Consultants can bring expertise and experience that your business does not have otherwise, —according to the National Federation of Independent Businesses. They can help manage long-term strategies, complete a project that requires highly specialized skills or help you get work done efficiently.
But consultants can be expensive—even when the results they produce are substandard. That’s why it’s crucial as a small business owner to know when you should—and shouldn’t—hire a consultant.
Kirk Rossberg, owner of Torrance Bakery in Southern California, says he hired a business consultant this year, as well as looked into hiring a public relations team to promote their innovative products. Torrance Bakery celebrates its 30th anniversary in 2014.
“This has been a great year. Register sales have actually grown by double digits from the previous quarter of the same period a year ago,” he said in mid-December. “Still, sometimes you need someone from the outside to look at your business. Right now, we’re focused on managing costs.”
Decorated and dessert cakes represent 40% of total sales at Torrance Bakery, which runs a separate wedding cake showroom next to the bakery, and wedding cakes account for 11% of sales. Cookie and cupcake sales remain strong. Decorated cakes pose a challenge to profitability though, as special requests for custom cake designs are going through the roof.
Bakery owners might think accepting cake orders online would help alleviate some of the obstacles that cake shops run into with special orders. But Rossberg points out that consumer requests for unique cake designs are becoming so common that customers are quick to ask for extras —even online. “About 75% of our online orders now want special requests,” he says.
In general, hiring a consultant can help you solve a particular problem or turn your business in the right direction. Rossberg says that a regular refresh can help your business gain perspective and stay on the road to profitability.
The following tips on when to hire a consultant come from the National Federation of Independent Business:
Seeking advisory services
If you feel like your business needs a facelift, or your competition is trumping you, you may want to hire a strategic advisor who can provide guidance on high-level issues and business strategies like expanding your market. They’ll get to know the ins and outs of your business, and give you recommendations to improve your operations.
Helping with short-term projects
Not all consultants are high-level strategic advisers. Some are experts with a specific skill or area of expertise (like marketing, graphic design or information technology) that can help your business get through a particularly busy period. Hire a consultant to undertake short-term projects when you need additional assistance or a specialized set of skills. Consultants can jump right into the project with little training.
Hiring temporary staff
If you’re short-staffed and simply need help on work that isn’t associated with a project, consultants can help you “get over the hump.” They’re especially helpful in filling roles left open while you’re trying to find a new full-time employee or when an employee is on leave.
Finding the right fit
Business owners or managers can define the consultant’s role before bringing someone on. If you can’t find the right fit, don’t hire the best of a bad lot. Step back, and ask yourself if you can defer the task at hand or if a current employee can fill that role.
Define longer term needs
Consultants often pitch new projects after they’ve completed one assignment. Ask yourself if that project is really something your business can afford to undertake and if the consultant has the skill set to succeed on the new task. If you’ve hired the same consultant for three or four consecutive assignments—or if you’ve become heavily dependent on several consultants to run your business—it’s time to hire a full-time employee who can become intimately familiar with your business.