Small business owners have a lot on their plate. But who can a business owner speak with for advice on business strategy? Another business owner may have some advice, but do they have the industry-specific experience to answer all your questions? Friends and family mean well, but they rarely offer accurate, constructive criticism or have the specialized knowledge of overcoming obstacles to business growth. An external consultant can help. Over 40% of small business owners
have hired a consultant or consulting firm. Small business owners can meet with an individual consultant or consulting firm when they:
- Want an objective perspective on business strategy.
- Need advice for upgrading technology or processes.
- Want them to help diagnose business growth issues.
- Don't have or need a full in-house staff for a certain department.
- Need help starting and completing a short-term project.
While not every business necessarily needs a business consultant, choosing to work with 1 can provide several benefits outside of solving your immediate challenge. But before we can dig into the potential benefits of small business consultants, let’s look at what a business consultant actually does.
What does a business consultant do for companies?
In a nutshell, a small business consultant helps an organization overcome challenges to business growth. The right consultant will often have years of experience in your specific industry.
A good consultant can map a business strategy, assist with a digital transformation, or improve a specific department's operations.
A good consultant can map a business strategy, assist with a digital transformation, or improve a specific department's operations. Business consulting services are often applied to:
- Financial services
- Human resources
- Information technology
- Legal advice
- Risk, compliance, and security
Of these, 74% of businesses
hire strategy consultants, and 61% hire help for human resources. In another study
, 30% of small businesses brought on IT experts in 2021, followed by marketing consultants, legal advisory consultants, and financial advisory consultants. When you hire a business consultant, you get more than expert advice. An experienced consultant will follow this process:
Initially, your consultant will need to learn more about your specific business. They will likely want to meet the team and your employees, tour the facility, and review company materials. During this period, a good consultant will also pinpoint business objectives.
At this point, the external consultant will combine their review of your business to industry benchmarks, as well as research competitor strategies.
Your business consultant will summarize their findings in a presentation or evaluation. Seasoned business consultants will include not only the stated problem but also any other new potential issues they've discovered. They will also provide a list of recommended steps and solutions they believe will remedy the issue.
Some consultants will stop with providing their evaluation and check in later on. However, others assist with the solution implementation or may offer ongoing consulting services. Regular business consulting services are common in human resources and marketing strategy, in which the consultant essentially helps manage a small or remote department. If you hire a consulting firm rather than an individual consultant, they may be able to provide you with various points of view from a consultant team, as well as offer extensive resources. You will need to decide which option best matches your budget. Consultants can charge based on the project, hourly rates, a monthly retainer, or value-based percentages. Consultants and firms charge anywhere between $5,000 to $20,000 per project, although $100,000 isn't unheard of, either. You will need to factor in how a consultant is paid as well as their expertise when selecting a sound candidate. It’s also important to note that a business consultant is not a business coach. A coach will guide and motivate you as an owner, but you are still the business leader. A consultant, meanwhile, will offer a specific solution for you and, in some cases, will help implement their recommendations. As a result, business consultants often provide solutions faster and more efficiently without adding to your workload.
What are the benefits of hiring a business consultant?
There are several benefits of hiring a consultant or consulting firm, including:
Faster changes and implementations
Instead of trying to research and solve every possible solution yourself, the right consultant can streamline the entire process. Want to digitize HR but don't know the best HR software
for your needs? Or need to improve cash flow processes in your accounting department? Various projects can be solved more quickly and efficiently with a small business consultant's expertise.
Hiring a consultant to solve immediate problems or set up specific processes is more cost-effective than hiring a full-time employee to do the same work. For example, a local restaurant might benefit from a marketing consultant to plan an effective but lean method for advertising their promotions. Or a new business with just 10-20 employees might hire an HR expert to figure out automation or digital solutions to lessen their workload.
One of the benefits of bringing on a good consultant is that they can tailor a solution for your business. Many solutions online and offline are packaged as templates and may not integrate well into your business without significant tweaking. But a business consulting professional can pinpoint specific problems with your business and offer unique solutions.
An objective, fresh perspective
At the end of the day, it helps to have a 3rd party come in and give an objective, impartial opinion. As a business owner, it's easy to become so close to the work that it's hard to see new strategies or options. An experienced consultant will take a look at your business operation with fresh eyes and be able to give honest feedback and a strategic plan to boost revenue.
How often should I meet with a business consultant?
Ultimately, this depends on the project. Meeting weekly or bi-weekly is normal for an intensive project, but you may meet once a month for an ongoing project. Contracts usually last between 3-6 months, but depending on the business need, the collaboration may last longer.
7 best practices for working with a small business consultant
To get the most out of working with a consultant, a business owner should:
- Set clear goals and objectives in your discovery meeting, and discuss how you will track progress.
- Hire business consultants with specialized knowledge in your industry.
- Treat your independent consultant as a partner, not an employee.
- Follow the action plan as closely as possible, but don't follow recommendations blindly.
- Review what others say about a specific consultant or consulting firm before engaging with their services.
- Document your time working together.
- Clarify preferred communication channels.
Jump-starting your digital business transformation
Let’s be real, it’s much easier to focus on business strategy with repetitive tasks being automated and digitized. Two business operations that are easily optimized through technology are accounting and human resources. Yes, you still need a person at the helm, but removing low-value tasks from the workflow can help you boost efficiency, reduce costs, and maintain compliance. But where do you start? If you’re interested in digitizing your HR operations, many options are available. But before you hire a consultant or start researching solutions, it helps to have a checklist.