Second Opinion

Can a consultant boost your business? Yes, if you follow these tips.

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.

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