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Hiring a Consultant to Help With Your Startup: The Dos and Don'ts

Apr 08, 2021

Your startup can be a profitable vehicle for your ideas and entrepreneurial ambitions. With a robust business plan, helpful resources, and a solid work ethic you can make a serious impact in your industry. However, there will often come a time at which your best efforts are not enough to get you over a hurdle.

This is where hiring a consultant can be useful. When you’re unable to bring on a permanent member of staff to meet certain needs, but still require expert input for your projects, engaging a consultant can help bridge the gap to get you on the right path again. However, it’s important to understand that just as they can be a boon to your startup, choosing the wrong consultant to collaborate with can cause serious disruption and waste precious time and resources.

Let's take a closer look at some of the key dos and don’ts that you should be taking into consideration on the matter.

Understanding Your Needs
Your first steps are establishing exactly why you think you need a consultant, what your goals for them will be, and what their role will be.

Do
Go into detail about the challenges you’re facing that you believe only a consultant can address. Brainstorming this visually will help to formalize this for you and confirm what elements your business can’t currently handle. Create a document that outlines the full needs of the project and what the consultant’s responsibilities must be. This will also help you to identify the type of consultant you need. For instance, if your needs surround a lack of understanding about how to apply for additional funding, where to obtain financing, or even how to effectively grow your business, this could indicate that you can benefit from consulting with a financial consultant. Whatever the project, it is essential you gain a clear idea of what you expect a consultant to bring to it.

Don’t
Letting a consultant dictate your needs to you can be problematic. This can feel like a natural direction to go in — after all, you want to bring on someone who has more expertise than you do. However, this can lead to losing control of the direction of your project or your business. The process should be treated more like a collaboration; seek their input but not their leadership. Don’t skimp on educating yourself about your needs and make sure you are clear about communicating their role.

Considering Consultants’ Value
Remember that hiring a consultant can represent a significant up-front cost. So, you need to take some time to understand whether collaborating with a consultant is not just cost-effective but valuable to your business’s ability to move forward and generate income that justifies the expense.

Do
Aim to be pragmatic about the valuation process. You can certainly measure it simply by looking at how much a consultant will cost, and what income you expect to generate as a result of them helping you to unlock doors. But also think about the long-term value their engagement might provide. Among the main reasons that businesses fail is a lack of knowledge — the leadership doesn’t have an education in the field, there are things they haven’t considered about their market, and often that they are unwilling to learn. Talk to your prospective consultant, look into their background, and establish whether they can also teach you that opens up opportunities and can provide value over the lifespan of your business.

Don’t
Overlooking how consultants charge for their services can result in you missing out on key insights into how they generate returns for your company. As such, you shouldn’t be too polite to ask for full details about exactly what goes into their tariffs. If they charge an hourly rate, have them explain what goes into each hour and itemize what they feel contributes to the value of their activities. There will be times that value will be intangible, and this is fine, but they should still be able to discuss with you what they provide which impacts your success. Many consultants today are operating on a value-based pricing strategy — this is where the fee is based on the outcomes the consultant can provide rather than the work they perform. This can seem like a good approach, but be sure to engage with them to understand how accurate their fee assessments are.

Establish a Relationship
One of the most vital areas of hiring a consultant for your business is how you approach working with them. Being vague in this regard can detrimentally affect the direction of the project.

Do
Establish a common ground. Relationships with consultants suffer when you’re not both on the same page — this goes for the details of the role, how they interact with you and the business, and daily activities. Perhaps above all else, you have to make sure that you are both on clear communicative grounds. Do you both have the same understanding of the terminology that you’ll be using? Are there protocols in place to make certain that everybody knows what is going on and how to discuss it where needed? Be up-front and formal about this; your consultant will appreciate this effort, and you can have confidence in their professionalism.

Don’t
Treating your consultant as an outsider is a route to failure. They are not a visiting business coach or a service. While they might well be a temporary fixture, they are an integral part of your business for the time that they’ll be with you. Ensure that you and the team treat them as such. Involve them in events, keep them in the loop about developments within the company, extend benefits to them if practical and legal. This not only demonstrates that you are a responsible business owner, it also forges stronger bonds with your consultant and helps ensure they operate with a high level of commitment to the business.

Conclusion
There comes a time when every startup needs help, and hiring a consultant can be a good solution. You can make the experience more successful if you gain clarity on your needs and how your collaborator will add value to your projects. Be sure not to neglect building a strong relationship, and you can reap benefits now and in the long-term.

Meet The Author:


lukesmith

Luke Smith

Luke Smith is a writer and researcher turned blogger.
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Courtesy of NASE.org
https://www.nase.org/about-us/self-made-nase-blog/self-made/2021/04/08/hiring-a-consultant-to-help-with-your-startup-the-dos-and-don'ts