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Salt Lake City Bookkeeping Blog

4 Questions to Ask Before Hiring a Small Business Consultant

Posted by Leanne Armstrong on Aug 7, 2019 9:00:00 AM

4 Questions to Ask Before Hiring a Small Business ConsultantNo matter how well you run your organization, hiring a small business consultant can give your company a powerful edge. The right consultant will not only provide better clarity into how effective your operations are, they’ll help you promote solid business growth through solid business planning.

How A Consultant Can Help Grow Your Business

Many small business owners look to professional consultants for help in specific operational areas. These often include:

  • Seeking strategic advice,
  • Evaluating considerations around expanding services or hiring more staff,
  • Making the decision to lease or buy a new space,
  • Getting help cutting costs or renegotiating with suppliers,
  • Securing a loan or other outside capital

Finding the most promising advisor – and taking advantage of their specialized knowledge - can be a cost-effective way to develop your business. So to help you choose the best fit, here are 4 key questions to ask before hiring a small business consultant.

1. What can you help my small business accomplish?

A good small business consultant will not only serve as an objective sounding board for your strategic plans, they’ll assist in designing and supporting those strategies. Specifically, they should be able to help your business:

  • Create a new marketing plan,
  • Run the numbers before opening a new branch, and
  • Evaluate a potential investment or business acquisition

Project management in terms of getting and keeping your plans and financials investor-ready plays a big role in growing your business. A consultant who’s a good fit for your company will help you bring your bookkeeping records and other back-office documentation up to date.

Of course, the other side of maintaining accurate records is putting them to work for your company. A solid business or financial consultant will prove an invaluable resource when it comes to creating the reports your business needs, and helping you use them as predictive tools.

As a minimum, you should look for an advisor who knows how to generate financial budgets and forecasts – and how to review your financial history with an eye to making better tactical decisions.

2. Do you have experience inside my industry?

Specific industry knowledge is important when it comes to choosing the right business consultant. But in truth, a superior advisor will have enough experience with a range of business types that they’ll be an ongoing source of fresh ideas.

The emphasis should be on finding a consultant with a proven background in helping companies structured similarly to yours. Understanding how to effectively market a B2C (business-to-consumer) company, for example, is very different from running a successful B2B (business-to-business) or SaaS (service-as-a-software) enterprise.

You should also give preference to consultants with the ability to help you reach your objectives through an understanding of the latest technology. 

3. How does your business process work?

Being given a rundown of what they plan to do for your business is only half the story when it comes to vetting a potential consultant. You need to take things one step further and ask that advisor to explain – or better yet, demonstrate – their strategy for success.

Every successful business model follows a well-defined set of processes to produce repeatable results. A quality consulting business should be no exception. Don’t be afraid to inquire about the specific steps a consultant plans to take to help you meet your goals - and for evidence of their success with other satisfied clients.

As an example, some business advisors will follow a system that:

  • Starts with a thorough review of your company’s revenues, expenses, assets, and liabilities,
  • Moves on to develop cash flow and other financial forecasts to identify key trends, and
  • Includes helping you distinguish risks and opportunities well in advance

Ideally, working with the right consultant will make it easier for you to consider and execute your options in a timely and well-informed manner.  

4. Why should I choose you over other business consultants?

There are four great reasons to hire a small business consultant. Hopefully the one you’re considering partnering can show they fulfil these criteria:

  1. They provide a seasoned, objective view of your systems and strategies.
  2. They have the expertise to help you plan your company’s future.
  3. They have the financial knowledge to help you leverage new opportunities.
  4. Using their services will ultimately save you time and money.

Finally, you may want to look for signs that the consultant you’re thinking about hiring is a) striving to stay on top of business trends and technological innovations, and b) constantly learning in order to provide more valuable feedback to their clients.

In the end, choosing one small business consulting service over another will come down in part to how much common ground you share. But from a practical perspective, you can increase your odds of finding the best business advisor by asking the right questions and listening carefully to the answers.

Topics: Small Business Consulting, CFO Consulting, Growth Coach