Why is a business consultant or a business coach critical to the success of a business?
Having spent over 8 figure budgets on hiring consultants, I know that consultant can add significant value or act as a sinkhole where money disappears. There seems to be no middle ground here, as its always either very good or very bad. With many success stories of hiring consultants, I would like to share my approach on identifying and managing to consultants who can add value to your business.
Given that we are a business consulting firm focused on small and mid-sized business, I would like to highlight that this article shares more of my thinking behind starting Mindful Solutions but is not intended to act as a business pitch. This is more like how I would go about choosing one if I had the need today
So is it a doctor or a personal fitness trainer?
This depends more on the reason you are seeking a consultant. If you are having a specific problem or concern area to address, just like ‘when you are sick, you go for a doctor’ approach to identify the best fit business consultant. If you are seeking someone to help you grow or scale into an interesting opportunity, then you seek someone like a personal trainer to help you make your way through that opportunity.
The doctor approach:
Some of the key factors you may want to consider are:
- Education – initial and ongoing, is the person having an adequate academic understanding of the problems
- Experiences – does the person have good credentials working with challenging situations around your problem area
- Diagnostic tools – does this person have the right analytical skills to prescribe and interpret complex diagnostics to identify the problems
- A holistic approach to solutions with a clear understanding of ‘side effects’ of isolated/short-term actions
- Has a reliable network of specialists to whom one can be referred to in case of specialized requirements (finance, supply chain, IT, etc).
- Focused on solving the problem within the shortest time horizon possible and not focused on up-selling
Just like with doctors, it is important that the recommendations are followed and actions are actively pursued to ensure the consulting engagement is successful. In specific situations, it is okay to get a second opinion, however, refrain from trying to Google all recommendations and second-guessing solutions based on internet research!
The personal trainer approach,
While many facets of the doctor approach are still valid here, some of the additional considerations would be :
- Personal success stories and track record of growing businesses in the area being coached
- Personality fit – able to relate and work with you regularly over a longer period of time
- Expertise in multiple methodologies and processes to prescribe the most preferred path for you to adapt
- Access to a large network of experts to access the latest trends which may be optimal for your situation
- Good communicator and motivator to help you push through the roadblocks and hurdles
Similar to following the advice of the doctor, following the regimen prescribed by your consultant is one of the most critical factors for success while pursuing growth. Unlike the discomfort of a problem, having a focused approach on growth requires a lot of self-discipline and self-motivation.
Other factors to consider
Cost – If managed properly consulting spend should ideally give in excess of 10x returns within 12 months of completing the assignment. For instance, a US$ 2000 spend should ideally yield US$ 20 000 in additional profits within 12 months of project completion.
Time – For problem-based assignments, the focus should be on a quicker resolution requiring intensive time investment from the coach as well as you over a short period of time. For growth focused engagements, it is important to have a regular schedule of meetings over a longer period of time to build the right rigor and focus.
Virtual vs in person – In-person meetings are ideal, though typically more expensive, time–consuming and having fewer choices for true experts within your neighborhood. Virtual options give you access to a wide range of specific experts who can offer precise support at an acceptable price point. My personal preference is audio calls in a room with less distraction or a video call.
Essentially investing in a business coach or a business consultant can be one of the best investment decisions given the high return on investment for small and mid-sized businesses. However, there are many dubious consultants who are more focused on up-selling and short-term yields, which makes it more difficult to identify the ideal long-term partner without losing money.
One important word of caution – In business, it is extremely important for you not to listen to or follow advice from those who do not have expertise in your area of focus – free advise can end up being extremely expensive.