Why You're Getting Bad Advice and Paying Too Much For It Too often, entrepreneurs hire the wrong advisors and don't realize until it's too late. Here are four ways to stop yourself from making this mistake.
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A friend of mine who runs a social media marketing firm paid a brand consultant $5,000 -- a substantial investment for a small firm -- for some advice about his company messaging.
The outcome? "She told me to breathe deeply and look into my heart. I could have gotten that advice for free at an ashram," he told me.
This is unfortunately a familiar situation. At some point, all entrepreneurs need outside help to build and sustain their businesses. Unfortunately, they can often be disappointed with the result. The problem is, most entrepreneurs can't afford to hire big consulting or business firms to carry out these important jobs, yet the "experts" who are financially accessible can be inexperienced or have a narrow perspective based only on small-business scenarios.
Whether you're looking for a bookkeeper who can keep day-to-day finances in order, a consultant who can help breathe new life into branding, or a researcher who delivers needed intelligence, I have four ways you can get marquee advice on a modest budget:
1. Ask the right questions to identify a true professional.
Make a complete list of what you want a service to provide, including everything from follow-up phone calls, monthly reports and billing procedures. For instance, a colleague's search for a bookkeeper, which involved a series of similar detailed questions, revealed that some services don't know the most basic business protocols. One bookkeeper told him she didn't back-up her work on a regular basis, which is bookkeeping 101 and a potential disaster waiting to happen.
2. Look for someone with big corporate and small-business experience.
There's absolutely nothing wrong with small firms -- after all, we all run some of the best ones. However, some so-called experts have limited experience to draw from, so their perspective is narrow. Look for people who have had a good amount of big company experience, at least five to ten years. You increase your chances of getting intelligence that's based on a broad range of situations and solutions. There's no reason why corporate strategies can't be scaled down, but you'll never know unless you hire someone with the kind of experience that allows them to apply big-box answers to your boutique needs. For instance, a good retail consultant can show a clothing boutique how to use a big retailer trick -- the "loss leader" -- effectively and profitably to lure customers and make more substantial sales.
3. Check the quality of results.
You wouldn't hire an employee without checking references and looking at their past work. Why feel differently about a consultant? Designers, for instance, should be able to show you a variety of work that demonstrates their effectiveness at a design mission. Look at the design work: does it have an identifiable aesthetic? That means the designs created are more about the firm's capabilities than they will be about your brand's need, so you better like the style. How do they present the work? Do they just show a logo and some examples? Or do they show you how it looks on the shelf with the competition, and how what they created stands out among the pack?
A brand strategist should be able to present specific measures of consumer engagement and even sales responses to their rebranding efforts. If a consultant is hesitant to name names, or does not have extensive work to show, this could be a red flag. This is not to say you shouldn't give a hungry beginner a chance (Weren't we all there once?). But the price should always be commensurate with experience.
4. Know what you're buying.
Expect specifics when seeking outside help and that includes everything from what's included in a job and how much you'll pay for it. For instance, a friend hired a PR agency and discovered only later that press releases were not included in the monthly retainer. She had to pay the agency every time it issued a press release, which it did as often as possible and without checking with the client first. She had assumed that PR agencies write PR releases as part of the package but that assumption cost her a great deal of money.
When asking for a proposal, make sure the consultant includes not only the strategy but also what is included in implementing it for the quoted price and exactly what will be an extra cost. Make sure that every time your consultant spends money on your behalf, you have approved it. Most consultants will offer a written proposal, even if it's a one-pager, but if they don't -- ask for one.
Be sure to also map out "deliverables" with due dates and reports if applicable. It doesn't have to be a formal contract, nor do you have to enlist the extra cost of a lawyer for most agreements. Even a simple email detailing what a job entails can be enough to keep everyone on the same page.
Don't be humbled by your budget or by the fact that you are a "small" business. There is plenty of top talent out there -- people as demanding as you.