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.