Small Business Consultant: Free Checklist & How to Choose One

The right Small Business Consultant can have a tremendous impact on your business and transform the business into what you want. Most of the time a small business owner starts his or her business from a technical point of view. From that technical skill, a service or product was created, and a business was formed. Most did not learn best practices in the management of a business. As a result, the business owner reaches a certain level and the business stalls and stops growing.

This can happen right at the start or after a period of time. It all depends on the many circumstances the business finds itself in. A small business consultant can assess and prescribe a solution. Below are the ten factors that should be considered when choosing the right business consultant for you.

These are not in any order as they all impact your decision depending on your preferences.

1. Experience

A small business consultant who has experience with small business issues is an asset to have on your side. The more experienced they are the less risk their proposed solutions will be. This is because they have seen what works in reality, and it’s not just theory. The insights from experience cannot be dismissed and you should choose the small business consultant that has the most experience if all else is the same.

An experienced consultant is going to get to your goals faster. Although they may have a slightly higher hourly rate than an inexperienced one. When you factor in speed and the quality of the proposed solutions, the choice may be obvious. It is important to choose a small business consultant that has small business experience. Mature businesses will have different issues. I can categorize the three levels of a business that will illustrate this in general as follows:

I. Startup

Usually, a startup needs assistance in marketing, sales, and general set-up. It is very different than the next two categories.

II. Small Business

Generally speaking a business with less than twenty employees will need more than just marketing and sales. These small enterprises may also need HR best practices, along with the organizational implementation of how the business is structured to grow past this stage.

III. Medium Sized Business

Medium-sized businesses usually have figured out the marketing and sales although they may need to be reviewed to ensure that best practices are being implemented. Most of the time medium-sized businesses need policies, procedures, systems, and optimization for efficiency. These businesses typically have more than 20 employees and productivity is usually the main issue.

These are general categories based on my own 30+ years of experience and there are plenty of exceptions. For instance, you may have a business that manages to grow past 50 employees and still needs help with its marketing to get to the next level. Your circumstances depend largely on your strengths and weaknesses as a business owner.

2. Type of Consulting Required

There are many types of business consulting, and you must choose the one that corresponds to the issue that you want to solve. Here are 10 common ones:

• Tax consultants
• It Consultants
• Marketing Consultants
• Sales Consultants
• HR consultants
• Operations Consultants
• Management Consultants
• Business Growth Consultants
• Automation & Technology Consultants
• Finance Consultants

These ten are only a fraction of the types of consultants that exist for your business. I recommend that you always start with a ‘discovery session’. This will confirm the type of consultant that you need with an expert. I have often noticed in these last couple of decades that sometimes the issue that a business owner or professional is looking to solve is only the symptom of a root cause. The real reason permeates underneath it without proper attention.

An example of such a situation is if you want to implement and purchase an employee time management system. Your issue is to decrease the employee lateness you are experiencing. However, this may be a symptom of poor supervision, policies, or enforcement. Certainly, purchasing the time management system may decrease the lateness at the beginning. However, not likely in the long run. Therefore, a discovery session with a small business consultant is going to be valuable to you. The experienced small business consultant is going to be looking at the root causes and not the problems experienced as symptoms of the root cause.

3. Communication Style

It’s important to choose a small business consultant that you respond to well. Communication styles vary as do personalities with some being more direct and abrupt to the other side of the spectrum. Some people do not respond well to someone speaking to them in a very blunt manner. They may require a small business consultant who is polite and not as blunt. There is no right or wrong choice, but you should know what you need for the best results. Many clients need to be pushed. Accountability with such clients is an aspect that must be included in the consulting work. While others are self-driven and will not require this aspect to achieve the results required by the consultant. This is why it is important for you to have discussions with potential small business consultants that you are going to work with. It will enable you to have the information to decide properly.

4. Type of Firm

There are many types of consulting firms from specialized firms to large and small ones. Specialized firms usually attract large clients as the work they require is very in-depth in a very specific areas. Here are ten hyper-specialized types of consulting, but the list is only a small number of the exhausted list:

• Marketing SEO consultant
• Marketing Branding consultant
• Social Media Consultant
• QA & QC consultant
• E-commerce consultant
• Business Development Consultant
• Inventory Management consultant
• Logistics consultant
• Purchasing consultant
• Business productivity & efficiency consultant

Another aspect of choosing the right small business consultant for you is to choose the size of the consulting firm they belong to. The advantage of a smaller firm is that you will receive very personalized services. Larger ones will require large retainers and have higher hourly charge rates. It’s important to understand that smaller firms will not likely charge for every interaction. Whereas, large firms may charge to respond to emails or for every single minute of consulting. When you choose the small business consultant for you ensure that you consider whether you need a hyper-specialized one or a general small business consultant. From what I have seen in my experience most small businesses need a general business consultant. There may be many aspects of the business that need to be improved simultaneously.

5. Budget

One consideration that any service that you will purchase is the cost of the service. A major hurdle for small businesses is the cost of consultancy services and whether they can afford them or not. Like any investment, it should be seen in a practical manner. How you assess the cost is most important. For instance, if you have a repeated issue in your business such as employee lateness. The behavior is costing you $100,000/yr. Would spending 5% of that on consulting services to diminish it by 50% be a good investment? Quantifying the issue or issues first will provide you with the answer you need.

After all, if this situation was yours, hiring a small business consultant to achieve the goal would have savings of $50,000/yr multiplied by 5 years = $250,000 in savings and an ROI of just over one month. The ROI calculation is $50,000/yr=4,167/month. Your investment in the consulting services would be paid back after approximately 5 weeks. After this point, you would start to realize actual savings from the solutions provided. In this scenario, you would receive $10 back for every $1 spent on the services in the first year alone. In most cases, the return on investment is even higher than this approaching a 20 to 1 ratio.

In summary, your budget is important to establish but make sure that you assess the impact of the issue to your business as well.  Arriving at a quantifiable business impact number will provide you with the right information. Consulting rates will vary. Knowing this information may be a factor in whether you choose an experienced consultant or not.

6. Scheduling

Another consideration that you must think about is your schedule demands and the small business consultants’ schedule as well. Many small business owners cannot have consultations during normal business hours. They must engage with consultants after hours, so flexibility is an important aspect of choosing the right small business consultant for you. Most small business consultant firms understand this challenge and will be available for the business owner. After all, you don’t want to be unavailable for consultations while paying for that time. It increases your consulting costs tremendously. Smaller firms are usually more accommodating than larger firms. It is an element that you must speak about and consider when speaking with potential consultants.

7. Expertise

Identifying what you need from a consultant is the first step followed. Then whether you need a hyper-specialized small business consultant or a general business consultant. One important point is that many if not most general business consultants who have a lot of experience will resemble hyper-specialized small business consultants. Their vast experience has taught them to have a lot of depth in many business areas resembling their specialized counterparts. This is especially needed with small business consulting. Assess the expertise of the small business consultant and make the choice.

8. Prioritization

It’s important to understand what kind of priority the small business consultant is going to put into your business problem. If your issue is not going to be a priority, then you may want to find someone else. You may want to ask questions to the proposed consultant who is going to be assigned to you if he/she has too much work. A hint maybe that the individual small business consultant struggles to find a mutual time for both of you to meet. Another clue may be that the consultant finds it hard to stay organized and may not be prepared for your meeting. Although this is a hard element to uncover it is an important one for you as you don’t want your small business consultant to put half the effort they should dedicate to your goals and projects.

9. Problem-solving Approach

It is important that the small business consultant have a problem-solving approach to the issue being addressed. You want to ensure that the individual not only addresses the symptoms usually seen as the problems being experienced but the root causes as well. Otherwise, the problems will never be resolved and the continuation of the same issues arising continuously will happen. The best approach for a small business consultant to use is outlined in the following 8 steps:

• Clearly define the problem being asked to solve
• Gather as much data and evidence as possible in order to understand the current baseline of the issue analyze the data to find the root cause of the problem
• Propose solutions based on the investigation and data analyzed
• Gather data on the cost of each available solution and its corresponding impact on the problem
• Recommend a solution that aligns with the client’s goals
• Implement an action plan to execute the client-chosen solution
• Propose a control mechanism so that the problem doesn’t go back to its original state

This 8-step approach will give you the best results. It will provide you with options that you may not have considered previously. At times the issue has no past data or has incomplete data. In this case, the small business consultant will be looking at their experience and best practices to ensure that proper solutions are provided to the client. Regardless of whether there is data or not. The small business consultant will still go through these 8 steps as this is best practice.

10. Size of Your Business

The size of your business matters. Although very large consulting firms will have dedicated personnel for small business consulting, they often don’t prioritize the smaller clients. It’s something that you must be aware of. It is important to understand that your business should be partnered with a consulting firm that specializes in small business consulting. Aligning yourself with a firm that specializes in small business ensures that you get the experience and attention needed.

Are you looking for an expert business consultant?
Learn More: Expert Business Consultant

Why Trust My Advice

I have been in business consulting for more than 30 years. A vast majority of my work is with small businesses. My experience has taught me that a personal connection with the prospective client is important to have a successful outcome. When mutual respect and connection are there the client will be more inclined to be transparent and will want and welcome working together to achieve results for the business. I do hope that you consider my services should you ever consider looking into obtaining a small business consultant. I would like to thank Mr. H. Alamdar for providing me with this testimonial on June 2024 via email to me.

Testimonial

“As we grew as a company we had to promote 2 of our top-level Managers that were demanding higher salaries. In order to help us determine how to set a bonus structure and increase the salaries according to industry best practices we engaged Duarte as a consultant.

Initially, we did not think much of this and since we have worked with consultants in the past we were not expecting much more than some industry best practices to help us in decision making.

However, I could not be more wrong, working with Duarte changed the way we work at our company completely.

We realised that figuring out the bonuses and salary of our 2 managers was actually 2% of our problem. We had 98% of our business not being run properly.

The biggest mistake most successful entrepreneurs make is that they think since they are successful they must know the game of business.

I feel I have covered the journey of being an entrepreneur to a CEO in the last 2 months. Although I have thought about myself as a Ceo for a while now, I realised I have been an entrepreneur all this time.

Duarte helped me understand what it is to be a Ceo of a company. Previous to meeting Duarte I had joined many groups that try to help CEOs but they don’t give you an action plan or leave you with a clear picture.

Yes, you might learn a few tips and tricks that you could have learned by watching a few YouTube videos but that’s about it.

Duarte’s method of not giving you all the information and instead having you come to the right answers yourself and guide you towards the right direction was a life-changing experience.

My stress level has decreased by 70% and I am very confident that I can grow my business 3 times more with less effort.

Many managers we had appointed to do the job all of a sudden were being held accountable for work we had expected them to do. it’s not that we didn’t have any systems it’s that they were not good enough and most employees and managers could easily give us excuses to not do the work

Not only did our productivity skyrocket but our profitability and sales have also started to increase. Our accounting department which was previously just giving a basic P&L now has been identifying ways to cut costs and increase the net profit margin of the company.

Every department in our company has seen a significant change and many things that were previously thought not possible to me after only 60 days of hard work from Duarte now look possible.”

H, Alamdar
Orange County California
June 2024

Myth About Small Business Consultancy

The biggest myth about business consulting is that it is for large corporations. The truth is that it is for any business regardless of size. There is a simple test of whether you need consulting as a business owner. Just ask yourself if you have exhausted yourself and tried many approaches to solving the issue. If the answer is yes, and the issues persist or increase, then you should approach a consultant. To continue with one or many problems is to have distractions from growing your business.

Big business has learned this lesson and why they engage with consulting services on an ongoing basis. The truth is that most businesses will benefit from either periodic or ongoing consulting services. The question for most business owners is not cost but comes from their own ego. They may believe that the consultants will take over the business and lose control. This too is a falsehood as consultants will present you with options and you as the business owner will always be in control.

Conclusion

Finding the right small business consultant can be a life-changing experience and a great opportunity for your business. However, make sure that you consider everything mentioned above so that you and your business can benefit from the practical knowledge that a good small business consultant can bring. Below are three Frequently Asked Questions.

FAQ’s

1. How much does a small business consultant charge?

Although there are many ways a small business consultant is compensated for consulting services there are three predominant ones:

• Hourly rate (most common) – This is the most prevalent method for consulting services. The rate is usually based on the expertise and experience that the consultant has. Rates vary depending on the expertise and size of the consulting firm, and can typically range from $120/hr USD to $,1500/hr. USD. Use the advice I have given and shop around for the right one for you and your business challenges.
• Project-Based Fee – This is a flat fee negotiated between the consultant and the business owner. It takes into account the forecasted amount of time to complete, the complexity, and the value that the client will have from achieving it.
• Commission-Based – In many situations when consultants are hired to grow the topline sales revenues of the company they may take the project on a commission basis. Commissions can be arranged in several ways including a percentage of the sales which typically is between 5%-20% of the sales depending on the sales value. They can also be a hybrid of hourly and percentage of sales. Under this structure, the consultant receives a set hourly rate with less than 5% of the sales. Another method of commission-based compensation is where the small business consultant is paid a set hourly rate and a bonus incentive when specified goals are reached.

2. What does a small business consultant do?

A small business consultant improves the business. The improvements could be in specific areas that are causing continuous issues to the business or to generally improve the business. General improvements include growing topline sales revenues, increasing gross and net profit margins, and improving other areas of the business. The five areas listed below are just a few of an exhaustive list:

• Productivity – A small business consultant evaluates the processes that you have in place and makes them more efficient. This will save your business money and reduce operational stress on both the employees and the business owners.
• Cost management – The consultant will identify cost-saving opportunities so that the savings can be relocated to other needed areas of the company.
• Inventory management – The consultant will optimize inventory management by implementing systems such as the 5S system and more. Implementing systems will decrease material wastage and the value of the needed inventory. The reduction is a savings that can be relocated to other areas of the company to help it grow.
• Human resources – Here the consultant can advise on best HR practices. These include recruitment, training, and employee retention programs and strategies and more.
• Quality Control – A fear among many small business owners is growing and losing control of the business including the quality of service provided to clients. Implementing quality assurance and control measures eliminates this fear and provides full control for the small business owner.

Small business consultants are a great ally to any business. These listed areas of improvement are just some of the benefits you may gain from hiring the right one for you.

3. Is it worth it to hire a small business consultant?

The overwhelming answer is a resounding yes. Especially when you know upfront how much a problem is costing you and your business. When you spend $1 and receive back $10 or more for every spent dollar on consulting services, then it is a no-brainer. Taking all this into consideration you may wonder why most small businesses don’t already have one.