Business Consulting Explained
How it can help and hinder your business growth
Running a business can be an all-consuming occupation, where it's difficult to find the time to learn everything you need to know and develop improvement plans.
As Michael E. Gerber describes in one of our favourite books, The E-Myth Revisited, most Business Owners work in their business, rather than on it.
This is where a Business Consultant can help, although they are not all created equal, and are not always worth the investment. This article will help you to understand what a Business Consultant is, how they can help, how they can hinder, and what to look for in a good one.
Definition: Business Consultant
A Business Consultant (from Latin consultare, "to discuss") is a professional who provides professional or expert advice in a particular area of business or general business operations.
A consultant is usually an expert or a professional in a specific field and has a wide area of knowledge in a specific subject. Consultants can save their clients time, increase revenue, and maintain resources.
The overall impact of a consultant is that clients have access to deeper levels of expertise than would be feasible for them to retain in-house, and may purchase only as much service from the outside consultant as desired.
Definition adapted from Wikipedia.
How traditional Business Consulting works
Phase 1. Client Onboarding
The Client Onboarding process is where a Consultant finds a suitable client, who needs the type of consulting service on offer. They clearly define the scope of the work and sign an agreement with the Business to commence with the project.
Phase 2. Investigate and Research
During the second phase of the traditional process, the consultant will perform an investigation and analysis. This can be internal, assessing the current state of the business, external, assessing economic, environmental and competitive factors, or a combination of the two.
Armed with a clear understanding of the situation, the consultant will then research ideas and solutions to better the business, in line with the project's scope as defined in the first phase.
Phase 3. Deliverable
Once the consultant is ready to propose a solution (or a range of solutions) they will complete a deliverable. This is usually a plan in the form of a document or presentation, with detail on the steps to execute.
After this is handed over or presented, the typical consulting relationship will end, although some consultants offer various ongoing support packages and follow-up plans.
In Harvard Business Review's 1982 article: Consulting Is More Than Giving Advice, we are presented with a Hierarchy of Consulting Purposes (see image above). Read from bottom to top, this is the regular process of a consultant. We have found most consultants to deliver a service based around stages 1-4, with few delivering on stages 5-8. We have observed this to be a major disadvantage of regular Business Consulting.
What works about Business Consulting?
The expertise and investigation of a traditional Business Consultant can arm you with a plan to improve a business or a specific element of it.
Understanding of specific challenges
A good consultant will clearly identify the current and any possible future challenges a business is facing. This will typically identify weaknesses and threats the business should be aware of in order to protect itself and improve.
Expert advice
For a Business Owner to succeed, they need to manage a wide range of business strategies and ongoing operations. This limits their focus, so bringing in specialist advisors and consultants will fast-track growth and help avoid common pitfalls.
A clear plan
The deliverable will provide a clear recommendation, or range of recommendations, based on the solid research and analysis that has been completed. This plan will give the business solutions to challenges and a direction to head.
Detailed steps to execute
Alongside the plan, a top consultant will also provide a guide or roadmap to implementing the plan. These are small steps that will bring the plan to reality.
Where does Business Consulting fail?
The traditional Business Consulting process does suffer some issues. We believe this old-school-corporate-America approach isn't a great fit for most New Zealand organisations.
Not a Kiwi approach
We don't believe that this dictatorial approach works particularly well for hands-on New Zealand Business owners. Traditional consulting is centred on the consultant finding the problems and delivering solutions. Our business community prefers a more collaborative approach, where the Business Owner (and their team) can have significant input into improving their business.
Failure to implement
This is the biggest problem we've observed with traditional Business Consulting and Advisory. Business Owners are often armed with knowledge and a deliverable, however, lack the resources, accountability or ability to implement the steps to bring change.
Narrow scope of consulting
A specialist Consultant or Advisor can generally only see the challenges and solutions that relate to their specialty. As Maslow is attributed for saying, "if all you have is a hammer, everything looks like a nail". We believe a Generalist Business Consultant should be consulted for a holistic view of the business before any specialists are brought into a company.
Doesn't prioritise the Business Owner's goals
Most New Zealand Businesses were started so their owners could have a better life. Perhaps it was for greater flexibility, higher income, or simply to do what they wished with their life. This is almost always overlooked during a Business Consulting engagement, however, we believe it should be at the centre of any business improvement discussion.
Poor return on investment
Typically a huge up-front cost that is far beyond what a regular New Zealand Business Owner is willing to outlay.
Even worse, is combining a high cost with failure to implement. This effectively wastes the Business' money and the time of the Business Consulting.
The Business Consulting New Zealand difference
After experiencing the successes and failures of Business Consulting, Advisory and Coaching, we designed a tailored approach for the clients of Business Consulting New Zealand.
To offer a complete Business Consulting package that actually works, our Business Success Partners have a unique approach. The full process is detailed on our services page, with an overview below.
1. Discovery and Diagnostic
To make any business improvements, we first must establish a complete understanding of the current situation.
The first part of the understanding process is to identify the business’s key issues and challenges that need to be solved to move forward. This is done alongside the business owner to ensure we get it right.
The second part of the understanding process is to diagnose the financial impact these challenges are having on the business, and the future potential if the profit leakage was fixed, and the business was to grow.
We offer the Discovery and Diagnostic sessions free for any New Zealand business. Click here to register for your no-obligation session.
2. Create a Success Plan
Using the Business Owner’s specific industry knowledge and our business expertise, we create a vision for the future and a defined plan to achieve success.
We first start by establishing where the Business Owner(s) would like to be in the future, so we can create a business vision and plan that is aligned with what the owners want on a personal level.
Together, we consider all of the strategic and operational components of the business, plus how to best solve the challenges and profit leakage issues that were identified during the first phase. Once we have explored all of the options, we’ll complete a robust business plan, including the pathway to bring it into reality.
Running in parallel with the business plan is a financial forecast and a range of key performance indicators (KPIs) specific to your business. This gives the Business Owner a complete understanding of how the business needs to be performing to meet business, financial and personal goals.
3. Guidance to Goals
We’re with you every step of the way! As your business moves forward, we continue to help and support the implementation of the plan and manage the performance of your business.
We’ll help you to measure and manage financial and non-financial elements of your businesses on a regular monthly basis. This will give you complete transparency, good decision-making, and ensure that your business is improving month on month.
To bring the business plan to fruition, we’ll help you and your team with implementation and advice. This is where most regular businesses and consultants fall down, is a lack of follow-through. We don’t allow our clients to fail in achieving success, so we keep you accountable and stand next to you until you’ve achieved your goals.
As a busy Business Owner, we understand there can be a lot to learn and prioritise. We’ll act as a coach and a sounding board to ensure your whole life is on-track to improve.
When situations change, it’s necessary to adjust course. As a team, we regularly re-visit the planned destination and the business plan, to ensure we’re on the right track. Although we focus on delivering real results in the short-medium term, it’s equally important to keep an eye on the horizon for new opportunities to create the best future.
