7 Things to Consider When Engaging Small Business Consultants

Many small businesses are experts in their field and know their own business inside and out. However lots of small business owners lack the time or expertise required to implement certain projects. That’s where a small business consultant can step in and help.

In order to achieve a successful project it’s important to be clear about what you want your consultant to be able to do for you. Just as important is selecting a consultant with the right skills for the job, but how do you make sure you don’t get off on the wrong foot?

Here are some things to consider:

1. Are you looking for a research/diagnostic approach or do you need help with implementation?

Firstly are you looking for someone to take a diagnostic approach to a business problem you are facing? For instance, which market segment should you enter? Or what product line should you sell? Or is your business need about implementation? For instance, you’ve identified that you need to be on Social Media and need a marketing consultant with the expertise to make this happen.

The two needs are different and some consultants are better in one area than the other. To find out whether your prospective consultant prefers to work on implementation projects or research projects ask them. Don’t be afraid to ask them for specific examples of projects they have worked on and how they have tackled projects similar to yours in the past.

2. Ask prospective consultants how their clients are better off after they leave.

What sort of outcomes were they able to achieve for their clients? Look out for wishy-washy answers. Look for specific examples and outcomes. Does this fit with the sorts of outcomes that you would like for your business? Where they able to increase website traffic by a certain percentage, reduce staff turnover by a certain amount or generate more business for the client?

Picking the wrong person for the job might end up feeling like you are pushing water up a hill with a rake. Not only will the results be less than optimal but it may end up being a costly and stressful experience also.

3. Be careful of wanting champagne on a beer budget.

Do you want fast, cheap or talented? You must pick two out of the three. There is a triangle trade off here. You can get premium talent, faster results or a cheaper cost but Taylor Swift won’t teach your team how to sing tomorrow for free if you see what I mean.

Often a small business owner will set a budget and then begin the search for the best talent and/or fastest result within that budget. From my experience a budget-driven approach can often compromise results. Your best approach is to establish your desired outcome, then judge each potential candidate by how likely they are to be able to achieve that outcome.

4. Look for a solid “About Us” page.

Ask consultants about their qualifications and their approach. With so many so-called ‘experts’ out there it’s really important to identify who is qualified and able to do the job for you. Ask prospective consultants questions about their skills and experience to determine whether they are fit for the job. Are they methodical in their approach? Do have a history of achieving quality results for clients? This will help you to avoid being mislead by organisations with few processes, a glossy website and no real qualifications or experience.

5. Ask yourself whether you think you will be comfortable working with the consultant.

Do you think they are going to be the right fit for your business? Can you see yourself and your team working well with them? Sometimes it’s less about the exact industry experience they have had and more about their ability to get results.

6. Think about goals and outcomes first.

Don’t pick a technical specialist to do a job when you really need someone who can deliver a sales outcome. Think about your goal first, what are you trying to achieve? For instance, if it’s conversions and leads from your website then perhaps what you really need is a marketing consultant to advise on the layout of the website rather than just a technical person to do the build. A technical person can definitely build the website for you, it will function beautifully, but will it achieve your goal of converting traffic to sales?

7. Be wary of small business consultants who are all things to all people.

A good consultant will be honest about what their speciality is and will not simply be a ‘yes’ man or woman. They will push back on projects, ideas and suggestions that they don’t think are right for your business or are beyond their area of expertise. Look for a consultant with backbone not someone who lets you steer the project without alerting you to the danger that lies ahead because they are too afraid to question your judgement or afraid they will upset you. I’d rather have an expert question me and make suggestions than sit back and watch me sink the ship!

So whether it is a marketing consultant or a small business consultant you are looking for, many of the same rules apply. Identify what you need and look at it from an outcomes perspective, work out who has the expertise to help you achieve your goals and whether or not you are comfortable working with them. Look for someone who is genuinely interested in working with you and passionate about what they do.

This ONE Thing Can Help Your Business Succeed

Man, do I have a passion. Well, maybe I’m starting a little too far along in the story here – let’s roll back the clock a little bit so you can see where I’m coming from.

I was watching TV the other day and I caught the end of a show about some investors looking to finance the next big product or company. The premise involves amateur inventors and entrepreneurs who try to achieve the American Dream by getting one of these super-rich investors to agree to go in on their ideas – usually with a sizable investment that would allow the entrepreneur to scale their operation in a big way or just launch their product.

During this particular episode, one of the investors was intrigued by the entrepreneurs’ idea, which would do something great for some poor people in Africa while providing a quality product to American consumers at a reasonable price. But this investor, however moved he may have been, responded with something that rang so true I wish I could repeat it to every single investor I meet without coming off as rude or preachy.

What did he say? It was something in the vein of, “this is great and it warms my heart, but HOW WILL IT MAKE ME MONEY?”

Now, before you whip out your list of expletives and email them to me (and compare me to a heartless money monger), let me explain why I think this is a crucial question to ask yourself if you are a serious entrepreneur.

I know most of us have a many things we’re passionate about. Some of these things run so deep in our veins that we feel compelled to make a business out of it. Generally, there’s nothing wrong with that. If you like to get creative with people’s hair or makeup, you may want to open a beauty salon or start a cosmetology business. When I was a kid I met a guy so passionate about baseball cards and comic books that he opened a local “Cards and Comics” store (this is where I met him). I loved going there because this guy knew his stuff. He knew everything that was going on in the various series of comics, and he knew which baseball cards would be the next best ones to save in a hard plastic display case.

I remember wanting to buy some cards off of him, and he wanted more than the cards were worth, because he said Darryl Strawberry and a few others were going to be HUGE.

Here’s the problem with this guy’s business, though: he was too passionate about the business and not passionate enough about making money. There was no question that this guy knew his stuff – he knew the product inside and out – but he didn’t know his business inside and out. The sad reality is that the best he could ever hope for, like the cosmetician or hairstylist, is to make a living, rather than make serious money. And again, if that’s what makes you happiest, then that’s almost all you’ll ever need. Maybe the people on that show I mentioned could start a nonprofit to help these African ladies and they could feel fulfilled for the rest of their lives. But… to make it big, this “Cards and Comics” guy, named Rob, needed to focus more on growing his business.

I found out much later in life that eventually Rob closed shop in the early 2000’s, which serves as proof of his biggest mistake. The key here is that, even a small business needs a plan for at least some growth. Even if to offset any unforseeables like a lawsuit, government regulation, or whatever. But his passion for baseball cards and comic books made him blind to shortcomings in his business. I’m willing to bet that, on a bad month, he convinced himself that the next big “crossover event” in a popular comic book would dig him out of a hole. Or perhaps the next Mickey Mantle would have a special limited edition card that would bring him a big payoff and keep him in the black.

His passion for the sport and the comics, however, blinded him to the possibility of Darryl Strawberry having substance abuse issues, or to Jose Canseco writing a bestselling book naming several top players as anabolic steroid users – which, of course, made many of these players lose all credibility as great athletes. So, cards that could have been worth thousands today, are worth $150 or less. Now, that may sound like a pretty good return on a card that only cost a few cents, but we can’t ignore the time value of money, nor the harsh reality of inflation.

The big takeaway here is that if you have a passion that drives you to open a business, you first need to have an honest soul-searching introspection to determine if your business idea is one that can truly make you a millionaire or if your passion for the product or service would overtake your passion for making money. If it’s the latter, you may be dooming yourself to becoming part of that infamous “80% of businesses fail” statistic – and nobody wants that.

Are You Making These Five Business Mistakes?

Having business systems in place is crucial to the success of your business.

The question is: How can you make sure your business processes actually help rather than hurt you?

Let’s discuss five mistakes many businesses are making.

Mistake #1: Not having an overall goal.

It’s common for people to focus on the details of the business but not on specific tasks that they need to perform. If your business doesn’t have an overall goal then your details would tend to be fuzzy. This can cause a disconnect.

Every business should have a goal and a model to follow. You may have a goal for instance of hiring team members. If that’s the case it’s more important than ever for you to make sure that you have goals and systems in place.

Your employees will be looking to you for guidance and direction so you need to make sure you have your goals clearly defined before you tell others what to do.

Having an employee handbook will help new hires understand their responsibilities.

Mistake #2: Not using technology properly.

All businesses need to use technology to some degree. That being said no business should rely 100% on technology. Why? Technology can break down. Relying too heavily on technology may weaken your business model.

For example: A grocery store looses power. That meant they can’t use their cash registers. The employees need to write the items down that were purchased and figure out the exchange of money. If the staff isn’t trained to do this prior to this disruption it could wreak havoc on the business.

Mistake #3: Not being detail oriented

You need to document the details for performing various tasks in your business. This helps a new person who comes onto your team know how to operate the system with little guidance.

The best way to handle this is to have two systems in place. One would be written the other would be via technology (software).

Mistake #4: Having too much clutter.

Not everything in your business needs to be written down word for word. You can write down the main idea. Having too much documentation can cause confusion and more clutter. Make sure that necessary directions are documented.

Remember when documenting various tasks make sure those tasks are refined and proven so that your business is running efficiently. Think split testing. Try performing the task one way. See how that works. If it doesn’t then go on to plan B. The point is you want to know what works and then utilize that strategy.

Mistake #5: Interaction with people

There may be times when certain processes of your business will need that human touch. For example let’s say you have a product that needs to be shipped a certain way. You need to document the specific details in order to make sure that the shipping and handling of your product is done in an efficient and thorough manner. You may also have to train people on how to handle customer service for that particular product.

When you have a team it’s extremely important that you train them properly so that they know what’s involved in the processes so that you have a well-oiled machine.

One of the best practices you can put into place is having an employee handbook which was mentioned earlier. This handbook will also contain procedures and policies that you expect to be followed. Having this in writing will help your employees to see in black and white what is required of them. Make sure they not only read the employee handbook but also sign off that they read, understand and agree with it.

Even if you decide to use a virtual assistant make sure you have it in writing what you expect of them. This will help with any type of confusion that may arise during a specific task you have assigned them.

If you are a solopreneur it’s important that you set guidelines for yourself as well. Having things written down and in an easy to follow format will help you be more efficient.

Once you know your business inside and out and it will be easier for you to write the employee book of policies and procedures mentioned above. If you do that in advance of hiring any team members you will be ahead of the game should your business experience a major growth spurt.

Put these systems into place and you will find your business is more productive.

Be Prepared – Ensure Your Business is in a Ready State to Advertise For Sale

If you have taken the decision to sell your business, you will no doubt have researched the internet for options on how to advertise your business. There are a large number of paid and free “businesses for sale” portals out there.

However, before you make that ultimate decision to advertise your business for sale, take a moment and ask yourself, is my business really in a ready state to advertise? Is it attractive to a potential buyer? Are my accounts in order? Would I invest in this business? If you have any doubts, no matter how small then take a few moments to consider the following points. They may save you months of heartache, disappointment and money:

1) Talk to the right people – firstly it is good idea to discuss your intentions with your accountant. Not only will this prepare them for any future discussions with potential buyers, they can also help advise on the best way to sell your business. Accountants are in the main very knowledgeable people who have numerous clients from all walks of life – they’ll know the true value of your business and it’s financial strengths and weaknesses. If you do not have an accountant then do yourself a favour – get one! I’ve lost count the number of times I’ve heard the expression “I can’t afford an accountant”. Absolute non-sense – my answer is “you can’t afford not to have one!”

Sadly many small business owners have the distorted impression that accountants cost a lot of money. A good, reputable accountant has one sole aim in mind – to save your business money and ensure you only pay what you have to. If they didn’t, they wouldn’t be in business very long. So many business owners try to take shortcuts by declaring and calculating their own accounts. Invariably, they end up paying far more than necessary. If you are selling a business, you need to ensure you get good financial advice to avoid paying over the odds when it comes to tax, capital gains and the valuation your business and its assets.

So get on the phone and call your accountant and get on the internet and find a good local professional. Most towns and cities have numerous accountants who charge very good rates.

2) Clean your act up – have you kept your business accounting books and tax records in order? If not, why not? A potential buyer wants to buy a business that has been well maintained. How does it look to a buyer if you haven’t looked after the most basic of necessities? It reflects badly on you and it will make any potential buyer nervous and skeptical. So before you even attempt to advertise your business, ensure all of your records are up-to-date, clear and transparent. Even better is to prepare summary figures to show profits and losses for at least three years and show sales patterns. In short, show that you know your business inside and out – it will illustrate a huge level of confidence that you have a complete understanding of your businesses operations, value and profitability.

3) Talk to an agent – by meeting with one or two agents, you get free impartial advice. Whether you decide to use an agent to sell your business is entirely your decision however, by talking to them for an initial consultation, you can get a greater understanding of how a buyer may see your business and it won’t cost you a thing. Agents are very knowledgeable people and have dealt with all kinds of businesses and all sizes of businesses. They will ask the questions that buyers will no doubt ask – if you trip up here, at least you have a second chance to get it right before you lose a potential buyer!

So get on the phone and talk to an agent. Ask them to visit your premises so that they can fully understand your business, what your operation does and why you want to sell. In most cases they will not charge you for an initial meeting and in many cases, will offer an initial valuation and feedback on whether they feel they can sell your business for you. Free advice is good advice so take it if you can.

4) Get the facts together – you’ll be amazed at just how many sellers are ill-prepared to sell their businesses and what little information they have ready for potential buyers. If you have access to a computer with word processing software, you can do yourself no harm by spending a few hours in putting together a business information pack. Inside this document you should include items such as a synopsis of the business, its history and its operations. Also include items such as the reasons for your sale, even if it is a little edited if you do not want to declare the full story. More importantly, you should list the details of the sale and what is included such as the assets, liabilities, property, goodwill and basic customer info (although do not include detailed names or companies).

Also take photographs and include these if they will help illustrate your products or services. Give as much information as you can within reason. Naturally, you need to be diligent and careful in what information you disclose to potential buyers as you do not want to jeopardize the value of your business as it presently stands but by going the extra mile and by preparing this document, you do yourself many favours. For example:

a) you show to any potential buyer that you have done your homework and run your business with efficiency and dedication
b) you’ll weed out the time wasters and prevent meetings or discussions with buyers who are simply window shopping
c) you’ll save yourself hours of discussions covering the same questions and answers, over and over again
d) the document can be used as a download on business for sale websites
e) the document can be used as a handout for meetings and is a great way to break the ice!

This little bit of preparation can go a long way. A few hours of your time could save months of waiting for a buyer.

5) Get a confidentiality agreement prepared – before you meet with anyone, get a non-disclosure agreement (also known as a confidentiality agreement) ready. They can be bought quite cheaply from bookstores in standard legal document packs or online for a few pennies. Potential buyers will ask all kinds of insightful questions regarding sales figure, profits, losses, suppliers and your customer base. Think first about protecting your operation – get a document ready and do not disclose anything to anyone until they sign and complete one.

6) Get a lawyer – just like an accountant, start speaking to lawyers and let them know of your intentions. Selling a business isn’t cheap and lawyers don’t come cheap either! Rates can vary greatly dependent on their level of experience, size of company and location. If you can agree to a fixed or capped fee then you could be onto a good thing. In the legal arena time really does mean money so ensure that you know what you will be expected to pay when you use their services. Very rarely does a business get sold without the use of lawyers or solicitors so if you can strike up a good relationship with one beforehand, it will help you a great deal. Legal costs can be very high so make sure you are prepared for the expense when you calculate the value and price at which you want to advertise your business at.

7) Look Smart – whether you own a shop or store, manufacturing business, a service agency or anything for that matter, make sure you keep your image clean and tidy. When your business goes on the market, you will start to get enquiries. It’s not uncommon for prospective buyers to pay an unscheduled sneaky look at the business so clean the place up and make it look pristine as you never know who may walk through the doors next. A clean business is an attractive business.

If you have now ticked all of the boxes above then great, you’re most likely ready to get advertising your business for sale. Good luck and don’t forget to read my other blogs on ways to buy and sell businesses successfully!