From the June 1998 issue of Startups

Need an expert's advice to identify your target market? Trim your operating budget? Or figure out how your small business stacks up against the competition?

Hire a consultant. The right outside specialist can give you an unbiased view of your business, identify problem areas and recommend strategies to keep your business on track. You can hire a consultant for almost any business need, from accounting, management and marketing to better business writing and even phone etiquette.

Consultants can be cost-effective. You call a consultant only when you need one and get expert advice without adding to your payroll. Here's a seven-point strategy to ensure you get the most from a consultant.

1. Understand a consultant's role. A consultant is an advisor, not a miracle worker. If your marketing campaign hasn't increased sales for the past six months, don't expect a consultant to turn business around overnight. If someone promises to do so, be skeptical. You want a consultant who is knowledgeable in your industry or field and can offer a workable solution, not a quick fix.

"Look for someone who's been making a living as a full-time consultant for at least five years," suggests Kent Burnes, a business consultant and owner of Burnes Consulting in Grass Valley, California. "The only thing a consultant can sell is knowledge. If he or she is working full time and has kept up on changes and new information in the field or industry, he or she will be of value to you."

2. Identify your needs. Determine what you want to accomplish, quantify it and write it down. The more specific you are, the better. You could simply tell your consultant you're not pleased with the results of your marketing campaign. But asking how you can increase sales by 10 percent or more this year will give a clearer picture of what you want to accomplish.

3. Know what you'll commit. Be prepared to tell a consultant what resources you can provide to help him or her do the job. Consider background materials on your business, plus any office equipment, space, supplies or employees you can make available.

You'll save your consultant time--and yourself money--if you do some research first. "If someone wants information on [their] firm's customer base," says Burnes, "it helps if [they] come to me with customer surveys, demographic studies or other data. With the right information, I can analyze the situation quickly. It's likely I could make a recommendation in a half-day rather than a week. This, of course, is more economical for the client."

4. Establish fees upfront. Some consultants charge flat rates or bill by the hour, the day or the project. Others charge a contingency fee, in which the amount paid is based on the results. For instance, if a consultant reduces your operating expenses by $10,000, he might receive 10 percent of the savings as his total fee or as a bonus in addition to his flat rate.

The average full-time consultant, says Burnes, charges $95 to $150 per hour. Some charge much less. "You get what you pay for," he says.

5. Develop a list of questions. Interview a prospective consultant before you hire him or her. Questions to ask include: "What is your experience in my industry or field? Can you describe problems similar to mine that you've handled? Can you offer me full confidentiality and represent me without conflict of interest with your other clients?"

Find out how often the consultant will communicate with you and if you'll receive periodic progress reports. Ask for a written proposal spelling out how he or she plans to approach your problem, the time needed and the fee you'll be charged.

As you evaluate a consultant's experience and skills, consider your working relationship. Do you like and trust the person? Do you have a good rapport with him or her?

6. Check references. Ask a prospective consultant for three recent references--and call them. You want to know if the consultant accomplished what was promised, if he or she communicated regularly and if the company would hire the consultant again. "Don't rely on letters of recommendation. They don't tell the whole story," says Burnes. "Ask for the names of past clients who run businesses similar to yours."

7. Put it in writing. Prepare a written agreement that clearly spells out the terms of your arrangement. Define the services to be performed, the starting and ending dates, the fee and how it will be paid, expenses you agree to pay, and services you will provide. Have your attorney review and approve the agreement.


Carla Goodman is a freelance writer in Sacramento, California.

Resources

For more information on hiring a consultant, check out these resources:

  • The Institute of Management Consultants maintains a free referral service for certified management consultants who've completed the Institute's professional accreditation program, completed an ethics exam, signed a code-of-ethics agreement and undergone a screening process. Contact the Institute at 521 Fifth Ave., New York, NY 10175, (212) 697-8262 or http://www.imcusa.org
  • The Association of Management Consulting Firms provides a free referral service, categorized by industry and specialty, to help businesses of all sizes select consulting firms. Call (212) 455-8231 or visit http://www.amcf.org
  • You can also find consultants through trade associations in a particular industry. The American Society of Association Executives (ASAE) can refer you to these trade groups. Write to the ASAE at 15175 I St. N.W., Washington, DC 20005 or call (202) 626-2793.
  • Another great resource is the Service Corps of Retired Executives (SCORE). This organization of some 12,400 retired business owners and executives provides free consulting for small businesses. Call (800) 634-0245 or visit http://www.score.org

Can You Manage?

Sooner or later, you're going to need help running your business. Good news: You can find that help without going to the expense of hiring permanent, full-time workers.

For starters, consider hiring an intern--a high school or college student who will work for little or no pay in exchange for valuable work experience. You'll need to identify specific projects for the intern and guarantee you can spend the time necessary to train the individual and evaluate his or her work, because most students take internships for school credit.

After you draw up a detailed description of your internship, promote it at the career placement center at your local high school or college. The National Society for Experiential Education in Raleigh, North Carolina, provides information on starting internship programs; call (919) 787-3263, ext. 21.

Local high schools and community colleges are also good sources of inexpensive part-time workers, but you'll need to accommodate students' class schedules and be willing to spend time on training. That includes tasks as seemingly simple as answering the phone and taking messages.

Senior citizens can bring a wealth of experience to the job and often prefer to work part time. Check with senior centers in your community and your local branch of the federal Office for the Aging (listed in the government pages of your phone book).

If you need individuals with special skills--but you don't need full-time help--independent contractors might be just the solution you're looking for. A one-person advertising agency, for example, might not need a full-time graphic artist or photographer. Instead, the agency owner could use independent contractors for photography, design and artwork needs.

If your business relies on skilled work, consider starting your own work apprentice program. It will mix practical classroom instruction with a year or more of on-the-job training. You'll be working with entry-level talent you can train and eventually hire full time as your business grows. Jobs for the Future can help set up and evaluate your apprenticeship program; call (617) 742-5995.

Contact Source

Burnes Consulting, (530) 346-8188, ktalk95@aol.com