How to Hire a Small Business Consultant
Owning a small business often means that one must be adaptable and make changes based on the needs of the market. However, it can often feel overwhelming and daunting to know where to start. In this article, we discuss how to hire a small business consultant to provide the necessary guidance to a small business owner looking to make changes to their business.
What is Small Business Consulting
In general, a consultant is someone who is hired from outside of a business to provide guidance, insight, and expertise on a topic that the business is looking for. These consultants provide advice for a small business on how to improve or grow their business using strategies, necessary skills, and resources. Consultants are not usually hired to complete tasks on behalf of a business; rather they come up with a plan on how to improve so the business can implement the changes. Small business consultants specialize in the needs of a small business, no matter the expertise.
What Businesses do Small Business Consultants work with?
Small business consultants work with any business considered a “small business.” According to the Small Business Administration, the size of a small business depends on the industry and is determined by revenue or number of employees. For example, retail and service organizations are considered small if they do not exceed $6 million average annual revenue. Many small businesses that hire small business consultants are family-owned businesses that have existed for a long time but need help to update their business or make changes to match the market. Alternatively, if you are a startup looking to create a business but need some outside help, a consultant may be perfect for you.
What are the Most Common Types of Small Business Consulting Services?
Because consulting is being an expert in a field, there are many different types of specialties within the small business sphere, but here are examples of a few of the most common:
Marketing consultants will provide a clear marketing strategy that will include necessary updates to websites, social media, branding, and how a business can improve its SEO (search engine optimization) in an effort to grow sales and awareness.
IT consultants are experts in informational technology and can provide guidance when a business needs to make changes to its technology. An example of this could be updating phone lines or internet capabilities to ensure that they are secure. The IT consultant would provide an action plan that would best suit your company.
Accounting consultants provide expertise on updating the business’s accounting best practices, including using the correct technology, bookkeeping, and ensuring they practice the most current IRS guidance.
Project or Change Management
If your business is looking to create or launch a new product, service or going through a major change, a management consultant that specializes in project or change management will be an asset to ensure that all steps are thoroughly prepared before steps are taken.
Business strategy consultants work with small businesses to review business plans to ensure that they are actionable, robust and improve the bottom line. If you are a small business owner who is unsure why your business is not thriving as much as you expected, hiring a business strategy consultant will be key as a first step to getting some answers.
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Should I Hire a Consulting Firm or Hire a Freelance Consultant?
The process of recruiting the right consultant can be overwhelming. There are two different ways that you can approach finding the right one for you. You can find a consultant via a firm or through an independent freelancer. In this section, we discuss the positives and negatives of both options.
Positives and Negatives of Working with a Firm:
Positives and Negatives of Working with Freelancers:
Finding the Right Fit
Why You Should Hire a Small Business Consultant
As a small business owner, you have put your blood, sweat, and tears into your business. For many, their business is an actualized vision of their passion and expertise. However, no one can do it all alone and you may be at a turning point in your business where you are looking to make a change or grow. By hiring a small business consultant, you can reap the benefits of an expert to take your business to the next level, while only hiring this person for a short time.
Hiring a Small Business Consultant
Here are some tips to consider once you are ready to hire a consultant firm or freelancer for your small business.
How Much Does It Cost to Hire a Small Business Consultant?
Costs associated with a consultant vary depending on the skills and expertise needed. It can also range depending on if you are looking at a freelancer (cheaper) vs hiring via a firm (more expensive).
There are several pricing structures to keep in mind when hiring a small business consultant:
Skills to Look for When Finding Help with Small Business Consultants
Regardless of pricing structure, there are some skills to look for when hiring a small business consulting firm to help your business. These generally apply to almost every industry and product and should be a part of your review process.
As for the price itself, consultants are encouraged by the SBA to charge based on how much they would have made in a year as a full-time staff member, divide the salary by 52 work weeks and then by 40 hours. From here, consultants often upcharge around 30% to account for overhead. For example, if a Marketing Consultant were making $75,000 a year in a previous role, their hourly rate could be $47/hour. However, this model works best for freelancers and newer consultants. As they grow their business, they will charge more over time and firms have their own overheads which may mean that the hourly rate can triple.
Because the prices vary based on the type of expertise, pricing structure, experience, and if it is a freelancer or firm, it is hard to state a pricing average. However, when creating your RFP (request for proposal), be sure to come up with a budget for yourself and do the research on the specific expertise you are looking for.
How to Find a Reputable Small Business Consulting Provider
There are several consultant-focused search engines including Catalant, Graphite, and GRG. These sites allow you to post your exact needs, and experts will bid their expertise and costs for you to choose from. LinkedIn also has a tool called Pro Finder, where you can look for freelance consultants. Finally, the Association of Accredited Small Business Consultants has a member directory where you can search for a consultant.
And then there are good old-fashioned referrals. Reach out to your network and ask who they have used for consultant needs in the past. This is where you will likely get the most candid responses, which is important when considering an investment of this magnitude.
PRO TIP: Before reaching out to a consultant or firm, do your research! Read reviews and testimonials so that you understand the freelancer or firm’s reputation and expertise, and ensure they have a track record of success.
How do they Present Themselves?
When looking at a firm’s website, review how professional and up-to-date it is. When looking at a freelancer’s post on a search engine, review how detailed it is. Do they have examples of previous work? Are there testimonials? The post or website should provide a lot of basic information for your search so that you understand their culture, skills, and expertise.
Signing long-term contracts
Until you know how well a small business consulting firm can do, you shouldn’t lock your business into any long-term commitment. Terms should be flexible, with opportunities for more partnership and growth as things go well.
What Are Their Credentials?
Depending on the consultant work you are looking for, you want your candidate to have adequate credentials or education. For example, if looking for an accounting consultant, they likely should be a CPA. The Association of Accredited Small Business Consultants also provides accreditation to consultants as well.
Questions to Ask a Small Business Consulting Provider
In general, here are some questions you should ask when talking to different freelancers or firms:
- What is your specialty?
- Are you a full-service company or do you specialize?
- What is your pricing structure?
- What is your business culture?
- Have you worked with a business like mine before?
Consulting is a large market, so be targeted in your questions so that you can easily weed out those that do not suit your needs and business culture.
Expert Tips for Choosing The Right Small Business Consultant
UpCity surveyed business leaders across a variety of industries for their wisdom on finding a consultant that’s the right fit.
In your opinion, what are your top tips for finding and hiring a great business consulting firm?
“Make sure they align with your brand. Make sure they have proven success in your industry. The team—find out who is going to be involved on your account and get to know them (to see if you trust them). Trust that they can get you to where you’re going. Be very clear on what your target/objectives are. Make sure they understand your KPIs and are comfortable not only to meet them, but they are excited to exceed them.” —Ayman Hbeichi, Director of Sales & Marketing, AH Media
“Ask who they have worked with and how successful they were with their projects. There are consultants who are great at pitching you but have no track record of success. Due to this, it is important to ask the firm about its previous experiences with a similar issue to yours or with a company like yours.” —Alexandra Van Doren, Co-founder and Senior Dynamic Social & Content Integrator, Agency onethree
“Interview at least three companies so you can compare quotes/approaches/outcomes. Ask them about their processes—I’ve learned the hard way that pros distinguish themselves by having solid processes in place. Ask them for references you can contact, and ask questions that are specific.” —Katherine Lesperance, Founder and Marketing Strategist, Sensible Marketer
“Some businesses are pretty cautious and shy away from speaking about the project at the start or middle of the conversation. You can easily save a ton of time by speaking freely about the budget requirements and expectations upfront. With financial advice, your consultant will provide you with a succinct strategy that will bring you to your desired conclusion in the most effective way possible while maintaining within the constraints of your budget.” —Sujan Pandey, Content Manager, Planned Growth
What traits should you look for in a skilled business consulting firm?
“Many consulting firms try to differentiate themselves by offering a variety of services. The problem with this is that it can be confusing, and often the services that you initially need are not going to be the ones that you end up needing in the end. In general, it is best to start with a firm that specializes in your business, rather than one that does a lot of different things. The one trait you must look for in a business consulting firm is their understanding of your business due to their prior experience.” —Ann Young, CEO, Fix The Photo
“You will want to make sure the consulting firm’s ideals align with your own. It won’t be helpful if they recommend an area or way to grow that isn’t a good fit for your company’s culture or morale.” —Jordan Slover, CEO, Neon Ambition
“A skilled business consulting firm will be able to answer tough questions in a way that’s easy to understand. You will have tough questions regarding your business, so you want to be sure that the firm can answer them clearly.” —Shaniah Zenor, Director of Operations, Phvntom Inc.
Are there any mistakes that you should avoid when hiring a business consulting firm?
“Don’t get swayed by reviews, testimonials, and press releases. Nor should you ever make a decision based on a website or downloadable material alone. Also, larger, more expensive firms are not always the right decision. The best firm for you is one that suits your need and understands how you communicate.” —Xiao Faria daCunha, Founder & CEO, Westerlund, Co
“Before hiring a business consultant, ensure your organization is ready for a third party to be poking around. If your leadership is not aligned, this will quickly build friction into the relationship. Communication is a key component of any relationship, so honesty and transparency will work in your favor. The relationships that work best tend to have scheduled communication intervals, allowing both parties to spend quality time to meet rather than sporadic inbox engagement.” —Christopher Nault, Founder, Growth Marketing Firm
“Avoid the promise trap that is given to you when they figure out what you want. Get evidence first that what you want is what you need, and second, that proves the claims they make that are important to you. Always be suspect of low-cost providers in consulting, you typically get what you pay for, and frequently less as well.” —Adam Radulovic, CEO, XL.net
If you have already decided to hire a small business consultant you can expect them to gather information, identify key opportunities, and use the information collected to build out a strategy and plan for your business.
After signing with a firm or freelancer, you can expect:
- Establishing the objective of the project or overall needs.
- Creating a communication protocol that instills collaboration and consistency
- Upon completion, a full report on suggested updates and needs to complete objectives.
- If hiring a freelancer or firm for a post-strategy plan, a contract with costs, updated communication protocols, and deliverables listed.
Do you have any questions about hiring the best small business consultant for your business? Check out our list of top recruiting agencies in both the United States and Canada for further information.
About the author
Haldis Toppen is the Director of Communications of the cultural exchange organization, Greenheart International. With 10 years of experience in leading marketing and communication teams, Haldis has a proven record of successfully leading national campaigns and international programming. She is passionate about bringing the right message to the masses and finding those audiences who need to hear it!