The business world is constantly changing, and it can be difficult for business owners to keep up with the demands. One way to stay on top of things is by consulting a business consultant. But what does a business consultant do? What are the benefits of having one? When should you hire one? How much do they cost? I’ll answer these questions and more in this article.
What does a business consultant do?
There are business consultants for all aspects of business, but some common ones include:
- Human resources (HR): These business experts help with hiring and training employees. They can also give advice on pay rates, performance reviews, and employee retention.
- Operations: Some business consultants work to improve an organization’s production methods through the use of business and business processes.
- Strategy: These business consultants help with long-term business strategy, such as how to boost sales or improve products or services. Their goal is often to make an organization more sustainable over the long term by improving its core business practices.
What are some reasons for hiring a business consultant?
Reasons for hiring a business consultant include (but aren’t limited to) the following:
- Business growth or change.
- Business crisis management/recovery.
- Business expansion (either domestically or overseas).
- Business restructuring, such as during a merger and acquisition situation.
You should consider hiring a business consultant if you need their expertise to help your business grow, improve efficiency, or perform better.
What are the benefits of business consultants?
Business consultants offer several important benefits to organizations:
- Business cost savings/avoidance through improvement in productivity and efficiency.
- Advice on business strategy from a business perspective, which can help make sounder decisions about expansion or product development. This also helps business owners or executives gain business acumen.
- Access to expertise that business owners might not have on staff, such as knowledge of tools and technologies used in business operations (similar to an IT consultant).
- Advice from a fresh perspective with industry insight into your business’ current state and future needs. This can help identify new business opportunities.
- Business continuity and sustainability as your business grows or changes in the long term.
What types of business consulting services do they offer?
Businesses can hire business consultants for one-time business consulting projects or ongoing business consulting services.
- One-time business consulting: These types of business consultants are hired to give advice on a specific area, such as sales and marketing strategy. They might also be brought in for one or two meetings during the project’s duration if needed (such as when the consultant is still learning about business operations beforehand).
- Ongoing business consulting: These business consultants are hired to offer ongoing advice on a variety of business topics, such as hiring and training employees. They’re also involved in the day-to-day business operations more so than one-time business consultants (such as by attending meetings or giving reports), although they might not be as involved in business operations as business owners themselves.
The benefits of ongoing business consulting include the following:
- Consistent industry insight and advice on how to improve business performance over time. This is something that one-time business consultants cannot offer, since they only help with a specific project or problem before moving onto their next assignment.
- Business owners and executives can develop business acumen over time through ongoing business consulting.
Common mistakes in hiring a business consultant
Hiring business consultants isn’t necessarily easy, as there are several pitfalls to avoid when trying to hire one.
For example, business owners must take the time to interview multiple business consultants with different areas of expertise and spend enough time vetting business consultants before hiring them (such as by checking their references and past project history).
Business consulting can also be expensive, so business owners should avoid hiring business consultants only when in crisis mode (such as if their business is failing or losing money).
It’s important for business owners to consider what specific areas of business consulting they need help with before entering into a contract. Businesses must take the time to research different business consultants and ensure that all aspects are covered in the business consulting contract (such as business cost, business plan and business goals).
Business owners should make sure that they’re going to receive value from their business consultant before hiring them. They can assess this by determining whether the business’ issues are suited for a consultant’s skillset or if it would be more beneficial in terms of time and cost to hire business coach instead.
Business owners should avoid hiring business consultants without doing any research beforehand (such as by checking their reviews and references). It’s important that you take the time to vet business consultants before signing a contract with them, as business consulting can be expensive and business owners want to make sure they’ll receive value for money from business consultants they hire.
If business owners do their research and avoid these common business consulting mistakes, then the chances of finding a business consultant that’s right for them will be much higher.
What do business consultants charge?
Business consultants generally charge business owners by the hour or on a project basis. They might also offer monthly business consulting packages for ongoing advice (such as business management, finance, HR/employment law and marketing).
Consultants tend to be more expensive than business coaches because they have more industry experience that you’re paying for. Business consultants can range from $75 per hour to upwards of $500+ per hour.
Are business consultants worth the money?
As with most things, business consulting isn’t for everyone. It’s important that you have an idea of what your specific business needs are before hiring a business consultant (such as whether it would be more beneficial in terms of cost and time to hire a business coach or business consultant).
Hiring business consultants can be expensive, but they tend to provide more value in the long-term when compared with business coaches. Business owners who are looking for ongoing business advice and support might benefit from hiring business consultants instead of business coaches (such as if your industry is complex and requires knowledge of business operations to the nth degree).
What factors should you consider when hiring a business consultant?
It’s important that you take the time to consider your business’ needs before hiring a business consultant (for example, if you need help with marketing or dealing with vendors). You should also decide whether it would be more beneficial in terms of cost and time to hire a business coach or business consultant. Business consultants can range from $75 per hour to upwards of $500+ per hour, while business coaches tend to be less expensive (and usually charge by the month instead of hourly).
Some factors to consider when hiring a business consultant are:
- Business experience and expertise.
- Business consulting rate per hour or project basis.
- Business consulting packages for ongoing business advice (such as business management, finance and HR/employment law)
- The length of time you need to work with a business consultant
How does one determine if they need business consulting or business coaching?
It’s important to know the difference between business consulting and business coaching. While business coaching can offer support for business owners, it tends to be less intensive than business consulting (such as if you need ongoing advice about a specific area of your business). Business consultants tend to charge more money but provide more value in return when compared with business coaches.
Business consulting can be a great business investment for business owners; it’s much cheaper than hiring in-house staff members to handle business issues. For example, business consultants are often experts at dealing with specific problems and they know what vendors you should use (and how to negotiate the best deals with them).
A business consultant is also able to identify business trends and identify strategies that will increase business revenue. They can also provide guidance for business owners on how to handle common business issues such as staff management, sales pitches or marketing campaigns.
If you do your research first, avoid common mistakes when hiring business consulting services and ensure that your contract with them covers everything you need (such as cost, business plan and business goals), then you’ll be well-placed to hire a business consultant that meets your business needs.
Business consulting can be lucrative
Someone who became a millionaire by offering services such as business consulting was Jason Capital, who was once a business consultant at PricewaterhouseCoopers. He started his business consulting firm, J Capital Research, after working in the finance industry for 15 years. His business has quickly grown to become an investment banking and equity research company as well as one of New York City’s leading advisory firms (according to Forbes).
If you’d like to learning more about Jason Capital net worth, read I Buy I Review’s article here.