Man

Using Experts to Tackle Challenging Issues: Finding the Right Consultant Can Make or Break an Entrepreneur

Every entrepreneur has situations when business challenges are beyond her areas of expertise or that of employees. One option is to dive into an issue and work through it which can be a learning experience but can also take considerable time and energy. An alternative is to hire a consultant to provide guidance and expertise which can create quicker solutions but also be expensive.

Six Steps to Finding the Right Consultant

Business owners must make their own decisions whether using consultants is a reasonable approach for them. Here are six steps an entrepreneur can take to hire a suitable consultant when that seems to be the best option.

Define the Issue or Problem

The first step that must be taken is to analyze and define the challenge being faced. Having a poor or incomplete understanding of what needs to be changed is a common mistake and can lead to wasted money and time. It is essential to take this step seriously because the way a challenge is defined fuels the remainder of the decision-making process including the type of consultant obtained.

Perform a Cost-Benefit Analysis

The next step is to compare the cost and benefits of obtaining a consultant to that of going it alone. Costs would include the resources needed to hire the consultant and related expenses including addressing any recommendations made or the cost of devoting time and energy to do it without help.

Benefits would involve the positive impact that the challenge’s resolution has on the business or possible money saved by not hiring the consultant and just working it out internally. The cost-benefit analysis does not have to be a formal, statistical process. Just sitting down and listing the costs and benefits of each decision option can suffice if resources are not available to perform a more formal process.

Determine a Time Frame for Completion

If a decision is made to hire a consultant, it is very useful to develop a reasonable time frame for process completion. The nature of a particular business challenge may be immediate or more long-term. An entrepreneur needs to decide how quickly a resolution needs to be obtained and then plan the process around that decision.

Establish a Reasonable Budget

Deciding on a budget for the process is very important to keep control of expenses. It is helpful to let the consultant know up-front how much money is available for her work and then create an action plan that stays within the budget. Open-ended agreements with consultants are never a good idea.

Take the Selection Process Very Seriously

Finding a consultant is similar to hiring a good employee. It is essential to spend the time to ensure that the person is qualified and is a good fit for the organization. Ask colleagues and local professional associations for referrals and then meet with candidates to discuss the business challenge and how each would address it. In-person meetings are essential to gain the best impression about the qualities of a consultant and if she is the right person for the job.

Choosing a Consultant

After speaking with candidates and creating a short-list of potential choices, ask each one to submit a proposal including a list of references. The proposal should summarize the discussion points from previous conversations and identify the problem or issue, scope of work, budget and payment arrangements, and timeframe for completion.

Review each proposal carefully to determine consistency with previous conversations and expectations and identification of the most reasonable approach that fits within the defined budget. Also, establish a payment plan that allows for regular progress reviews for achievement of specific milestones. Lump sum payments up-front are never a good idea.

Careful Consideration of a Consultant Will Lead to Success

It isn’t hard to find entrepreneurs who can relate horror stories about consultation arrangements having gone bad. While receiving poor outcomes from hiring a consultant is always a possibility, good planning by following these six steps will increase greatly the chances of success.