Decide when it is worth hiring a consultant
Hiring a consultant can be the best money you've ever spent or wasted money you will never see again. How do you make sure you get your money's worth from a consultant instead of wondering what you got for your hard-earned dollars?
There are only four reasons you should hire a consultant:
- They will show you how to increase revenue.
- They will show you how to decrease expenses.
- They will help increase your productivity so you can spend more of your time growing revenue or decreasing expenses.
- They provide advice (financial, personnel, environmental, etc.) that pertains to the legal aspects of your business.
The first three reasons help grow your business. The last reason helps keep you out of jail and off the front page of the newspaper.
You've probably never thought of your accountant as a consultant, but they are a good example of when to use a consultant. An accountant knows how the tax laws can benefit you (resulting in decreased expenses) and provides advice on how to correctly file your taxes (to keep you from being on a first-name basis with your local IRS rep).
Your relationship with your accountant also epitomizes the other qualities you should look for in a good consulting relationship.
You have a clearly defined need.
You have a pretty good idea of when (and why) you should call your accountant. Make sure you have a clear understanding of when and why you want to contact a consultant. Your needs might be as vague as “we want to increase sales” or as detailed as “we need to understand the new marijuana law.” In order to get the most for your money, you need to be very clear about your needs, both with yourself and with the consultant.
Your need is temporary and cannot be filled by one of your employees
You spend time with your accountant because you either don't have an accounting professional on staff or you need a skill that your in-house accountant can't provide. Sometimes you simply don't have an employee who can do the work that you need. Other times you might need someone to provide a second opinion to verify a conclusion that you've already reached with your in-house staff. These are both very good reasons to contact an outside consultant.
You understand what services they can and cannot provide
You feel comfortable calling your accountant with tax questions, but you probably would never ask them to create a new sales plan. Make sure you know what skills and services your consultant is known for and, more importantly, what they are not known for. You want to leverage their expertise, not use them for every business need.
You trust them to provide referrals for your other business needs
You probably trust your accountant enough to ask them for referrals for insurance agents, attorneys and other business professionals. A good consultant should have a network of other authorities they can call when you have needs that they cannot accommodate.
You know what you will do with the information
You know what to do with the tax information your accountant provides at the end of each year. Make sure you know exactly what to do with the information that a consultant provides. Many recommendations made by a consultant never get implemented. The ideas might be the best in the world, but not knowing what to do with the information is the same as not having it at all.
Knowing how to approach the consulting relationship can be the difference between a good return on your money and no return at all.
Consultant Alison Hinson, owner of Alison Hinson MBA LLC, can be reached at ahinson@midmaine.com.
Most Recent
Most Recent
Comments