Five Factors To Consider Before Hiring A Financial Consultant For Your Startup
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
As an entrepreneur, your first priority is always to have the company set up the right way, and ultimately grow your brand. This, however, never comes easy, and you’ll find yourself needing the professional services of various individuals to help you get ahead. One such service that you’ll be in need of will be that of a financial consultant- but choosing the right one is tougher that it may seem. In this article, I have listed five factors to consider before hiring a financial consultant for your business:
1. “Do you understand what my business is?”
Make sure that whoever works for you can make you question aspects of your business that you wouldn’t otherwise think of. It is not really about understanding your exact line of work; it is more about challenging your actions, instead of just taking orders and doing what you ask. If you are going to pay a professional services person, he or she becomes a partner, and thus they should tell you the things you don’t see. This partner should be your reality check at least once every two weeks, especially in the very beginning of your business lifecycle. Services-based companies are different from product-based companies. Make sure your financial consultant understands the difference and help you create leads and opportunities accordingly. The best way to notice whether or not your financial consultant understands your business is to listen to his/her advices during your first meeting.
2. “Have you worked with early-stage startups or SMEs?”
It’s very important to understand this particular notion. Why? Because startups are, by definition, often very unstable, and as such, require more attention than settled businesses. In other words, your financial consultant should take the time to guide you in your decisions based on market conditions and investors. Your financial consultant should have a good amount of experience to advise you on things you have never heard of that can help you and support your growth. Having experience in this domain is what will make you trust his/her judgment. This applies to cost management and revenue performance. Leverage this question to ask for references. Someone with experience will always have people talking about them, and if they were successful working together and the outcome of that collaboration. Look out also for his/her social media presence.
3. “Who will actually be working on my financials?”
If you hire the services of a big firm, you might probably end up with someone without experience; a junior, as they call it. It must be clear, when you meet the company you are going to hire, to understand who will be your main point of contact, and set up a clear schedule with that person. In other words, find out who you are truly going to work with.
4. “What is their fee structure?”
Before hiring any sort of services, it is very important to be clear on the payment value and payment terms. Most professional services are paid by the hour, but some of them might give you a fixed fee to start with, followed by hourly fees. Make sure you have the right understanding on the fees to be able to manage your budget the right way. These people spend hours reviewing P&Ls and analyzing them, and so if you want a job well done, you will need to invest.
5. Make sure you like him/her!
Last but not least: the human relationship is probably the most important thing in any type of business. It’s all about the connection you have with that person. The person that will support and understand the most, no matter the situation, is the one you want to select. The best way to have that feeling is simply to go and meet them. The old-school way is the best. Phone conversations, followed by Skype calls can be a good start, but a good lunch or a nice coffee should be the only meeting that seals the deal. Always make sure you are comfortable with what they say, and make it a point to figure out how they make you feel when you ask questions about things you don’t know. The tone and attitude are very important- probably as important as knowledge about these matters.