Why and When to Hire a Consultant

You’re having lunch with a friend. You are discussing the current state of your business and he suggests that you consider hiring a consultant. You have always run you business by yourself. Why get help? Are you getting old and feeble? No one knows more about your business than you do! What can one of these consultants do for you? Consultants aren’t cheap. You haven’t needed one before, why now?

I have heard this many times. The best answer is you hire a consultant or anyone for that matter, when you need something done you can not or do not know how to do. Think about your hiring an attorney or an accountant and why you hire them. Why did you hire that person? You probably hired an accountant to do your taxes, for example. The internal revenue gives us instructions on how to prepare returns, so why did you hire someone to do it and not do it yourself? The reasons are probably because they can do it in less time than it would take you and you might miss or misinterpret a legitimate way to save money. Accountants know things that could save you money. While the accountant is doing the tax return you could be doing something that will help improve your business. Doing your returns, will take valuable time away from your business. The amount you pay the account is worth the time you save. If you don’t think so, put an hourly rate on the value of your time. The amount of money the accountant saves you may be greater than what you pay the accountant. The elimination of aggravation in doing the returns makes paying someone else to do it well worth the expense.

There are all kinds of consultants. They do marketing, sales, profit improvement, human resources, establish incentives for your employees and many, many more things that could possibly be of value to your company. The first reason to hire a consultant or anyone is that this person or organization can do something you or anyone in your organization can’t do. The second reason is similar to hiring someone to do your taxes. This expert can do it in less time and is more cost effective than you doing it. The third and probably the most common reason is to have someone who understands you and your organization and can help in making those difficult decisions.

A good consultant will look at the company’s issue and give a fresh and new view of the problem and potential solutions. There is a lot to be said for working with someone who has done this task many times before. A consultant can add objectivity when they look at aspects of your business. Yes, you have run this business for many years and feel you know more than anyone else about it, but at the same time it may be beneficial to have a fresh set of eyes look at the company. A consultant may help you to solve an issue faster and be less costly. Remember that technology and techniques have changed a great deal over the last year, if not the last five or ten years. Just think about what your mobile telephone now does. Albert Einstein said the first sign of insanity is doing the same thing over and over and expecting different results. Even he had a problem calculating change at a Berlin restaurant.

Over the last ten years, we have watched companies take ideas from other companies and even from different industries and have seen these companies grow and increase profits with their new ways to do things. Southwest Airlines may be the best example of using techniques from another industry, race car driving. They have used these ideas to turn around an airplane and get into the air faster than any other airline. Southwest decided not to do things they way they were always done or how everyone else did it. They let others make mistakes. While you may think you know your business better than anyone else, someone outside your industry should question you on why you do something a particular way and may suggest a better way to do that task. A new approach may save money, free you up to do other tasks, and may ultimately give you a competitive advantage over your competition.

Many consultants are hired to be a sounding board for the owner. The consultant acts like the owner’s partner. You pay them; their loyalty is to you. But be careful, they will probably tell you the truth! A consultant helps broaden the owner’s perspective. Being the owner can be lonely. The employees may only say what the owner wants to hear. The owner is not questioned about a decision or a strategy. A good consultant can ask the hard questions and make sure an idea is thought through thoroughly. This process improves the probability of success in implementing a strategy. It improves the odds that a new strategy is put in place that works as the market changes and a business grows.

Hiring a consultant is not any different than hiring an employee. Make sure you have an agreement up front on what is going to be done and accomplished. Professional consultants want you involved as they work for you. You may want to put a time frame and ultimately a cost budget on the task.

A good consulting engagement can solve many issues. The consultant resolves the issue and sometimes uncovers the real problem and not just a symptom. They don’t forget the basics. Issues will usually be resolved sooner and be less costly by a consultant. The best ones add something you didn’t have before and are worth the investment.

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