Consultants are a great way for entrepreneurs to get outside, independent help with various aspects of their business. As entrepreneur Corey Shader explains, though, making a poor hire when it comes to consultants can have significant negative effects on the business.
Entrepreneurs need to properly vet consultants, even more so than they would when recruiting new employees. If an entrepreneur makes a poor consultant hire, it can lead to poor choices being made and, ultimately, harm to the startup.
Here are four mistakes entrepreneurs need to avoid when hiring consultants.
1. Hiring a Generic Consultant
Consultants come in all shapes and sizes. Some have specific strengths that they focus on — such as finances, leadership or inventory — while others operate more like a one-stop shop.
No matter what you are hiring a consultant for, you should look for one who has specific industry knowledge they can apply to your business. What works for a business in your industry probably won’t be a perfect fit for another business in another industry.
Entrepreneurs should always look to hire consultants that have specific knowledge about the industry in which their business operates, so they can come up with customized solutions.
2. Skimping on Costs
Consultants can be very expensive, but there’s a reason for that. A good consultant can do wonders for a business, and provide exponential returns on the investment.
Cheaper consultants may seem enticing for the savings they provide, but they can do much more damage than they can good. There are plenty of areas in business where you can reduce expenses or even opt for the “bottom basement” option.
Consultants simply do not fit into that category. While you should, of course, shop around for the best price, avoid hiring a consultant simply because they are cheaper than someone else.
3. Not Setting Objectives
Before you hire a consultant, you should have clear goals and objectives in mind. To do this, ask yourself the following questions …
What problem are you facing? What have you tried that hasn’t worked yet? What do you want to get out of the relationship with the consultant?
Consultants can help you with a number of things, but they are much more successful if they can understand the problems you are facing and what specifically you would like help with.
By setting clear objectives at the outset of the relationship, you’ll also be providing yourself with a way to measure the success of the consultant and hold them accountable.
4. Not Being Willing to Change
Consultants are brought in to help entrepreneurs effect change. As Corey Shader explains, they cannot be successful in their job if you are not ready to make a change — even if that change may seem dramatic.
If everything was going well, you may not have the need for an outside consultant. The fact that you are in the market for one, though, likely means there’s a challenge you’re facing that could require a change in approach.
Even if you’re bringing on a consultant to do a general audit of your business, though, you should be open to the idea that significant change is needed. Embrace the suggestions and be ready to change if the situation calls for it.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies, notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span across the nation, consulting for start-ups, and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.