Prince Peter 15th October 2024 updated.
Choosing a business consultant could be one of the most important hiring decisions an entrepreneur can make for his business.
Small business or startup entrepreneurs especially have to be very careful in selecting their business consultant because smaller ventures tend to change faster - meaning that the right, or wrong, choice could quickly have game-changing consequences.
This is the definitive guide for researching, evaluating, and selecting the best business consultant who perfectly matches your specific business needs.
This Blazetrue article too is aimed at my core audience of independent startup and small business entrepreneurs.
A Business Consultant is an expert who offers you advice and guidance on improving your business by suggesting changes in approach (strategy), process (methodology) or attitude (philosophy).
Broadly there are two types of business consultants:
Generalist: Simply termed Business Consultants (seldom Generalist Business Consultant!), they usually focus on the entirety of your business and offer 360-degree advice on all aspects of your business, with their greatest focus typically on strategy and strategic management.
Specialist: These are usually consultants who offer their subject matter expertise in niche areas such as Taxation, Logistics, Finance, Marketing, Security, Operations, IT, Human Resource, Design etc., and their roles will seldom move beyond the specific niche area.
When talking about business consultants, you might also stumble upon the terms Coach, Mentor, and Advisor - especially in the context of small businesses, startups and entrepreneurs. So, shall we take a look at them as well?
Coach: While a business consultant focuses on improving business performance, a coach concentrates on enhancing the entrepreneur's personal performance through behavioral changes.
Mentor: Business/entrepreneurship mentors, almost invariably entrepreneurs themselves, usually offer the lessons of their experience to younger entrepreneurs. Mentors, often volunteers, usually concentrate on their relationship with the entrepreneur and are less involved in the business as such.
Advisor: Usually an informal role with wide-ranging scope, an advisor could be a Venture Capitalist appointed strategy advisor who has decision-making influence or a niche advisor who has short term responsibilities.
Depending on the context - and the confusion! - any or all of these terms may be used interchangeably. Therefore, you should concentrate more on what specific services the consultant offers and less on the terminology. Definitions and terms in business are confusing anyway; let's not add to it!
For example, Blazetrue is mainly a business consultant (focus on business strategy, goals and processes) but with a definite touch of coaching (with focus on the entrepreneur's goals and attitude) and a mentoring attitude!
First of all, do you need a business consultant at all?
Yes. And no.
An entrepreneur does not necessarily need a consultant; but what every entrepreneur does need, are people who can offer a balanced outside perspective, give unadulterated honest advice, brainstorm ideas intelligently and unhesitantly call you out when you are wrong.
This person could be a friend, partner, mentor, or consultant, but without this outside expert support, it is near impossible for an entrepreneur to succeed. It is well known within the community of successful entrepreneurs that even seemingly go-it-alone entrepreneurs have received immense outside support.
During Facebook's early days, Mark Zuckerberg had Sean Parker, the dot-com pioneer, to guide him and, who according to Zuckerberg, was pivotal in helping Facebook transform from a college project into a real company.
Parker also helped arrange Facebook's initial funding round, and negotiated a majority board position for Zuckerberg that has allowed the Facebook founder to retain a rare degree of control over his venture.
Richard Branson had Freddie Laker, a compatriot airline entrepreneur, to support him during the early days of Virgin Atlantic. Branson admits that he wouldn't have got anywhere in the airline industry without the mentorship of Sir Freddie Laker.
Steve Jobs had Mike Markkula during the early stages of Apple, to guide the company's transformation from a partnership that was peddling computers to a company that wanted to change an industry; and later had John Sculley to guide Apple's coronation as a global brand.
Being an entrepreneur can be very challenging and exceedingly lonely because of all the decisions that you have to make by yourself. The support of an honest, unbiased outside expert can make life and business much easier for any entrepreneur.
So, yes. And, no.
At the earliest.
One of the biggest mistakes entrepreneurs make is to wait too long before calling in outside help. By then, a crisis has turned into a disaster, and there is little anyone can do except firefight, reduce losses, and pray!
If you, the entrepreneur, are ready for change, the best time for choosing and engaging a consultant, at each stage of your entrepreneurship, is at the very beginning.
: The earliest step would be even before plunging into entrepreneurship - hire a consultant or counselor at that early stage as a sounding board and outside critic to judge if being an entrepreneur is the best choice for you.
: The next step would be to evaluate your readiness to start your venture - use a consultant or outside expert to validate your ideas and business plans.
: Then, immediately on getting your business up and running, get expert outside opinion on your processes, your approach, and your marketing/financial/customer/sales strategy. Once again, hire the consultant early on so that the mistakes are smaller, and the losses are comparatively lesser.
: Later, once your startup has matured into a successful business, conduct regular review sessions of all key aspects of your business - either by appointing consultants or through other qualified outside experts.
Start With You: The process of hiring (or not) a consultant begins with you, the entrepreneur, asking yourself if you are ready for change: and getting yourself ready for that change. That is the first, most critical step.
While your specific purpose in hiring a business consultant could be for growing your business or improving your processes or transforming your organizational culture, the fundamental theme is always the same - change.
But change is difficult. Very.
So, make yourself ready to hear about change, to think about change, and to actually implement change in a definitive way - before you start the process of selecting your business consultant.
The reason behind most business failures - and successes - is the entrepreneur. That is true in a consulting engagement as well. The impact and scope of the change that is achieved by even the best consultancy engagement depends solely on how, and if, the entrepreneur implements the consultant's suggestions.
Even before the selection process for the consultant begins, you - as the entrepreneur leader of the business - must make the far more serious decision about being motivated enough to make changes to your business and to your self. Ensure that you are really ready to openly listen to outside opinion and prepared to implement the necessary changes based on those recommendations, before your start the hiring process.
Irrespective of how much your small business or startup may or may not need a consultant, unless you are ready for change, don't waste your time and money engaging a consultant.
It starts with you.
Be the change that you wish to see in the world.
Mohandas Gandhi
: Define your purpose. The specifics of why you might need a consultant or outside expert would vary according to your needs.
Is it to validate your ideas? Or to reduce inefficiencies and costs?
Or to review your strategy and business model? Or to improve your manufacturing processes?
Or to re-examine your organizational culture? Or to review your financial model?
Define your purpose first.
: Shortlist. Make a shortlist of candidates by matching your purpose with the skill set and services offered by various small business, startup or entrepreneurship consulting services.
A simple search on Google for entrepreneur consulting
or entrepreneurship consultant
or small business consultant
should give you dozens of options; include your country or geography for more relevant results.
: Get in Touch. Communicate with the top 2-3 consultant who you felt were closest to your needs.
: Evaluate and select the business consultant, from the shortlisted candidates, who best fits your unique business needs (as detailed in the next section).
Check for the following qualifications while evaluating your shortlisted business consultants.
Honesty is the primary qualification: without honesty and strong ethics everything else is pointless.
The role of your business consultant is one of high responsibility, great access, and potentially huge value. Your business consultant has access to your business ideas, financial records, and your thoughts. The recommendations of your business consultant could make or break your entrepreneurial venture.
If you cannot fully believe in the intent, purpose, and honesty of the consultant, absolutely NEVER choose him - irrespective of his other qualifying skills, knowledge or experience.
While it is difficult to evaluate any human being's honesty at short notice, and I don't have any special skills that I can impart to you, I hope you make a serious effort to understand the importance the consultant attaches to ethics - through what he says and how amenable he is to even borderline unethical suggestions.
Why trust anyone to advise you on starting up, managing, and growing your business, if they have no experience in starting up, managing, and growing their own business?
I would go a step further and strongly recommend that you search for entrepreneur consultants who have all the qualities of a true entrepreneur and have failed a few times in their ventures; the value of learning from failure is often lost on us - till we fail.
Still, not being an entrepreneur need not fully disqualify the consultant - if they have a proven record of consulting engagements.
The ones you must fully disqualify and never choose are those without any real world experience in entrepreneurship and who have only theoretical knowledge (typically a business degree) to support them. Stay away from them. A consultant should help you by using the lessons they have learnt by making mistakes in their businesses; they should not be learning their lessons by making mistakes in your business!
I agree with the opinion of Richard Branson, the iconic entrepreneur, when he says, Imagine boarding an airliner and learning that the pilot at the controls has only ever flown a flight simulator.. After launching hundreds of ventures across four decades, I know first-hand that there isn't anything like hands-on experience when it comes to running a business.. So as a consultant.. I would expect you to have an abundance of entrepreneurial experience.
Your business needs have to match the offering of the consultant. For example, a large top-rated management consulting firm could be a disastrous choice for a small business entrepreneur because their engagement styles, specialization, fee structures, and expectations are wildly mismatched.
Most good consultants are clear about the clientele they prefer. Some consultants may work better with small businesses, some may prefer short engagements, yet others might prefer startups, while some others may specialize in finance or strategy. For example, Blazetrue only works directly with small independent entrepreneurs whose annual business revenue is below ₹ 100 crores.
Most good consultants openly indicate their ideal specialization, scope, and scale. For example, I have indicated six reasons why you should NOT partner with Blazetrue even before my services are detailed. Understand the consultants' preferences and limitations clearly and shortlist only those consultants whose services align with your business needs.
Communicate directly with the consultant and ensure that the one-on-one communication is with the person who will be actually partnering with you.
Unfortunately, it is common practice for the star consultant to have the initial talks with you before passing you on to junior consultants. Make sure that this does not happen to you; else, it will defeat the entire point of evaluating an individual consultant.
Next, talk to the consultant about topics most relevant to your business needs. Read articles and content written by the consultant. Watch presentations or videos or talks. Again, ensure that the content you read, hear or see is personally created by the consultant; if what they say is outsourced or is syndicated material, what is the point?
Once done, ask yourself these questions: Did you learn anything new in the articles/content? Did you see consistency and passion in them? Did you feel confident about what and how much the consultant knows? Did you like how the consultant thought and expressed his thoughts? If the answer is yes, you can qualify the consultant for the final list.
: Cost and Timing. Clarify exact fees and work timings, and evaluate it's fit with your business needs and schedule.
: Guaranteed Results. How can anybody offer you guaranteed results without knowing about the unique values and history of your business? Beware.
: No/Low Cost or Product Affiliation. If the consultant offers you services for free or at very low fees you need to ask yourself - How? and Why? Beware of consultants whose main revenue source is not the consulting fees but commissions from the sale of allied products from sponsoring companies. The engagement then becomes a long, underhanded sales pitch for products and services you don't need.
: All Good News. The real job of a good business consultant is often to tell you the present bad news so that it can be turned into future good news. If the consultant is too diplomatic and unwilling to contradict you even when you are obviously wrong, keep far away.
: Master of All. Every entity, every human being has limitations. Even consultants! Be very wary of consultants who claim to be specialists in everything.
: Vanity Statements. Constant name dropping about people, education, or contacts is a red flag; a consultant confident about his skills will not do that.
In life, and in business, choosing the right partner can have enormous, life-changing implications.
When we add the diversity and complexity of human beings it can also sometimes become excruciatingly difficult.
I sincerely hope this choice works out for you.
The best, the most real answers to all important questions will always be the ones you find for yourself in your journey as an entrepreneur; but I do hope that my writing serves as additional signposts in your search for those answers.
Thanks again for your time and attention.
Signing off with my best wishes for your business venture,
P.S. each word you have read above is written by me, Prince Peter, and I take personal responsibility for all I have said.
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