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Small Business Consulting

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Small Business Consulting

 

 

 

SMSI works with our clients on strategy, planning and problem solving, and advice to develop business skills, knowledge and make their business more efficient. These topics range from designing a business model or marketing plan, to determine which marketing techniques to use and how to use them more efficiently.

 

 

 

 

 

Business Consultants costs per hour

Learn about common cost factors to budget your hiring on the world's work marketplace.

 

 

How much does it cost to hire a business consultant?

Running your own business is a complicated endeavor, but one feature business founders share is that they often enjoy taking on many different roles and tasks. This is a great quality and one that’s important in the very early days of any company. But as you begin to scale up, your time becomes more valuable, and you might find yourself considering bringing on a small business consultant a few times or on a regular basis.

Small business consulting is a broad term that captures many different skill sets. It can include accountants and bookkeepers, marketing strategists, security experts, database administrators, human resource managers, and more. Basically, anyone who knows how to set up and run a basic business system could have expertise you’d want to draw on.

 

Figure out what kind of business consultant you need

As you begin to scale your business, there’s likely to be a number of areas where you could use some outside expertise. The key is to figure out which areas fall under your core competencies and which ones are better left to an expert. Here are some common areas where growing business owners turn to consultants:

 

  • Marketing. It’s sometimes said that a good product sells itself but in reality even great products need help finding their audience. A marketing consultant can help you identify your target market and develop a strategy for reaching it. If you’re considering bringing on a marketing expert, you should make sure they have experience in your particular industry as marketing tactics and best practices can vary widely between industries. A digital marketing strategist with consumer tech background is going to bring different skills to the table than someone with a background in B2B sales and traditional media.

 

  • Accounting and bookkeeping. It’s common for growing business owners to handle their own books at the outset, but as your company grows this can become both a major time suck and potential liability. That’s why freelance accountants and bookkeepers are some of the most common small business consultants. These professionals can help set up scalable invoicing and payment systems, get your books in order, and help you prepare for taxes.

 

  • HR. Similar to accounting, HR often gets folded into the owner’s responsibilities. But as your business grows, you’re going to want to create more formal HR structures. An HR consultant can help advise you on how to set up those structures to make sure benefits are properly administered and to help mediate and address issues that may arise between team members. These things may not seem like problems right now, but the point of a good HR expert is to make sure they don’t become problems in the future.

 

  • IT and security. As a growing business, you may not think you’re vulnerable to outside attacks, but you’d be wrong. In fact, hackers often specifically target SMBs because they’re less likely to have solid security protocols in place and are more likely to pay ransom demands. At the same time, SMBs can often act as backdoors to get into the systems of larger enterprises that they contract with. To avoid this kind of situation, it may be a good idea to consult an IT security expert to make sure your systems are safe and scalable.

 

Ask the right questions before you hire

The more information you have at the outset, the more likely you are to find the right kind of expertise. Many business owners know vaguely that they need help in a particular area, but they don’t know enough to know exactly what their challenges are. Sure, a good consultant might help you identify those areas, but you can often save time and money by doing a little research beforehand.

Once you know what area you’re looking for help in, ask yourself what particular projects you need help with. For instance, do you need help planning a marketing push around your first big product launch? Do you need someone to get your server set up and secured? Do you need help just getting your receipts in order? The more specific you can be here, the better.

After that, ask yourself how much time you expect your project to take. Do you need someone to come in and devote a lot of time for a few weeks to get some major initiative off the ground, or are you looking for someone you can call upon semi-regularly? Again, your overall business goals should help guide you through these questions.

Because small business consulting encompasses so many different fields and skill sets, exact costs are going to vary depending on what skills you’re talking about. On top of that, you should also expect consultants with more experience to charge substantially more than someone who’s just starting out. Here at SMSI, freelance startup consultants charge rates that can range from $50 to $150 an hour. In general, marketing consultants tend to charge somewhat less, while freelancers with expertise in security and finance tend to charge somewhat more. That said, it may make more sense to negotiate a fixed project fee based on the scope of your project.

 

-  Contact us and ask about fixed project fees  -

 

Below we’ve put together a table with some relevant skills and hourly rates charged by some small business consultants*.

Type of Consulting Relevant Skills Average Hourly Rate
Marketing Digital marketing, campaign planning, market research, Advertising $45-160
Accounting and Bookkeeping Auditing, accounts payable and receivable, tax preparation $50-150
HR Management Administering benefits, mediating disputes $55-220
IT Security Establishing security protocols, penetration testing $60-190

*Reflect rates charged by freelancers in North America with over 1,000 hours and 90% success rate.

 

 

 

Hiring a consultant can help businesses improve performance and make necessary changes to achieve success.

 

 

  • Business consultants help companies overcome challenges, increase revenue or grow.
  • It's important to ensure business consultants have experience and previous success with companies like yours.
  • Business consultants may charge by the project or the hour, or require daily or monthly retainers.

Business consultants provide management consulting to help organizations improve their performance and efficiency. These professionals analyze businesses and create solutions while also helping companies meet their goals. Business owners should consider hiring business consultants when they need help or perspective on their chosen path or a catalyst for change in their companies.

 

What does a consultant do?

There are several reasons business owners should consider hiring consultants. Consultants offer a wide range of services, including the following:

 

  • Providing expertise in a specific market
  • Identifying problems
  • Supplementing existing staff
  • Initiating change
  • Providing objectivity
  • Teaching and training employees
  • Doing the "dirty work," like eliminating staff
  • Reviving an organization
  • Creating a new business
  • Influencing other people, such as lobbyists

 

The first step for any business consultant is the discovery phase, where the goal is to learn the client's business. A good business consultant takes the time to learn as much as possible about the business from the owner and employees. This can include touring the facility, meeting with the board of directors and employees, analyzing the finances and reading all company materials. During this process, the business consultant will uncover the details of a company's mission and what operations are in place.

 

Once the business consultant has developed an in-depth understanding of the company, they enter the evaluation phase, where the goal is to identify where change is needed. This phase includes identifying the company's strengths and weaknesses, as well as current and foreseeable problems. These issues can include problems that ownership and management have already identified, as well as new problems the business consultant discovers as a result of their objectivity. A business consultant should also identify opportunities to grow the business, increase profits and boost efficiency.

 

In addition to identifying these problems and opportunities, a business consultant should develop solutions to problems and plans for capitalizing on opportunities. Perhaps a company has a particularly strong sales department but a weak marketing department. This is an opportunity for the company to increase marketing resources and capitalize on the sales staff. During this phase, it's important for the consultant and the company's employees to maintain open, clear communications.

 

Constructive criticism

It's important for a business owner to take the business consultant's advice at this stage as constructive criticism. The owner should not take this criticism personally, as the business consultant brings objectivity and a fresh viewpoint. The owner may be personally close to the business, which can be an obstacle to positive change and growth. The owner should have feedback and provide opinions to the business consultant, which the business owner should consider and revise plans as necessary.

 

Once the owner and the consultant agree on a plan, the consultant should enter the third phase of consulting. This is the restructuring phase, or the implementation of the plan. In this phase, the consultant builds on assets and eliminates liabilities. They also monitor the plan's progress and adjust it as needed.

 

How to find a business consultant

Finding the right business consultant may be the most difficult part for the owner or management. The consultant should have a passion for their work, a drive for excellence and an eye for organization and detail. It's important to find a consultant who has expertise in your industry or experience with the kinds of problems your business faces. Also, make sure they have solid referrals.

 

In addition, ensure the business consultant has any necessary certifications that are relevant to your industry. You should vet the consultant through their website and materials. Look for professional images and well-documented information about their services and thoroughly review contracts and consultancy fees. It's a good idea to request examples of past successes and to speak to those businesses.

 

What is the typical background for a consultant?

The right background for the consultant you choose depends on your industry and needs. The U.S. Bureau of Labor Statistics notes that consultants can be management (business), scientific or technical. If you want someone to help your company develop new proprietary software or computer-based workflow, you may want to engage a technical consultant. Outside of specific needs, companies usually work with management consultants when they want to improve their bottom line, customer satisfaction or employee morale.

 

Regardless of the type of consultant you work with, their background is critical. It helps you understand how likely they are to improve your business. Here's what to consider when reviewing potential consultants:

 

  • Do they have hands-on experience? This can be especially important in the business world. If someone came directly out of college labeling themselves as a consultant, do they really know anything more than you do? Consider looking for consultants who have successfully owned or run small businesses, enterprise organizations or specific departments.

  • Is their experience applicable? A former bank CEO may seem impressive, but do they have the knowledge and experience to turn your cupcakery into a profitable small business? They might, but if you're also considering a former restaurant owner who now makes a living successfully helping small eateries grow, this consultant may be a better match for your business. Look for consultants who have worked in your industry and with businesses that match yours in style, size, needs and goals.

  • What's their track record with consulting? You don't just want a consultant who has the right experience; you want a consultant who has demonstrated success with companies like yours. Ask for a portfolio or list of brands the consultant has worked for, and request references. Look for a consultant who has helped businesses overcome the types of challenges you're facing or who has grown businesses very similar to yours, and reach out to those companies to find out if they were satisfied with the services.

 

Business consultant FAQS

How much do business consultants charge?

According to the Bureau of Labor Statistics, management consultants make an average of $150,000 per year (or $62.93 per hour). But that's what the person "takes home" as income, and consulting charges are typically higher to cover business expenses. Consultants don't always charge by the hour. According to a consultant fee study by Consulting Success, these are some popular fee methods and the percentages of consultants who favor them:

 

  • Per project – 34.2%
  • Hourly – 27.3%
  • Monthly retainer – 15.1%
  • Daily rate – 14.1%
  • Other – 9.3%

 

According to the study, 43% of consultants earn up to $5,000 per project, though some make more than $100,000 per project. Obviously, the size, scope and length of the project determine the cost.

 

Business consultants are a considerable expense, but their feedback and planning can help you increase business and boost profits while eliminating problems and identifying opportunities to ensure future success.

 

How do you measure the ROI of a business consultant?

You measure ROI by looking at certain key metrics to determine the worth of the consultancy services. Most companies look at their net profits in the quarter before they hired the business consultant, then evaluate their net profits in the next quarter or two after they implement the consultant's recommendations. You should deduct the cost of the consultancy before calculating the ROI.

 

Considering return on investment is an important part of hiring a business consultant. If you're paying a business consultant upward of $5,000, you certainly want to see an established ROI after the project. Established business consultants should be able to show their former ROI data to prospective clients. According to the Predictive Index, 27% of surveyed businesses chose not to hire a consultant because the consultant could not demonstrate ROI. This is the most frequent reason for companies not using consultancy services, and it falls on the consultant to use big data to demonstrate past ROI.

 

How do you know when to hire a business consultant?

Business consultants don't come in one size that fits all. You will need to evaluate your company in these key areas:

 

  • Human resources
  • Business strategy
  • Operations
  • Compliance and regulations
  • Financial planning

 

If your business struggles in any of these areas, then it's a good idea to seek out a business consultant. Keep in mind that business consultants specialize in particular business areas, so you should seek out a verified expert in the field. For example, don't hire an operations specialist if you need the most help with financial planning.

 

If you note any declines in profits that you can't explain, this could be another sign that it's time to hire a business consultant, who can pinpoint potential reasons for the decrease and ways to remedy them.

 

 

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