Everything you need to know about small business consultants.
Small business consultants give business owners advice on strategy, problem-solving, and developing skills. They also come up with resources and layout a plan to improve an organisation’s performance. Overall, small business consultants are contract workers that will spot problems, implement solutions, and achieve goals.
Consultants can be an important tool for small businesses that can’t afford full-time employees year-round, need a third party to solve a company issue, or want an expert to give advice and strategies.
What does a small business consultant do?
A small business consultant might design a business plan, marketing plan, or public relations campaign. They can specialise in certain areas such as accounting, operations, human resources, management, marketing, or public relations.
A business consultant is simply an outside expert you hire to solve an internal business problem. A good consultant is a great source of specialised knowledge. A great consultant brings knowledge, skills, experience, and process to improve the client’s condition.
Unlike in-house employees, consultants have independent schedules, may have multiple clients, and are hired on a contract/project basis. Depending on the consulting firm, consultants may work alone or may bring their own team, which typically includes one project manager and two analysts.
Why do people hire small business consultants?
Small business owners hire consultants as a cost-effective way to bridge a gap in knowledge and skills within their company, or as a way to bring a fresh, objective, and professional perspective to the company.
Here are the most common reasons why our clients turn to consultants for help:
Save time and money
Are you still doing the taxes for your business? If so, does it make sense for you to spend your valuable time on such a complex task that also may be outside your area of expertise?
What about other financial issues that small businesses typically grapple with, like controlling costs or increasing efficiency? A small business consultant can assist you with the development of strategies for making improvements on both fronts. And if your venture is on the fast track for growth, a skilled consultant can provide insight that can enable you to seize new opportunities while avoiding common pitfalls that could derail your success.
To find the problem(s)
In many cases, a business may be exhibiting problematic “symptoms”, such as a decrease in sales, or cash-flow issues, and internal management is unable to pinpoint the source of the problem. In this case, a consultant can come in observe the symptoms within your operations, conduct some tests and research, and determine the root of the problem.
To create the solution(s)
In some cases, you may have a goal that you can’t achieve internally either because there is a skills gap or because it is simply not within your company’s core competency. Hiring a good consultant can save time and money, and ultimately achieve a better result.
In some cases, your company may have grown very quickly and known there are lots of things you could be doing better, but you don’t even know where to start. A consultant can come in and bring in some fresh perspective, evaluate any or all areas of your business, and determine the processes and procedures to increase productivity levels.
Tap expertise at the right time
Even if you would prefer to tackle all business matters personally, engaging an outside expert when especially complex or sensitive issues arise can be an extra measure to ensure problems receive proper attention and are thoroughly resolved. It also can be useful to have a third-party’s perspective on matters that require objectivity, or an “extra set of eyes” to verify that no mistakes have been made in a critical process.
You can also look to a small business consultant for help assessing and evaluating your business strategy, processes, operations management, supply chain logistics, exposure to risk and more. Also, because you may only need to access this specialised expertise for a short period, engaging a consulting resource can be an efficient way to tap the expert knowledge your small business needs at just the right time and only for as long as it is required.
Navigate changing workloads
Here’s an essential question for every small business owner to consider: If you would need to ramp up your small business suddenly and significantly, could you deliver?
If you don’t have ample support to meet an increase in demand for your products or services or to create new offerings, you could be at risk of disappointing your customers — and potentially damaging your business’s reputation.
You could also end up burdening your core staff and undermining their on-the-job happiness. But of course, you also want to avoid hiring more employees until you are certain that workloads will be sustained.
Grow for the future
You want your business to succeed and thrive over the long term, of course. But do you know where your future growth will come from? Engaging an interim management consultant with relevant industry experience to support your small business not only can help you determine the answer but also get you pointed in the right direction.
There are many ways for you to work with consultants as your small business grows and changes. Most important, perhaps, is that these resources can give you the valuable time needed to focus on what you do best: Developing your small business and being an expert at whatever it is that led you to launch your own company in the first place.
Services a small business consultant might perform
Sales and marketing consulting.
If you’re an expert or have worked in sales and marketing, you can easily transfer that knowledge as a small business consultant.
Successful is essential to attracting and retaining customers—the number one need for most businesses, especially startups.
Unfortunately, marketing is highly specialised, and while many small business owners excel in providing products and/or services to their customers, they often are less proficient with marketing and cannot afford full-time salespeople.
The right marketing consultant for your business should have a high level of expertise in your industry and be able to bring in fresh ideas as well as tried and true advice on how to develop strategies and campaigns.
Marketing consultants can work with your business to establish and implement strategies based on:
- your overall business goals,
- your products or services,
- your target users or clients,
- your company’s role in relation to the competition.
Consultants also can design and implement individual marketing campaigns and provide general advice on promoting your business through activities such as:
- Social media campaigns (Facebook, Twitter, etc.)
- Email blitzes
- Website and/or blog promotions
- Radio or newspaper ads
- Press releases
- Charity event sponsorships
- Cross-promotion through buddy marketing with other businesses
A small business consultant can work with sales and marketing teams in a number of ways. For example, they can come up with a digital strategy, a marketing campaign, or work on the web development or training side of things.
To illustrate, let’s say that a company contacts a consultant because their sales team hasn’t been performing well. A small business consultant will come in, observe, identify the problems (whether they’re operational or training based), work on strategising a solution, and then implement it.
Dealing with personnel-related issues often is difficult and time-consuming, and many small businesses cannot afford the expense of a dedicated human resources (HR) individual or department.
However, businesses with effective HR strategies typically have better working environments and higher morale, which increases employee retention and lowers turnover costs. As a result, more and more small businesses are outsourcing their HR functions.
Professional HR consultants are trained and knowledgeable in all aspects of employee relations and can:
- handle the recruitment of new employees or contract workers, including advertising, interviewing, background/reference checks, etc.
- deal with disciplinary issues and terminations;
- handle employee orientation and organise proper training.
- manage employee safety and welfare concerns;
- provide counselling to employees;
- limit your legal liability by ensuring that employee complaints or disputes are properly handled;
- keep you abreast and in compliance of state/provincial and federal regulations regarding employees, such as wage laws, hours of work, holiday time, leave of absence, workers’ compensation, mandatory benefits, and reporting;
- arrange/provide optional benefits such as health, dental, vision, and disability insurance for employees and their families. HR firms often can leverage their relationships with benefits providers to offer affordable employee benefits packages.
Having a good business lawyer available when you need one can be valuable when confronted with circumstances that involve more complex legal issues or may involve liability, such as:
- complex partnership agreements or share allocations;
- lawsuits involving partners, clients, shareholders, or employees;
- legal action against your business by government agencies for issues such as licensing, tax disputes, or non-compliance with regulations;
- real estate purchases or lease agreements;
- trademark or intellectual property rights issues;
- franchise agreements;
- selling or merging your business, or purchasing the assets of another business.
A typical small business attorney is a generalist who can analyse your problem and provide solid advice or refer you to someone more specialised in a particular area of law if required.
Project management consulting.
One of the main reasons that companies hire small business consultants is for project management.
Let’s say a company has a new product or launch coming up, but they aren’t sure how to strategize for it because there are only five employees and none of them works in project management.
That’s when a consultant could come in and either train your employees on how to handle the project or work as a contract project manager.
Additionally, if a company has operational inefficiencies long-term, they might consider hiring a consultant to spot the inefficiencies and come up with a plan to improve the organisation’s project management.
A consultant can help a company with reporting in two ways: they can gather analytics and reports, and they can analyse the reports that come in.
This is a service that a company might want to hire a consultant for on a longer-term basis. With reporting, a small business consultant will help a company collect and understand the analytics or reports so they can make smart business decisions based on data.
If a company or owner tries to do this on their own, they could misinterpret the data or not understand what the numbers mean contextually.
When a small business is just starting out, they need to have projections and forecasts for how things will go in the near and distant future.
However, forecasting is hard when you don’t have ample resources, time, or personnel to gather the data and analyse it. That’s when a small business consultant can come in. They’ll work with the company to understand and put together proper projections.
With a small business, choosing the right technology and getting the system set up efficiently isn’t easy.
That’s why companies hire consultants for IT services. A consultant can help choose the proper technology and ensure the technological systems are set up correctly and efficiently.
IT is one of the most rapidly changing fields in business as new technology regularly impacts devices or software systems including:
- Desktop computers
- Mobile devices (laptops, cell phones, tablets, etc.)
- Cloud computing services
- Point-of-sale (POS) systems
- Business websites and social media platforms
- Word processing, spreadsheets, etc.
- Accounting software
- Tax software
- Computer-aided design (CAD) systems
Unless your business is in the information technology field or you are otherwise proficient with maintaining hardware devices and solving software issues, an IT consultant is recommended.
In addition to repairing hardware and operating systems, an IT consultant can perform other duties, including:
- Ensuring valuable business data is backed up in case of emergencies;
- Setting up cloud computing services;
- Installing software systems;
- Providing training on hardware and software systems;
Advising on technology upgrades and methods of using technology to streamline your business and improve productivity.
If a company has been up and running for some time, a small business consultant can help identify technological inefficiencies and then figure out a solution to improve a company’s system and processes.
Accounting and Bookkeeping
Accounting and bookkeeping are two of the most common consulting activities needed by small businesses. When deciding whether or not to contract out some or all of your bookkeeping or accounting duties, ask:
- What is my time worth?
- Can I do as good a job as a professional in this field?
For a solo enterprise or the startup phase of a small business, you may have time to handle bookkeeping and some accounting chores if you have the desire and aptitude.
However, as your business grows, it may make more sense to farm out some of these duties to professionals. Besides, many business owners find bookkeeping/accounting a tedious chore, especially if the business has a high level of transactions.
In as little as a few hours a month, a good bookkeeper can do most of your record-keeping, including submitting invoices, paying bills, doing payroll, and prepping the company accounts for tax season.
A good accountant can do much more than keep you abreast of tax changes and doing your taxes. He/She can:
- navigate the maze of tax laws and provide the financial advice you need to manage and grow your business;
- make recommendations on how to lower your taxes, such as whether or not to incorporate or if you should lease or purchase commercial space;
- provide advice on ways to cut business costs.
Accounting is another service that a small business might hire for the long-term. With a small team, having an accounting department might not be financially worth it. However, every company needs an expert managing and looking at the finances.
A small business consultant who specialises in financial management, can come on and help spot areas where a company needs to hold back monetarily, set up payroll, or help with taxes. Finances and accounting are one of the hardest things to manage for a small company, but it’s one of the most important areas to set up accurately and efficiently.
At its core, small business consulting is about strategic planning. A small business consultant might help plan strategic messaging or launches.
The role of a small business consultant is to identify issues and strategically plan solutions. Essentially, they are creative problem solvers that can specialise in any area of business and help small business work more efficiently.
A small business consultant can help you run your business, by planning your business strategy and in some cases even executing it.
But not all consultants are created equal, and not all businesses or business projects are created equal, either. You’ll need to consider why you’re thinking about hiring a consultant, and how long you’re willing to wait before you see results, and how much you can realistically afford to pay for their counsel. Then, you need to find a consultant that you really click with. When all of that comes together, you’ve positioned yourself for success.