There are more than 17,000 small businesses in the US that employ people.
There are more than 500,000 consultants in the US. While I recognize that not all of these consultants serve small businesses, that’s still a pretty overwhelming ratio of almost 30 consultants for every small business. Here in Washington, when I go to a networking event of some sort, I invariably meet at least five or six consultants for every small business owner I meet…and all of the consultants have the same business advertisement—they will help you grow your business.
If you own a small or medium-sized business, you may need to engage consulting assistance. Here’s why and here’s how:
- Consultants are not employees and so are ideal for short-term assignments. And they don’t absorb benefits. You can engage assistance as you need it without commitment to a long-term relationship.
- You can engage a much more senior and experienced individual as a consultant than you could afford if they were an employee.
- You can pick and choose among consultants to select exactly the expertise you need to deal with your current business realities…especially if you’ve arrived at an inflection point. How do you know if you’ve arrived at an inflection point?
- Your team keeps telling you that “market forces” are causing you to lose business.
- The metrics you use on your business are not giving you answers.
- Your team is spending more and more time in meetings.
- Loss debriefings are painting an entirely different picture of your core competencies (or lack thereof) than you have come to believe.
- You haven’t spoken to a customer for the past month or more.
- First, define your need as precisely as you can. This will give you a solid picture of the skill set you are seeking to engage. Is your new business win rate in single digits? You need a BD professional. Do you seek to sell your company? Then you need expertise in preparing you to maximize value for that event. Are you hobby-shopping some software? Then you need a software development and marketing specialist who can tell you if you are pursuing a pot of gold or a fruitless dream.
- Second, look at the backgrounds of candidate consultancies to see if they have walked a mile in your shoes. Be wary of “experts” on growth who have never run a business or financial gurus who have never been a CFO in the real world. Find out what their specific accomplishments have been.
- Third, consider launching an Advisory Board as a way to obtain expertise and also as a way to screen advisors for more central roles in your consulting portfolio. The Advisory Board not only drives a certain amount of discipline in your management processes, it also enables you to quickly discern advisors who add value and discard those who do not seem to fit.
This is not to gainsay the feelings of business owners who go with their gut on personal relationships and make advisory/consulting relationship choices based on those feelings. A level of personal trust is very important in a consulting relationship…but if you note the bullet points above, there’s nothing in there about personal feelings. What’s more, if you engage a personal friend and they give you no results, you have a real conflict in disengaging them even if it’s the right thing to do. I recently became aware of a company that went down the road with a personal friend to work on a strategic transaction. After more than a year, no transaction happened. They then compounded the problem by bringing in another personal friend of a personal friend and again, nothing positive happened…more valuable time lost. Asking the questions above would have prevented the situation.
Please share your experience with consultants!