The Comprehensive Guide to Hiring a Business Consultant for Your Small Business

While you know your business better than anyone, no company is airtight. Improvement is always possible, and an external set of eyes can often make the difference between steady growth and an explosive trajectory. So why do we still hesitate to hire professionals? As a small business owner and consultant, I understand that running a small business comes with unique challenges that can hinder growth and success. While hiring a business consultant can offer valuable expertise and guidance, it’s important that you carefully weigh the pros and cons. This guide provides an in-depth look at the benefits and drawbacks of hiring a business consultant for your small business, along with insights into why some business owners may hesitate to engage with consulting firms.

Benefits of Hiring a Business Consultant

One key benefit of hiring a business consultant is their ability to provide specialized knowledge and expertise. Consultants bring a fresh perspective to your business, helping you identify areas for improvement and develop strategies for growth. They can also offer guidance on specific challenges, such as financial planning, operational efficiency, competitive positioning, and developing your people.

Another benefit of hiring a business consultant is the time and resources they can save you. Consultants are often specialists in data analysis or process, allowing them to quickly identify inefficiencies and develop new solutions. Their perspectives on efficiency can free up your time to focus on other aspects of your business, such as product development or customer service.

Additionally, hiring a business consultant can help you avoid costly mistakes. Consultants have experience working with various businesses and industries, giving them valuable insights into what works and what doesn't. By leveraging their expertise, you can make informed decisions that will benefit your business in the long run.

Daniel Kahneman, the author of Thinking Fast and Slow (2013), describes this as getting an “outside view” of your business. An outside view can help you learn from the experiences of all other businesses in your industry or the market overall. Then, decide on an approach that helps raise the chances of success for your strategies and projects.

Overview of Why Small Business Owners Avoid Hiring Consultants

Despite the benefits, many small business owners are hesitant to hire consultants. One of their main reasons is cost. Consultants can seem expensive, especially for small businesses with limited budgets. It helps to think of them as an investment in your business's future and longevity. By helping you identify growth opportunities and develop strategies for success, consultants can ultimately save you money in the long run.

Another way to look at this is to consider what your time would be worth if you had to learn a subject or process on your own. If hiring a consultant expands your understanding and makes you “more able” in some aspect of running your business, then it is undoubtedly a worthwhile course of action.

A lack of trust is the second reason small business owners refrain from hiring consultants. Owners often hesitate to share confidential information about their business with outsiders, especially those with connections in the industry. Here, it’s important to remember that some form of confidentiality agreement will bind professional consultants – either written or associated with their licensing (where applicable). If the consultant’s work isn’t regulated by a licensed organization, ensure that they establish clear boundaries and expectations through a written confidentiality agreement—ideally, one created by or reviewed by your legal counsel. This enforceable framework will help ensure your proprietary business information remains secure.

Addressing Your Objections for Hiring Consultants

We opened our blog by asking why we hesitate to hire consultants. If you’ve had any of the objections below, consider our perspective on ways you could reframe your concerns and identify new opportunities.

• Cost Concerns: Viewing consulting fees as an investment rather than an expense can help justify the cost. What are the risks or opportunity costs of NOT addressing your business problem? If the costs of hiring the consultant are lower in some ratio to the costs of not getting help, then it is a good investment. If budget constraints have you worried, there is usually always an opportunity to negotiate a payment plan or an adjustment to consultant service offerings. Be sure to ask consultants for help with coming up with an affordable plan before discounting their services out of hand.

• Trust Issues: Past negative experiences with consultants or a general mistrust of outsiders can make small business owners reluctant to hire consultants. Use your past involvement with consultants as a learning experience. Consider what is different about your current situation. Also, what measures can you take to avoid repeating a past situation that did not work out well?

• Fear of Dependency: Owners may fear becoming too reliant on consultants, leading to increased expenses without significant benefits. This risk can be mitigated by having clear expectations on deliverables (see Trust point above) and boundaries on the timeline of the consultation.?

• Resistance to Change: Small business owners may resist implementing the recommendations of consultants, especially if they involve new technologies or processes that disrupt current operations. Additionally, Owners may resist soft-skills training and development programs recommended by consultants, fearing disruption to daily operations. Experienced consultants understand that there is generally resistance to new technologies or processes within businesses and will have a method for introducing the change.

• Employee Retention Concerns: Often, hiring a consultant does not threaten job security for their employees or lead to talent loss. However, it ’s important to be upfront with the consultant on your non-negotiables for how employees are communicated with and treated. It is still recommended to get references from other clients on how well the consultant navigates employee communication—especially on topics such as job security.

The best strategy for retention is to have your employees in the right roles to begin with. Our free training video on Clarifying Roles is a free way to align your staff with the responsibilities that lead to long-term success. For a free introduction, click here.

• Limited Understanding of Processes: Some owners may not fully grasp the value of documenting business processes and implementing best practices, leading to missed opportunities for improvement. Another problem is when a person doesn’t have the right mental energy to implement a process. In this case, you can see all the steps that need to be done, yet you find yourself not doing them. Hiring a consultant who has the energy to get the job done will take the outstanding tasks off your checklist and your mind.

If you’ve ever struggled to identify the skills of your team, Rhealize provides consultation on our natural striving energies using the Kolbe A? assessment. We can help you determine where you have strengths in process development and management and where you will need help from another person to finish what needs to be done.

By following these tips, you can hire the right consultant for your small business and unlock the full potential of the relationship and benefits for your business—all without the friction that slows companies down.

For more information on our friction-free strategies, contact Rhealize to book a free discovery call and see if we’re the right consultant for you!