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!