When Should You Hire A Business Consultant?
If you’ve been a business owner for a considerable amount of time, has the thought, “Should I look into hiring a consultant?” crossed your mind?
Then come the rebuttal thoughts... “consulting is too expensive,” “how would I know for sure it would help,” “what would my employees think of me,” “what if I waste tons of money and make no progress?” The doubts go on.
On top of that, even if you decide you need a consultant, where do you start? Your neighbor Joe said he knows a retired CEO who could help. Your CPA has been trying to get you to pay them more for “consulting work” for years. You also recently heard about a new book that would solve all your business issues, which would be cheaper... but doesn’t sound promising.
We get it. The idea of consulting can be intimidating.
And don’t worry, this isn’t some lame attempt to sell you our consulting services. By the way, if you weren’t aware yet, we are consultants ;)
Rather than give you a pitch, our hope is to have a real conversation about knowing when you should consider hiring a consultant and when you probably don’t need to.
So let’s jump into it…
First, it’s important to answer the question - what is consulting. There are dozens of types of consultants. Our firm specializes in strategy, execution and coaching, so for the sake of conciseness, that’s what we’ll focus on for this discussion.
To put it simply, consulting means hiring an expert to step into your business to help you solve problems and/or capitalize on opportunities.
How do you know when it’s time to consider a consultant?
Well, there’s a lot that goes into that question. We certainly don’t want to make any generalizations, situations are always relative, however, there are a few key signs that may mean it’s time...
Culture - How would your employees describe your culture? Not how would you want them to, but if you weren’t sitting next to them and we asked, what would they say? Would they say your team lacks accountability? Or they don’t understand what’s expected of them and what success looks like in their role? Perhaps they would talk about how they feel like they’re always putting out fires. Maybe your turnover has been poor in recent years. What could your team accomplish if they were focused, aligned and accountable? If the answer is, “way more than they are now,” then you should probably consider consulting.
Leadership - Leadership and Culture go so hand in hand, it’s hard to separate the two. We want to challenge you with this question... Do you have a strong, capable leadership team in place who could continue running operations and driving the business without you there? If not, you need that. Better yet, you deserve that. Every business owner should have the freedom to step away for a two-week vacation and not feel like their business will hurt because of it. Not to mention, a strong leadership team is a huge value add for future succession and valuation.
Operations - Do you have a turnkey solution in place? In other words, if Frank, your Head of HR or Suzy, your VP of Sales, were to step away tomorrow, could you get the next person the tools and resources needed to be successful… quickly? Do you have documented core processes that anyone could follow? At the end of the day, people run processes and processes run businesses. If your processes are all over the place, disjointed and inefficient, it might be time to consider hiring a consultant.
Financials - If you pull your Profit and Loss Statement and your Balance Sheet, would you have a firm grasp of the financial health of your business, or are you judging that based on how much cash you have (or don’t have) in the bank? Is your top line revenue growing, but your bottom line staying stagnant or shrinking? Do you have unpredictable growth, never able to forecast or budget? Or perhaps you don’t have reconciled financials, and there’s no real way of knowing until you get the numbers over to your CPA for taxes. Life as a business owner doesn’t have to be this way. There’s a better way.
Opportunities - Maybe you’ve read this far and you’re thinking, “Sure, we have some of those issues, but certainly not all of them. I still don’t know if we need a consultant.” The last point we want to mention is "missing out on opportunities". Do you feel like you have a good business, but want it to be a great business? Or are you at $2mm and you feel like you could/should be at $20mm in the near future, but you’re not sure how to get there… then we would highly recommend considering a consultant.
Now, we want to be fair, not every business needs a consultant. We’ve met with business owners, and after a conversation told them, “You don’t need us.” Not because we didn’t want to work with them, but because they had it figured out more than they realized.
If you have a business with a healthy/accountable culture, a leadership team who is taking ownership and making their direct reports successful, employees who are finding fulfillment in their work, efficient operations, healthy financials with profits that allow you to reinvest back into the business, and a clear vision the company is rallied behind… you probably don’t need a consultant. And we’re not saying that sarcastically, we’ve seen many businesses who get these things right. They may be few and far between, but they are out there.
In closing, if you feel like you may need a consultant, don’t let the idea of finding the right one intimidate you. We would encourage you to take your time evaluating your options. Find a consultant you have chemistry with and that you can see yourself working alongside. Ask tons of questions. And run for the hills when you meet one who says they have all the answers. Lastly, if you need help finding one, we’re happy to try and point you in the right direction... even if it’s not us.