When Is It The Right Time To Hire A Business Consultant?
Let’s face it, starting a business involves risk. There’s no way around it. The decisions an entrepreneur must make in the first weeks and months of a business can be traumatic – especially if the results prove costly.
In many cases a small business owner has “fairly academic” decisions to make; that is, these judgment calls fall into the category of routine or no-brainers. For example, if you are going to run a gas station you will need fuel to offer before you’ll have customers. But there are other decisions that require more work, mentally, to ensure you don’t flush thousands of dollars down the proverbial toilet.
It’s those kinds of decisions which call for some outside expertise. Here’s a case-in-point: Let’s say you want to open an auto parts shop in an area that already has two of the three major chains that sell car/truck parts in your state. You find out these two chains account for 96 percent of all auto parts purchased in this geographic market. Furthermore, you learn that demand for auto parts is less than three other comparably sized towns in your part of the state. Then, as you tally the costs for your starting inventory list, you realize it would be super easy to order too much of a low-profit item and too little of a large-margin product. In short, chances for some poor decision-making are staring at you straight in the face, and right off the bat. No one ever told you starting a business would be easy.
You realize that if you consult one of your competitors, he or she will have a vested interest in giving you misleading information. After all, you represent the competition. So that’s not wise. And here are other factors entering your mind: the real demand for some of your products, the correct pricing strategies so you can compete with the older, established stores, and let’s revisit the first concern – how much of each item should I invest in when I open my store? You also need to consider how much profit -figured out by how many products you anticipate selling -will it take to cover all your overhead costs. Fortunately, there’s expertise available in almost any industry to help you figure all this out.
For such a person and considering the stage of business he is in (launch), it’s probably a good time to hire a small business consultant!
Here are some hints that you may need a small business consultant or coach when…
- You face daunting inventory decisions, much like the example given above.
- You have a terrific product or service but you’re not sure how to get your message across to your target market.
- The type of product you’re offering needs to appeal to a ‘niche’ need or taste. Hence, you need expertise to help you fine-tune/alter the product offering to meet those tastes and needs.
- The demand for your kind of product or service seems questionable. An expert might be able to help you change, switch or improve your proposition to create more demand for it.
- Your costs versus what you expect to take in (income) is tough to figure out. You may need someone with accounting experience to help you lay out your costs versus revenues equations. In this case, a person with experience in starting up a business, who has learned many lessons with money, can better help you navigate these decisions.
- The very need for your product or service is uncertain, based on your research. In other words, you may want to hire an expert to size up the market, consider all factors, before you get too much into your startup idea.
Certainly, there are many more factors that could be considered. But these are the most common reasons for an entrepreneur or small business owner to go and find outside help from a business consultant.