This is one of those terms that’s more slippery than it looks, mainly because there seems to be some confusion between a consultant, a freelance contractor, a startup coach, and a mentor. If you’re talking generally, all of those categories could fall under the umbrella of “startup consultant,” because they’re outsiders coming in and helping with the company. But for the sake of this article, let’s all agree to the following definitions:
A startup consultant is someone who is brought in to a startup on a short term basis to help move a specific aspect of the company forward. They are not a part of the team, but rather an outside perspective whose expertise is earned and valuable. Because of that expertise, they’re generally compensated well.
A freelance contractor is someone who is brought on to be part of the team, usually in a specific role. They are generally compensated less than consultants. They are generally more involved in the day-to-day operation of a startup than is a startup consultant.
A startup mentor or coach is someone who helps guide founders in their startup journey. They usually have less time to commit than a consultant or freelance contractor, because they’re not compensated and have their own businesses to attend to. They are valued for their expertise and knowledge but a mentor position also includes a certain level of personal caring that the other two might not.
There will be a time when you and your business will face the need for outside consulting and help. It might be market information you need, or advice, skills, strategies and techniques that don’t exist in your organisation. Consultants can provide solutions for a huge range of business issues. Different types of consultants bring different ideas to the table but you need to know when and why to use them.
In general, a business consultant works with you on strategy, planning and problem-solving. They might help you develop a business skill and grow knowledge. You might need to learn how to design a business model, create a marketing plan or determine which marketing techniques you need to use and how to use them.
Consultants Fall Into Five Categories.
1. Strategy and Management Consultants
These firms or individuals will have a deep understanding of your specific market and know best practices of your industry. They can offer help in enlarging your market footprint, expand your product offerings, help you reorganize for efficiency and cost savings, increase your company’s capabilities or help you make a large equipment purchase or even buyout another company.
2. Operations Consultants
These companies focus on increasing your process quality and efficiencies. You might use them when you are looking to map out existing processes, analyze them and get suggestions/advice to improve quality, reduce steps or mistakes and increase margins and decrease costs.
3. IT Consultants
Probably the biggest growth area in consulting right now. With the rapid pace of technology and tech support needed, most companies have hired a consultant at some point to help integrate and improve their computer or phone systems or storage space, upgrade servers, etc.
4. Human Resources Consultants
These businesses are used to work specifically on employee needs. You might use them to recruit top talent, improve employee retention and determine compensation to align with your company goals. You might use them for leadership and communication development.
5. Sales & Marketing Consultants
Firms in this area are used to create marketing plans, work on positioning statements, develop a brand, launch advertising campaigns, establish social media strategies, initiate sales process and improvement, or design sales training and coaching.
So why would you ever hire someone from one of these categories?
Seasoned change agent: Navigating office politics and taking the blame for reducing headcount or other cost-cutting measures, consultants are change agent experts and can act as that outside voice to break up the roadblocks and make things happen.
Process improvement: Your consultant will be an expert or even a leading expert in their field and have years of experience in what you are attempting to solve for the first time. Why try to invent a best practice when a consultant has probably already implemented it multiple times?
Idea generator: A consultant can bring a fresh perspective to your business that you might not have. They can see the bigger picture of the market and where your company fits into it by being an outsider. The insights they have can boost your internal team to new ways of thinking and approaching problems.
Trainer: By the nature of the job a consultant does, they are natural trainers. Their job is to share their knowledge, insight, and experience. They would be a good choice to do a training course, presentation or do one-on-one or team coaching.
Consultants are a good resource but one of the biggest drawbacks can be making sure the use of one results in actionable, observable outcomes that you can clearly see impact your profits and bottom line.
Too many times a consultant might give you a strategy and blueprint on how to make it happen but there is no follow through on making sure it’s implemented, followed and that results are tracked. This isn’t necessarily the consultant’s fault. They may have been hired to only do the setup and certain tasks. Consulting can also be very expensive and take a long time. Large companies can spend hundreds of thousands of dollars and have nothing to show for it after nearly a year.
Craig Morfett can help to guide you through many of these categories by utilising our client base and stream of connections at a much lower cost, we would never dream of not helping one implement the changes or strategies provided. We can provide testimonials & proven examples of our consultancy services that have made more money for our clients time & time again.