Are you a small business owner in need of help? What is the help that you need? Do you need clear vision and strategy, planning, organization, resources, access to capital and the ability to execute, or all of the above? At times you may feel overwhelmed?
Even large companies with senior and experienced management teams and employees struggle with these key components. That is why many entrepreneurs turn to getting paid advice from small business experts or those who offer small business consulting services. Have you ever pursued this path and paid high fees for what turned out to be lackluster results?
Beware of the small business consultant, for you do not want to be creating a money pit where your dollars disappear into a black hole. There are a few criteria that you may want to consider when engaging a small business consultant.
Here are 5 steps:
1. Due diligence. Do your homework and conduct some due diligence on the prospective small business consultant. Be specific in requesting examples or case studies of work that they have completed for other entrepreneurs. They may not be able to share the name of the company, but they can provide other details around the type of company, nature of the engagement, agreed deliverables vs. delivered results. Also feel free to ask the consultant for references and if you can speak with a few of their clients to get feedback.
2. Define the deliverables. Have a well-defined set of consulting engagement deliverables and plan. The last thing you want is to speak high level of the work that you would like the consultant to help you with, assume they understand what you want, and then at the project end there is a gap in delivered outcomes. It is better to be very explicit about your business needs and issues, what you are looking for the advisor to do vs. what (s)he can actually do.
Agree the deliverables including defining any quantitative and qualitative measures of success. Also discuss with the consultant their approach and plan. There is no need to micro manage, however it is your resources being deployed. The consultant should share with you and obtain your sign off on the plan and resources required.
3. Understand the fees. Small business consulting firms can offer a wide array of services such as: business planning, marketing, sourcing qualified leads, brokering equity or debt capital, etc. With each type of service the fee structure may be different and there may be some implicit fees.
For example, some small business consultants charge a flat fee or take a percentage of any debt that they are able to broker for you. Is this made explicit to you and agreed with you upfront? In many cases, the small business consultant may not be fully transparent with you about this cost, and instead agree with the lender their portion of the fees. The lender may embed this fee as a "cost of loan processing" and you may never know your cost of borrowing was increased because of this.
When the small business consultant is brokering anything for you, be aware of if they are getting any tangible or intangible benefits as part of the equation. Do not be afraid to ask your business advisor detailed questions or question any charges that you see.
4. Don't expect magic. Let's face it, entrepreneurship is not easy. Every story of entrepreneurial success such as those of Facebook, Google, Apple, etc., has chapters of deep dark dungeon days when a business owner may have considered aborting mission. Developing a viable and sustainable value proposition which then turns into a viable and sustainable business takes time -- a lot of time. Be honest with yourself in terms of the challenges that you know you face with your business.
Be realistic in the goals and deliverables that you would like to achieve with your small business consultant. The small business advisor is not a magician, and remember (s)he is selling too - their services to you.
5. Trust your intuition. Follow your intuition and hold your business advisor accountable. Many times we are polite. One may not be comfortable with a situation or may feel that they have asked too many questions. Our own self confidence may come into play in that we may not want to feel stupid asking a question or asking the question 10 times.
This is your business, your life, your resources. It is yours to protect. Don't be afraid to ask those detailed, "dumb" or excruciating painful (to the advisor) questions. Hold them responsible and accountable to you. If you do not feel comfortable, don't do it - or keep discussing or asking for clarity in the situation until you feel good about the work you are doing with your business consultant.
If the advisor is being brief with you or jerking you around, then chances are you do not want to be interacting with him/her. Most consultants are looking to build relationships and become "trusted advisors". Thus within reason, they should be conscientious and service oriented.