How does a business consultant help you? [Hint: It’s not what you might think]
Photographer David Travis
The dictionary might describe a small business consultant as one who works on planning, problem solving and gives advice to improve an organization’s performance. My description is someone that becomes a trusted advisor by teaching business principles to help you gain clarity over the business direction and the expected financial result.
Clarity is an important word in small business. By its nature, things are messy:
- Family members in the business
- Technical knowledge but not business knowledge
- Low level of comfort with finances
- Expectation that everyone will work as hard as you
The right consultant guides the creation of a plan, helps you to implement the plan and manage change — by providing guidance in having those difficult conversations with those closest to you in the business.
A Skilled Consultant Brings Clarity to Your Business
If you are going to grow your business and attract quality clients, having a clear understanding of what's going on inside your business is essential.
An owner feels clarity in three ways:
- The business has a clear direction.
- People are held accountable to move in that direction.
- The direction makes financial sense.
Without these three things, a business may "survive" but it won't thrive.
Solid Business Plans Provide Direction
The most overused word in business is “strategy”. Every decision today is apparently strategic. What small business owners need is a plan; something that describes where the business is going and how to get there.
It doesn’t take 3 days at the mountain retreat to create the plan — I have facilitated nearly 100 effective plans in a day. It's not about the time you put in. It's about knowing the right questions to ask that will help to not only clearly define your business goals, but also ensure you have actionable and measurable steps to get there.
Those plans bring clarity.
Gain Clarity Through Accountability
Right behind financial acumen, not holding people accountable ranks second in preventing clarity for the small business.
A plan is an important start so that you can identify the gap between today’s effort and what is required for the future. Improving accountability is likely a culture change for most, so tying it to the business plan is an effective way to start.
The 100 or so plans that I have created bring the employees into the process and identify their own priorities within the plan. It’s a much easier conversation to hold someone accountable for their own idea than something forced on them.
Clarity for your employee is clarity for you.
A Clear Grasp of Cash Flow is Critical for Decision Making
All of this must be done with an eye on the finances, especially cash flow.
In most cases, diligently updating a rolling cash flow forecast can become one of the most important tools in the business. The cash flow forecast is indispensable when cash is tight, but also forces you to look ahead and see the cash impact of decisions.
Let’s assume that your last quarter was off-the-charts strong, so you want to hire more salespeople. First, we need to know the time it will take for a typical salesperson to bring in more cash than goes out in salary and benefits. This analysis will get you focused on the additional sales required for this investment to make sense.
Clarity of financial impact makes for better decisions.
Dozens of small business owners have told me that they know things need to change — but they can’t describe what should change. Owners often want prescriptive solutions for poorly defined problems.
How Do You Choose a Business Consultant?
My first piece of advice for choosing the best business consultant is to watch out for ones who offer quick fixes. Be careful of those consultants who offer simple suggestions such as:
- “You need a strategy”
- “You need written policies and procedures”
- “You need a better sales force”
- “You need… whatever I’ve already done in my career”
You aren’t hiring experience alone, but the ability to take that experience and customize it to you and your business. That tailor-made advice only goes so far; it must be implemented.
Just as you like to think of your business as a family, or at least a close-knit group of people, make sure the person you allow into your group wants to help everyone implement the advice.
Dozens of small business owners have told me that they know things need to change — but they can’t describe what should change. Owners often want prescriptive solutions for poorly defined problems.
The skilled consultant unpacks the issues, gets to the root cause and delivers an answer. The especially skilled consultant works within the company to identify solutions and establish ownership to implement the solutions that make financial sense.
That is the work of a trusted advisor — working to improve the company, not just the owner.
Hire a Business Consultant You Can Trust as Your Advisor
I have been there as a management consultant, the President/CEO that hired consultants and the CFO that fired consultants. Through my decades of experience, I have learned that understanding the gestalt of the consulting relationship ensures its success.
As a Fractional CFO Plus, I provide business consultancy services that are custom tailored to your needs. There are no cookie-cutter solutions; instead we start by looking at your business and identifying the things that will bring you clarity — both in where you are now, and where you want your business to be in the future.
Ready for a consultation? Have a question?
