Beware of Consultants

I have met many business owners who are very leery of consultants. Although, I am a management consultant, I can’t say I blame them. In meeting with these businesses I have learned of numerous consultants who have requested large sums of money and promised them something that they either could not do or did a very poor job doing. I have met other consultants on team projects who had no education or experience in business management whatsoever but who advised a mutual client.

Recently, one woman was a former school teacher and was advising a client on how to structure her business. Yes, a school teacher not a lawyer, not a CPA or even a business manager. At our first meeting I immediately noticed the business was structured incorrectly. She had advised the client to form two businesses instead of one and filed her paperwork in December which meant the client had to pay personal property taxes for that entire year when she could have waited until January.

I met another consultant who told a client she had a 100% success rate with grant writing. She wanted to charge the client $10,000 to write a grant within two weeks. She asked me to write the grant. After doing some background research on the client, I realized this client was owned by a large publicly traded company and didn’t even qualify for the grants the consultant was presenting to them. All she could see was the money.

Another guy was set on paying his bills and just started company after company and claimed to be a marketing genius, his background was in civil engineering and he had no proven track record of success other than his own company which was successful during the real estate boom like many others. He wanted to charge 30% of gross revenue to provide sales and marketing.

My point is there are a lot of fast talkers out here. Don’t believe consultants can do a job just because they say they can. Here are some tips for vetting consultants:

1)      Ask for work samples. If you are getting someone to do work for you writing grants, get a writing sample and also a list of grant applications they have submitted and won.

2)      Ask for references. If he or she is a good consultant, asking for three references should never be an issue.

3)      Ask for resumes. Even if the person owns their own company, they should have a resume which will include previous employment and their education. If their previous employment or education do not match the services they are currently providing definitely be sure to get those items mentioned in number one and two or find a new consultant.

When starting out it is going to be hard to pay expensive consulting fees. If it’s not within your budget, don’t do it or find an experience consultant that will work within your budget. Don’t go out of business trying to pay these consultants. Worthy consultants will not pressure you to spend money you don’t have in your business for their services.

Do your due diligence when it comes to consultants, it will save you money and possibly from a headache!

Get It In Writing

Although I have the background and education in business management I still sometimes have to remind myself to always follow my established procedures, no matter the client.

I have many clients, some which I maintain a strictly professional relationship with and other who I have also built somewhat of a personal relationship with. Sometimes when you work closely with others you will not only hear about their business issues but their personal issues as well. I am a great listener, which is probably why I am great at selling, and I can be a big softy sometimes. However, in business there is no room for softies!

You may make friends while doing business but always remember to remain professional when it comes to transactions.  Always make sure that expectations are understood before any work is performed and put it in writing. Always have contracts for services and always make sure their is an exchange of funds.I have learned to never barter for services and here is why:

Let's say you perform 20 hours of work for someone and you typically charge $50 per hour for your services. This will amount to $1,000. Your client tells you that he or she knows you need some computers for your business and you can have some they no longer need in exchange for your services. There may not be anything wrong with this scenario if the computers are newer and up to date but what if they're not. If they are older, don't have WiFi capability, you may be able to get three of these computers for under $300. My point is you may not see the same value in what they are offering as they do. 

If you are exchanging your services for the services of another, the same sort of problem can occur. Maybe their website design will usually bring in $1,200 but the consulting you are performing for him or her only $600. 

It is always best to operate under contracts, spell out your services, and exchange funds to avoid misunderstandings and preserve your business relationships. If it ends up being a wash, let it be a wash but follow your established procedures in your business transactions...no matter the client.

What NOT to do

Just got off the phone with a client. She is experienced in business but just starting a non-profit. She said people are giving her a headache by getting way ahead of themselves with planning multiple locations, giving her their salary expectations, and trying to charge her for things that she is not ready to spend money on yet. She is just getting started with her business plan. I am so glad she realizes this is NOT how you start. You have to define roles and set expectations. You cannot let just anyone drive that bus because believe me they will put you in a ditch!

Management: A Horror Story

While waiting in line at a sandwich shop, I overheard a conversation in the dining area between a manager and a worker. The conversation went something like this:

Manager: Why would you do that!? What makes you think you could do that!?

Worker: *Holds head down*

Manager: If I ask you something you just need to tell me!

The manager then dismisses the girl, who appeared to be a just teenager. In the dining area seated across from the manager was who appeared to be the district manager. After the young girl walked away, the manager tells district manager the last time she had an exchange with the girl she was in tears and the manager chuckles. The district manager said nothing to the manager about her behavior. The workers behind the counter seemed disgusted, glared at the manager while shaking their heads, and one of them left to check on the young girl.

Any management specialist would find several things wrong with story, along with most decent human beings. Here are the obvious:

• ·         Never speak to your workers about an issue in front of your customers
• ·         If avoidable, do not speak to your workers in front of other workers about their performance
• ·         Making a worker cry isn’t something to boast about, it’s actually shameful
• ·         Teenage workers need special care. They are new to the working environment and hormonal!

Needless to say, this manager and district manager need further management training. The chain may need to revamp their current training curriculum. The way they manage will not lead to a positive working environment and will lead to a high turnover ratio.

Watching this exchange reminded me of the many poor management experiences I have had throughout my career. From the manager who sabotages to protect her job, to the drunk that everyone is afraid to even speak to some days, to the manager that has exempt status who comes in at 10 a.m. goes to lunch and leaves at 2 p.m. What many companies don't realize is just because someone is a good worker doesn't automatically translate to a good manager. Being a good manager takes special training, not just in the companies services or products but also how to motivate different personality types and get the best out of your workers everyday.

I know I have many more horror stories but I'd like to read about yours. Please share your management horror story with us in by commenting below.

A New Era?

What do you think will be the name for this period in our history?

I have found myself wondering what we will end up calling this period in U.S. history? I have always been interested in history, especially U.S. History. As a country we have gone through many periods, ages, and eras; the Colonial Era, Age of Exploration and Expansion, Civil War Era, Age of Industrialization, and The Civil Rights Era to name a few.

I know that things have been very tough economically for many, there has been a lot of deregulation by the government, we have experienced a housing crisis, children and young adults have a sense of entitlement (or as I call it, everything is about ME), gay marriage and marijuana are legal in some states, and everyone is engaged with social media. As history has demonstrated time and time again, we will come out of the economic crisis and the things we complain about socially will become the norm.

So, tell me what you think are some names historians will come up with to describe this time in history? Also, let me know anything you think should be included in this era that I’ve missed!

Not so Fast...

Want to start your own business?

 

As a business management consultant, I get lots of calls from people who want to start their own business. The conversation usually starts with, “I want to form a non-profit to empower women”, “I want to open a restaurant, everyone loves my cooking”, or “I have a product I want to make and sell.” Many people have a dream of doing something other than their 9 to 5 for a living. The question you need to ask yourself, do I really want to do this for a living? Sure, baking cakes and cooking for your extended family can be fun but do you really want to turn this into a business. Being a business owner is much different from being a baker or cook. It will take many hours beyond baking that cake or making that meal. When contemplating starting a small business ask yourself the following:

Do I want to be a business owner or do I just enjoy performing this task?

Do I want to job in this field or possibly be a volunteer?

Am I willing to spend the time gaining the knowledge to turn what I love into a SUCCESSFUL business?

There are many perks to owning your own business like not having to worry about set hours, sick leave, building up vacation hours, and commuting, not to mention the unlimited earning potential. The truth is, it is hard work and most businesses will fail. You have to be willing to accept the failures in the beginning and keep pushing. You have to be able and willing to take a loss to start, stay focused, to spend 60 + hours per week if necessary.

If you still think you’re ready, here are a few things to start with:

Start-Up Capital – If you are selling a product, you will definitely need it! For some services, you may simply need an internet connection, computer, and printer to get started.

Reduce Your Expenses – If you’ve decided to quit your full-time job to start your business, you will want to cut expenses wherever you can. You may want to get a roommate, maybe get rid of your cable expense, or turn your heat down and wear a sweater. You need to reduce your expenses to be prepared for those rough months and also to be able to put more money into things which will increase your business activity.

Naming your business – Develop a name that is unique but not so unique that people don’t know what it is that you are selling. If you have a unique name, be sure to include a tag line that describes your product exactly. Don’t let the name you choose limit you unless you are selling something specific. For example, a name like “Christian Electronics Repair” or “Chocolate Studios” may limit you to serving only those of a certain religion or race when you are capable of providing this service to anyone. You don’t want to limit your income opportunities or offend anyone. Send the name out to your friends and family for opinions and a vote. Register your trade name with your state.

Legal Business Formation – Do you want your business to be a sole proprietorship, a limited liability company, or a corporation? Legalzoom.com can help you with this task for very little or you can go to your state’s website for creating a business.

Logo - In the beginning, to save a few dollars, you may want try fiverr.com to obtain a logo or a similar site of independent contractors that can give you some inexpensive logos. You can always change your logo later.

A Business Plan – Your business plan will include a description of your services or products, key personnel, product prices, marketing, and a three to four year plan. I recommend using a service like www.liveplans.com. It will take you through each step and even provide you with examples for each section.

Don’t Go Overboard – Start small. Don’t go and rent office space, buy tons of equipment, or pay consultants high fees to get you started.

STAY MOTIVATED – Surround yourself with like-minded people. Find other successful business owners in your field through networking groups. Join meetup.com to find some local area meetings, go to your local small business development center for information on free classes to improve your business, and join social media groups where you can ask questions or find helpful articles.

Of course there is much more to running a small business than these few beginning steps but if you can make it through these…you’re on your way!