for organising funds.

Choosing your consultant Finally

1. Define the purpose clearly

Are you looking at process improvement or you are stuck-up with supply problems or requirements for additional funds, or some specific issues in finance, taxation, marketing or human resource.

2. Finding a suitable consultant

References from acquaintances (friends, other business owners) is a common way; you can also search the internet for consultants. Shortlisting some potential choices and talking to them is the right way of evaluation and selection.

3. Making selection based on your requirements

Matching requirements to services offered (by the consultant) is a critical task. An important criterion of selection should include exposure to small businesses and preferably, your type of business. An otherwise reputed consultant with experience of large companies can be a disaster for your business for lack of proper understanding. Direct communication with the consultant is a must to assess the consultant's potential.

4. Discuss the terms and conditions

Clarify regarding fees and other expenses, work timings and necessary business details required for the study.

5. Background/ Reference Check

You can ask (the consultant) for testimonials from clients. A reference check with some of them(clients) will give you a fair idea of the services.

How a consultant can help?

In start-ups, a business consultant can help in defining the process, rationalise margin, identify opportunity areas alongside developing strategies for the business that is useful from the beginning itself.

The business owner benefits from such pieces of advice by way of better ROI. Instances of a small business owner finding new customers through the consultant's contact are quite common in India.

With technology becoming a dominant factor in every sphere of business (and in life in general) many owners are finding it challenging to keep up with the demands of change. Failure to manage change affects business, both big and small, adversely.

To illustrate, we take a typical example of a small grocery store. The first issue is the changing customer profile in terms of age and gender, and the second issue is the item/brand preferences. On top of that, online retail is taking away a large chunk of sales. An experienced consultant can quickly relate to the scenario and advice on the use of technological means to understand customer preferences and decide on product mix and minimum stock levels.

Arranging for deliveries (at the local level) is not a difficult task and needs only planning. There is a similar example of a professional wedding photographer.

Advanced digital cameras have made photography a simple task, and in many weddings, members of the family or a friend is doing the job. A professional photographer, who, on the advice of a consultant chose the creative route, found his business booming. By changing to a creative style with a theme and a storyline, instead of regular photographs and videos, a unique product is offered which customers cherish throughout life. The videos appear like a short film, creating a significant impact on everyone.

Also read:

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FAQs

Q. I have run a small pest control service for the last five years. I want to upgrade now. Should I hire a consultant?

Ans: To get the best of a consultant, you must define your objectives and expectations clearly at the beginning. Upscaling will involve two primary aspects- additional funds and more customers. Both are separate domains and will require a concentrated effort to find solutions. The owner of a small business is involved in the day to day operations and will find it hard to devote enough time for planning and follow-ups.

Experienced consultants will have information about suitable financiers, will know all the procedures involved and will also be well versed in the various digital marketing tools for customer insights. Therefore, hiring the right consultant will help in developing your business faster.

Q. How do I manage my family business of industrial parts supply better?

Ans: A typical family business will go through phases of change in the vision of two generations. Many enterprises get stuck at the crossroad of growth due to unclear vision and delayed decision-making.

One has to understand that the external business scenario is evolving with time, and if a company is unable to adapt to the changes, survival will be difficult. Competition is growing and many newbies will take help of technology to go ahead, and if you stick with traditional ways your business will have a hard time. There are new ways of finding and servicing customers for every business. Google is a fountain of industrial customer information. But one needs to know the process and tools. A consultant can do the job for you one time and teach you the tricks to stay updated.

Q. Are business consultants worth the money I spend on them?

Ans: Hiring a consultant is expensive, but as long as you reap profits it's worth the expenditure.. Consultants can guide a company on a range of issues and provide solutions. Different consultants bring different expertise to the table. Identifying the primary need and objective for hiring a consultant must be fixed at the start. In most cases for a small business, direct results answer the question of justification.

Q. What is more important for choosing a consultant, the experience or the educational background?

Ans: A consultant's job is to study, understand and find solutions to your business issues. The right educational background enables an individual to understand problems in a proper perspective. The experience provides the direction to reach to the core (of subjects) and decides on the best solution.

It is necessary to choose a consultant having experience of handling similar assignments. The process of selection is critical and needs proper attention in terms of time and energy. A wrong choice will turn out to be costly for the business.

Q. I operate my business in a small town. I am facing problems in following up my receivables and in two minds for further expansion. Can I get the services of a consultant?

Ans: Professional consultants are available across India. If someone with the desired experience is not available in your place, you can always hire someone from a different city. Directories (for business consultants) on the internet can give you town-wise details.

Improved methods of communication today have made remote working easy and convenient, and a consultant can work out a solution for you without physical presence. Companies are offering digital support to the account and customer management, and some them in regional languages as well. OkCredit is one such company offering reliable app-based digital account management.