Should you hire a business consultant if you have a small business?

A business consultant is a professional who, for a fee, will help an organization define and achieve their goals through improved utilization of resources. A consultant will do this by identifying problems and recommending solutions. A business consultant will not only propose change but also help implement it.

Some common situations that suggest a business consultant may provide help to your small business include:
- You believe that performance could be better but not sure what to do to gain improvements.
- You have identified problems but do not have the specific knowledge and skills to solve them.
- You have the knowledge and skills but not the time or personnel to solve problems that have been identified.
- Your efforts have not produced the desired improvements.

The advantages of hiring a business consultant are you will be getting a special expertise, you can use them as needed, you save on tax contributions and on benefits. There are also disadvantages of hiring a business consultant, which may include having to pay high fees to the consultant, you have limited control over the consultant, and you also run the risk of tax problems if the consultant operates like an employee.

If you do decide to hire a business consultant for your small business, here are some of the common mistakes made by companies when hiring a consultant:
1. Not having a contractual agreement. Make sure to specify the agreed work and the timeframe in which the work needs to be completed in an agreement signed by both parties.
2. Not checking the consultant's background. Consultants vary in their skills and abilities. Some are at the top of their field, while others may have little or no experience. So be sure to check the consultant's background to separate the pros from the wannabes.
3. Not checking to see if someone in the company can do the job. A common mistake made is not checking the skills of your current employees before hiring a consultant. Business owners often times spend more money than necessary instead of taking the time to re-read the resumes of their staff.
4. Not checking the compensation scale. You need to research to find out the pay range for the services you require to avoid overpaying. Check the going rate in the industry and the rates for different levels of experience.
5. Not conducting a thorough hiring interview. It is imperative that you conduct a comprehensive interview, just as you would for fulltime employees. A consultant will be involved in the future success of your company, so remember this when interviewing potential candidates.
6. Not having a business consultant sign a letter of confidentiality. You need to keep in mind that a consultant may work for your competition after completing your project. Therefore, it is important they sign a letter of confidentiality.
7. Not clearly describing the project. Lack of clear communication is a common mistake. Many times, consultants and employers are not on the same page from the start, which leads to numerous complications and problems. Clearly define the objective and scope of the assignment, along with the anticipated charges, and the conditions under which the agreement can be cancelled. Review these terms and conditions with the consultant.
8. Failing to introduce the consultant to your staff. Make sure to introduce the consultant to your regular employees, especially those the consultant will be working with. Let your staff know the reasons why you have hired a consultant, along with the improvements you hope to gain.

After you have informed your employees about the consulting engagement, focus on establishing an effective working relationship with your business consultant. Be straightforward about any concerns that you have and address them immediately to help ensure the project is a success.