About Business Consultant: What Do They Do?

Business Consultant: What Do They Do?

A business consultant is a skilled professional who helps business owners achieve their objectives by leveraging a broad range of expertise. Their knowledge stems from both formal education and hands-on experience. Business consultants specialize in management consulting, improving an organization’s performance and efficiency. They analyze business operations, identify challenges, and develop tailored solutions to assist companies in achieving their goals.

Why hire a business consultant?

Running a small or midsize business is challenging because of the sheer number of tasks it takes to succeed. From accounting to human resources to technical support, it’s almost impossible for business owners to do it all themselves. But, thanks to the ease of hiring consultants, they don’t have to figure out everything independently. We’ll explore what a business consultant does and how one can help your business thrive.

Business owners should consider hiring business consultants when they need help or perspective on their chosen path or a catalyst for change in their companies.

• Providing expertise in a specific market
• Identifying problems
• Supplementing existing staff
• Initiating change
• Providing objectivity
• Teaching and training employees
• Doing the “dirty work,” such as laying off staff
• Reviving an organization
• Creating a new business
• Influencing other people, such as lobbyists

What does a business consultant do?

Generally, a business consultant’s process has three stages: discovery, evaluation, and implementation.

Discovery

The initial step for any business consultant is the discovery phase, aimed at thoroughly understanding your business. An effective consultant invests time in learning as much as possible by engaging with the owner and employees. During this phase, the consultant will typically undertake the following tasks.

• Tour your facilities.
• Meet with the board of directors and employees.
• Analyze your company’s finances.
• Read all company materials.

Evaluation

Once the business consultant has developed an in-depth understanding of your company, they enter the evaluation phase to identify where change is needed. This phase includes identifying your company’s strengths and weaknesses as well as current and foreseeable problems.

• Identifying Existing and New Challenges: A consultant begins by examining the problems already recognized by owners and management. With their objective perspective, they can also uncover new or unexpected issues that may have been overlooked.
• Developing Solutions: The consultant’s role is to craft effective strategies to address these challenges while identifying opportunities to enhance growth, profitability, and efficiency. For instance, if your business has a strong sales team but a weaker marketing department, the consultant might recommend reallocating resources to strengthen marketing efforts, thereby maximizing the potential of your sales team.

Implementation

Once your company and the consultant agree on a plan, the consultant should enter the third phase: the restructuring stage or implementation of the plan. In this phase, the consultant builds on your assets and eliminates liabilities. They also monitor the plan’s progress and adjust it as needed.

Types of Business Consultants

There are various types of business consultants specializing in different business aspects.

Strategy and Management Consultants

Strategy and management consultants bring specialized industry knowledge to help your business grow, seize new opportunities, and boost revenue.These consultants focus on strategy and management, assisting your business in several key areas, such as:

• Entering new markets or increasing visibility in your existing market.
• Restructuring your business model to develop a more cost-effective approach.
• Enhancing your company’s overall capabilities.
• Acquiring new business ventures.
• Facilitating mergers or restructuring your organization.
• Acting as interim middle management during transitional phases.

Operations consultants

Business consultants who specialize in operations can help you improve day-to-day processes. These business consultants take inventory of your current business model and determine the best way to produce the same high-quality results at a fraction of the cost and time. These consultants also help through quality control and understanding how to tweak and optimize your production for better results.

Financial Consultants

A financial consultant provides a comprehensive view of your business’s economic health. They assist with investment decisions and offer guidance on managing your company’s assets and liabilities effectively. Some financial consultants specialize further, providing expertise in financial planning, tax strategies, managing daily expenses, and selecting the best retirement plans for your business.

HR Outsourcing and Consultants

Top HR outsourcing companies and independent HR contractors can help manage your HR functions efficiently. These professionals can handle daily HR tasks, including recruiting and retaining talent, processing payroll, overseeing administrative duties, and managing employee performance.

Marketing consultants

Marketing consultants help businesses identify their strengths as a brand and expand upon them to create brand awareness and exposure. Whether your business needs a new logo or a social media strategy, a marketing consultant can be an asset in expanding your business’s reach.

What about consultant firms?

While you can hire an independent professional, you can also engage the services of a specialized firm for your consulting needs. Big firms like McKinsey & Co. and BCG wouldn’t necessarily fit a small business’s needs and budget, but a local firm might work well.
Run a Google search on your pain point and location – such as “Seattle brand strategy firm” – and examine your results.

The search will likely bring up firms you’ve never heard of, but a closer look at their projects and client reviews can help determine if they’d be a good match. Additionally, hiring a local firm means you have a better chance of finding someone you know or previously crossed paths with on their client list. These are some pros of a consulting firm:

• Extensive resources
• Multiple professionals’ expertise
• An established brand with hundreds of references
• These are some pros of individual consultants:
• Affordability
• Flexibility in scheduling and location
• Ability to dedicate their full attention to your case

How to Select the Right Business Consultant

Finding a business consultant who aligns with your specific needs can feel overwhelming. Whether you require assistance with high-level strategic planning or need a specialized expert to enhance your SEO or streamline product sourcing, it’s crucial to approach the process methodically, starting with clear goals and taking it step by step.

Finding the Right Business Consultant

Selecting the right business consultant can be challenging for business owners and management. The ideal consultant should demonstrate a passion for their work, a commitment to excellence, and a keen attention to detail. Choosing someone with expertise or experience addressing your business’s specific challenges is also essential.

Utilize Your Network

Begin your search by tapping into your existing network. Recommendations from colleagues, partners, or other business owners who have faced similar challenges are often more trustworthy than generic reviews. Contact your contacts to see if they know experts who can address your needs.

Explore Consultant Marketplaces

Dedicated marketplaces can be a valuable resource for finding consultants based on expertise, budget, and location. Platforms like Catalant, Graphite, and Business Talent Group are popular options. Social media platforms, especially LinkedIn, are excellent tools for finding professionals. Look for consultants with strong recommendations, search for keywords related to your issue, and evaluate the top results carefully.

Consider Freelance Platforms

For specialized expertise, freelance websites such as Upwork, Dribble, Fiverr, and Freelancer can be helpful. Evaluate potential consultants by reviewing their popularity, engagement levels, and feedback from previous clients to ensure they’re a good fit for your needs.

Vet your potential business consultant

Ask questions. If you rely on a personal recommendation, ask detailed questions about your colleague’s experience, the consultant’s process, and, most importantly, the results of their consulting work. Your colleagues can give you a unique insight into the long-term impact of following the consultant’s recommendations rather than just their short-term gains.

Learn about the consultant’s background and qualifications. Look at the consultant’s resume, educational background, and relevant certifications to your industry. It’s a good sign if they seem willing to explore new learning opportunities and keep their skills updated.

Ask the consultant about their hands-on experience. Hands-on experience is significant in the business world. If someone came directly out of college labeling themselves as a consultant, do they know anything more than you? Consider looking for consultants who have successfully owned or run small businesses, enterprise organizations, or specific departments.

Ensure their experience applies to your business. A former bank CEO may seem impressie, but do they have the knowledge and expertise to turn your cupcakery into a profitable small business? They might, but if you’re also considering a former restaurant owner who now makes a living successfully helping small eateries grow, this consultant may be a better match for your business. Look for consultants who have worked in your industry and with companies that match yours in style, size, needs, and goals.

Check out their website. You should also vet the consultant through their website and materials. Look for professional images and well-documented information about their services, and thoroughly review contracts and consultancy fees.

Examine their consulting track record. You don’t just want a consultant with the right experience; you want one who has demonstrated success with companies like yours. Ask for a portfolio or list of brands the consultant has worked for and request references. Look for a consultant who has helped businesses overcome the types of challenges you’re facing or who has grown businesses very similar to yours, and reach out to those companies to find out if they were satisfied with the services.

Evaluate if They’re the Right Fit

If your potential consultant has strong references and a proven track record of success, the next step is to meet with them to assess if they fit your business. Communicate your challenges and expectations, and evaluate whether their approach and personality align with your needs. It may be time to proceed with their services if they meet all the necessary criteria.

Designing a business consultant agreement or contract

Once you’ve found an excellent consultant, please do your due diligence and vetting, receive satisfying and verifiable references, clearly outline your pain points and expectations, and ensure you are comfortable with their style and personality; it’s time to confirm the arrangement.

Consultant agreements or contracts are typically drawn for three to six months with the option to renew. Agreements usually include details like the names of the responsible parties, consulting parameters, fee structures, payment schedules, outlined deliverables, and established deadlines.

A defined and confirmed deadline ensures that your consultant has sufficient time to deliver the promised results while prompting timely progress.

How to Measure a Business Consultant’s Success

Unlike employee performance reviews, there isn’t a universally accepted method for evaluating a consultant’s performance. However, it’s essential to set clear goals and measure deliverables, similar to Peter Drucker’s management by objectives and the SMART principles for managing employees.

Set Clear, Measurable Objectives

At the start of the project, collaborate with your consultant to establish clear, specific, measurable, achievable, relevant, and time-bound (SMART) goals.

Identify Tangible Outcomes

Define the financial and quantifiable results you want to achieve, such as increased revenue, cost savings, or reduced employee turnover.

Consider Intangible Results

Ensure your consultant understands the non-measurable outcomes you seek, such as improved morale, better alignment with business values, or enhanced customer satisfaction.

Track Progress at Each Stage

Monitor the progress of your objectives throughout each phase of the engagement to ensure things are on track.

Evaluate Key Performance Indicators (KPIs)

At the end of the consultant’s work, assess the established KPIs to determine if the goals were met.

Use a Consultant Questionnaire

Have your consultant provide a detailed questionnaire covering your business’s ecosystem and areas for improvement at the beginning of the project. Ultimately, the same questions will be used to compare results, especially intangible outcomes.

To evaluate the overall success of the consultant, ask yourself the following questions:

• Were the KPIs met and delivered on time?
• Was the collaboration smooth, and was the consultant responsive and helpful throughout the process?
• Did the consultant equip you with the necessary skills and resources to improve your business?
• What are the short-term, midterm, and long-term impacts of their work?
• What was the ROI of their consulting services?

FAQS