A Complete Look at Why you need a Business Consultant: Everything you need to know!
Why do small business owners hire consultants?
If you’re not sure what a business consultant does, then this guide will teach you.
Can business coaching help your company?
If you’ve considered hiring a business consultant, but you’re not sure if you should, this is also the book for you.
Why do you need a business consultant?
Find out and learn how a business mentor can add value to your company.
Do you want to hire a business coach, but you don’t know what to look for?
Don’t worry – just keep reading.
What we will discuss!
- What is a Freelance Business Consultant?
- 7 Ways A Business Mentor Can Add Value To Your Business
- Small Business Consulting Success Stories
- How To Hire a Qualified Business Coach
- Resources And Further Reading
What is a Freelance Business Consultant?
What does a business consultant do?
In short, a business consultant/coach/mentor provides a “fresh set of eyes” for your company.
Because they’re neither an owner or a regular employee of the company, a business consultant has an original perspective that can benefit the enterprise. They monitor a company before getting involved. They examine the production process. They talk with employees and pay attention to workflows.
A business consultant gets a full understanding of your company.
Using years of experience and industry knowledge, they find ways to refine your company and offers an objective and unbiased point of view.
Oftentimes, small business owners are personally vested in their business. While this passion is excellent for many reasons, an emotional connection in your company may keep you from making the best decisions.
A small business consultant isn’t emotionally invested in the companies they work for. All they’re interested in is helping the small business owner find ways to improve their company and make money. A business coach can give a company the constructive criticism it needs.
When a business owner isn’t sure how to make their company better, they get professional advice from a business consultant. Business consultants are great at identifying problems that business owners don’t see. They’re not afraid to make suggested changes.
The short answer to What’s the role of a business consultant?
A business consultant is an adviser to a business owner to help increase a company’s efficiency and profitability and take their client’s company to the next level.
7 Ways A Business Mentor Can Add Value To Your Business
In order to understand why you need a business consultant, you need to see the ways they can add value to your business.
Check out these seven examples:
- A Business Consultant Can Help You Make More Money
One of the first things a business coach does is look for ways to increase efficiency and boost profits.
By looking at the finances first, business consultants find solutions that the company’s owner may have missed.
For example, if you’re bleeding capital because of expenses, a business coach can look at your spending budget and find ways to cut costs.
Maybe there is a way to consolidate cost of materials by increasing the size of your orders.
If you’re sitting on too much inventory, a savvy business coach can help you find ways to move your product, and turn wasted space into cash.
- Invest Your Time Wisely with the Help of a Business Mentor
When a business coach takes a look at your company, they find ways to enhance your workflow. The more efficiently you spend your time, the better your business can do.
Did you know that many small business owners do their own taxes? Rather than hire the help of a financial consultant, they spend the time doing the work themselves.
While this can save a couple of bucks in accounting fees, the owner’s time is wrapped up in an area that isn’t even their speciality.
A business consultant prevents their clients from misusing their time. Business coaching is about leading small business owners to the best decisions. You only have so much time in a day, and a business coach helps you use it wisely.
- Business Consulting Produces Solutions You Didn’t Know Existed
When encountered with a new and unfamiliar challenge, most small business owners think they need a new and special solution.
However, that’s not always the case. The solution to your problem may already exist, and you just don’t know it yet.
If you’re facing a crossroads with your company and you’re not sure what the best solution is, get a business consultant. You are paying for their prowess. They have probably encountered a problem just like yours before.
Even if they haven’t, business consultants have knowledge from similar experiences, and they will apply it to your unique problem.
Why waste time re-inventing the wheel if you don’t have to? Small business consultants are paid to produce solutions that small business owners don’t already have.
- Business Consultants Help Companies Scale Faster
What would you do if your sales went up by 200% overnight?
If you had to ship a year’s worth of product in one quarter, could you do it? As a small business owner, you’d try to make it work and figure it out – but, that doesn’t mean you’d be successful.
One of the best problems a business can have is the need to scale quickly. Still, it’s a challenge – even if you have grown a business before.
If you have an immediate customer demand and you need to grow your business fast, you want the aid of a business coach.
A business consultant can guide you through the changes you have to make to meet higher demand. They can show you how to expand operations without hurting your quality of service. In a service industry, a business coach can help you with on-boarding qualified staff and develop a training curriculum.
When it comes time to scale a small business, hiring a business coach is like adding gasoline to the fires of success. Yes, the fire could grow bigger on its own – but the gas makes it ignite immediately!
- Prepare An Exit Strategy with Your Business Mentor
Do you want to work for your small business forever? Or do you want to make your business work for you? Part of small business consulting is discussing and preparing for possible exit strategies.
Here are three potential exit paths a business consultant can help you take your business:
Franchise: If you have a proven business concept that can sale, franchising may be the right exit strategy for you. As a franchisor, you can receive a recurring royalty payment from your franchisees.
You’ll get this residual cash in exchange for your intellectual property and ongoing support. When you franchise, you grow your business, and become more than just an owner/proprietor – you’re a consultant in your own right!
Acquisition: Not every business is designed to last forever. In some markets, the best thing a small business owner can do is develop their company, prove the concept, and then sell to a major competitor.
Acquisition can pay off big for the initial business owner. For example, look at what business consultant and entrepreneur Kevin O’Leary did for GrooveBook. He helped a small business specializing in printed photobooks sell their company to Shutterfly for $14.5 million. Read more about this, and other business consulting success stories, in the next section.
Initial Public Offering (IPO): Some companies grow so large that the best exit strategy is to sell stock and take on shareholders. This is a whole new stratosphere of business – and if you haven’t been there before, you’ll definitely need the help of a trusted business coach.
Which exit strategy is right for your business? Answer this question easier and develop your exit strategy with a small business consultant.
- A Business Consultant Brings Outside Creative to the Marketing Department
There’s no limit to how you can utilize a business coach’s out-of-house perspective.
Their way of thinking is unattached to the way you run your company. That’s why they can bring fresh creative into your business.
If you’re stuck on a marketing or advertising plan, an outside business mentor can examine your brand and then tell you what they see. They can help you craft a strategic message that stays within your company’s identity, but communicates with a new voice.
- Business Coaches Know The Best Workflows
A qualified business consultant knows the best practices for their industry. There’s no guesswork in the protocol they suggest. They’ve done the legwork, so they know what works and what doesn’t.
Instead of the trial and error involved in developing your process, take advantage of a business consultant’s years of experience.
Let them know the product you need to make or the service you need to deliver. If they’ve done it before, then they know the best way to make it happen.
Small Business Consulting Success Stories
Read these three small businesses success stories. Each of these companies benefitted immensely from consulting a business coach. See how a skilled business consultant can take a small business to the next level.
Kevin O’Leary and Groove Book
GrooveBook is an app that turns your phone pics into printed photo albums. Each month, users select what photos they want to be printed, and the finished photo book is delivered to their door.
The company was originally founded by Julie and Brian Whiteman. They had the idea for the app. The couple owned a photo printing shop, so making the product was easy. The challenge was turning a profit.
Although they were able to garner 180,000 paid monthly subscribers in just eight months, the Whitemans made less than $.70 per unit landed. Because their only market edge was low overhead, it would be virtually impossible for them to make real money in the photo printing and software space.
Knowing their business had potential to be big, but also recognizing a problem they couldn’t solve, the Whiteman’s sought out a business consultant for GrooveBook. That’s when they met Kevin O’Leary.
Kevin O’Leary started his business career when he founded a small software company in his basement. Over the course of ten years, he built that business into The Learning Company, and then sold it to Mattel for over $3 billion.
When O’Leary partnered with Julie and Brian on their first small business, GrooveBook, he helped them do the same thing. O’Leary saw that GrooveBook wasn’t meant to be its own photo printing and software company. It’s meant to be a service offered by one of the big players.
Rather than compete in a race they couldn’t win, O’Leary advised the Whitemans through the acquisition and sale of GrooveBook. They eventually sold the company to Shutterfly, the market leader in digital photo book printing.
Instead of being crushed by their competition, GrooveBook was acquired, and the owners made $14.5 million dollars for their small business. Without the help of O’Leary’s business consulting and years of acquisition experience, GrooveBook may have never been sold.
Marcus Lemonis is an internationally acclaimed entrepreneur, investor and business consultant. Some of his most financially rewarding companies started as small businesses.
Here’s a quick look at just some of the companies that Lemonis has coached to success:
Precise Graphix – Before receiving business coaching from Lemonis, Precise Graphix was haemorrhaging money. Even though they were doing millions in sales, their unorganized production process was costing them serious cash.
That’s when business consultant Marcus Lemonis took the lead. He invested in the company and improved their workflow. The business coaching paid off. Today, Precise Graphix is profitable. They execute graphic and fabrication work for national brands like Walmart, Safeway and Camping World.
Sweet Pete’s Candy Company – Small business owner Pete Behringer (a.k.a. “Sweet Pete”) received business consultation from Lemonis, and then partnered with him.
The business coaching Lemonis brought to the table took Sweet Pete’s candy to new heights. Marcus used his business consulting savvy and transformed a boutique operation into 23,000 sq. ft. candy manufacturing warehouse and an online candy store.
Marcus Lemonis Fashion Group – After successfully investing and business coaching 19 different fashion brands and retail outlets, Lemonis united them all under one umbrella company.
This is one of Lemonis’s latest business ventures and it’s already turning a profit.
Barbara Corcoran and Tom + CheeTom+Chee
With three locations throughout the greater Cincinnati (OH) area, these two restaurateurs did one-million dollars in sales.
Corey and Trew were proud, but they knew their small business was capable of more.
That’s when Corey and Trew found a business coach and investor Barbara Corcoran. She loved their product and their mission.
With over 40 years of diversified experience in real estate, entrepreneurship, and food and beverage, Corcoran was the perfect small business consultant for Tom + Chee.
Corcoran helped Corey and Trew secure real estate for new Tom + Chee locations.
Two years after partnering with Barbra, Tom and Chee grossed over $14 million in sales. They made such a tremendous economic impact on their home city, the mayor of Cincinnati gave them their own holiday!
Tom + Chee continues to expand their business today. With the help of Corcoran’s business coaching, Corey and Trew now have over 20 locations in 14 states, with franchise opportunities available worldwide.
How To Hire a Qualified Business Coach?
Ready to coach business with the help of a qualified business mentor?
Use this list of what you need to look for and what you need to avoid when hiring a small business consultant.
Look for a business coach with expertise in your field.
You want to leverage that expertise as much as possible. Call on their background and years of experience in your line of work.
Many consultants are no longer active business owners in their industry.
Because they are not your competition, they should be willing to lend all of their knowledge to you.
If you can’t find a qualified consultant in your exact field, look for a candidate with translatable skills from other industries. For example, someone with expertise in sales or marketing can lend that knowledge to just about any company.
Stay away from anyone that lacks a professional image.
A business consultant needs to present themselves as an elite business professional. They should have a polished, attractive and updated website.
A successful business consultant doesn’t need to be active on social media, but they should definitely have a presence.
If someone tries to pass themselves off as a business consultant, but they don’t have the professional image to back it up, then you don’t want to hire them.
Look for a business consultant with a proven track record.
You want to hire someone that’s done this before. Ideally, that means they have a successful history of prior business consulting. Of course, the more experienced the business consultant and the higher quality their services, the more expensive they will be.
You get what you pay for. If you choose to hire a professional that hasn’t worked as a consultant before, you’re taking a big risk.
However, if they’ve already proven their financial success with their own company, then a business owner might make a qualified business coach.
Stay away from equity offers.
Unless your business coach wants to invest money in your company, you don’t want to offer them equity in exchange for business consulting.
This can quickly complicate your relationship and eat into your company’s bottom line.
As far as consulting is concerned, it’s best to pay your business mentor for their time and know-how. Don’t try to strike up a “deal” by offering equity to a business coach
Look for network referrals from other companies and business owners.
When vetting a potential business consultant, talk to business owners that have worked with them before. Did they have a good experience? Did the business consulting help their company?
If so, how? Do your homework and go beyond what a business consultant presents on their website. Check out your potential business consultant’s LinkedIn page. How many recommendations do they have from their peers?
Do they have any client testimonials available online? Know what kind of results their skills are known to deliver.
Don’t be afraid to ask a lot of questions. You hire a consultant so they can teach you how to be a better owner and operator. It’s their job to guide you in the right direction.
Get a small business consultant on board with your company and make the most of their expertise.
Resources And Further Reading
For further reading on any of the topics covered in this guide, or to learn more about business consulting, visit the sites below.
Quantify – Reasons Your Small Business Needs Consulting – Business strategy for those in search of a business mentor.
Forbes – This Startup Made A Deal And Just Sold To Shutterfly For $14.5 Million – A success story on how a business consultant guided two small business owners through a lucrative exit strategy.
O’Leary Financial Group – Website for multimillionaire business consultant and entrepreneur Kevin O’Leary.
Marcus Lemonis – Inspirational entrepreneur, investor and business coach that offers business consultation as part of his reality television show.
Barbara Corcoran – Successful business coach and entrepreneur with a diverse client portfolio.