What is a business consulting firm?
Before we answer the question, “why hire a business consultant,” let’s take a look at just what a business consulting firm is and what they do.
SMBs may hire business consultants for a variety of reasons. Some are looking for an outsider’s unbiased assessment of a product, service, or process. Some are looking for additional brainpower and expertise to help address issues. In many cases, small businesses will lean on business consulting services when the company has plateaued and they want to find new avenues for growth.
What do business consulting firms do?
There are many different types of business consulting firms, but they generally fall into four main categories.
Information technology: SMBs looking to improve their infrastructure or scale for growth will often rely on IT consulting firms to help them assess their current IT infrastructure, advise on new system selection, support with system implementation and integration, and reduce costs. IT consulting firms will also help identify competitive advantages and the technology requirements, design enterprise architecture, and provide advice on cybersecurity issues.
Business strategy consulting: Business strategy consultants specialize in planning and strategy for a number of key business functions. They help executives identify and set realistic goals, develop growth plans, restructure or reorganize after acquisitions, and align resources with objectives.
Operations consulting: Business consulting firms specializing in operations provide expert guidance in developing efficiencies, reducing overhead, and improving customer service. They may review current market trends, optimize supply chains, streamline purchasing processes, and many other core business function areas as needed.
Business transformation consulting: Business leaders often look to implement a transformation program when there is a shift in their industry/market, when they have identified untapped opportunities, or when they want to realize new growth potential. Business transformation consultants can provide guidance in these areas, as well as research into markets, trends, customer demand, technology requirements, and more.
Business consultants in all areas will follow a number of the same steps in their process. These include:
Learning about your business: A good consulting partner will take time to learn about the ins and outs of your company, your successes, your goals, your brand, and your personnel. They will also take time to learn about your industry specifically from your perspective.
Research: Consulting partners will then perform research on both your competitors and their other clients. By relating your challenges to those of other clients, they can offer guidance and possible solutions that have proven effective.
Identify challenges: After these first two steps, your business consulting firm will have a clearer sense of what challenges your company is facing. They can then return to their research step to investigate similar challenges at other organizations and the solutions that have been implemented.
Developing a plan: In collaboration with you and your team, a business consulting firm will create a detailed plan to help your business address any challenges head-on. The plan will include concrete recommendations for steps to take, estimated timelines, and expected outcomes.
What are the benefits of hiring a business consulting firm?
When asked “why hire a business consultant,” most SMB leaders will point to the benefits of business consulting services. Small or large, the benefits of consulting firm services have helped thousands of companies over the years. Some of the key reasons why SMBs hire a business consultant include:
Expertise: Business consulting firms develop expertise in one or more areas and across industries. They can provide and apply solutions from these different industries, recognize challenges you may be facing, and give you peace of mind.
Outside perspective: Business consulting firms are often called in to help offer a fresh set of eyes on a company. This is valuable because, while you and your employees know the business better than anyone, you may not be able to see potential problems or approaches. Consulting firms can look at your company through fresh eyes and offer a new way of thinking through goals, challenges, and so on.
Efficiency: With limited staff, it would be almost impossible for small business leaders to pull people from their roles and create a team to analyze business challenges or objectives. Working with a business consulting firm allows an SMB to utilize the focused time and expertise of a dedicated partner organization without interrupting day-to-day operations.
Flexibility: The variety of consultants and areas of expertise allows you to work with a company that specializes in your specific area of need. IT, accounting/finance, HR, processes, project management, and many other key topics can be addressed specifically or in any combination needed.
How much do business consulting firms charge?
Pricing for business consulting services will vary depending on a number of factors. Consulting businesses that offer multiple service areas may charge different fees for each of those fields. And there will be different billing styles, where some will charge hourly rates and others may offer flat rates for a certain amount of time and research.
The pricing models may fall into one of the following categories:
General pricing ranges below cover some of the consulting services mentioned in this piece, but you will likely find a wide range of variability depending on your business size, location, and needs.
IT consulting - $100-$300 per hour
Cybersecurity - $200-$400 per hour
Human resources - $150-$300 per hour
Risk management - $100-$300 per hour
Business strategy consulting - $250-$400 per hour
These are just a few examples of price ranges for hourly consulting fees. Firms with different pricing models may average out to similar hourly rates, or they may vary depending on expertise and time required.
How to choose a business consulting firm
Choosing to find a business consultant to assist your company is a great way to identify opportunities that can help your company grow or overcome challenges. Among the questions to ask a business consultant, a few good examples are:
Have you worked with other companies in our industry or field?
Do you have examples of recent success with a client?
Where would you start when reviewing our company and challenges?
What do you know about our business or brand already?
What amount of time do you usually devote to a client our size?
These are just a few general questions you can begin your conversations with. You and your team are encouraged to also think of more business-specific questions, especially if you have not worked with a consulting firm before.
Reviews are among the most important pieces of information when making the decision to partner with a firm. This is why we have compiled a directory of highly reviewed firms with proven track records, and included client reviews to provide specific background information and feedback on each firm’s process. Capterra’s Business Consulting Firms directory page is a key resource to help you narrow down your search and find the right business consultant for your needs.
Should I use business consulting services or my own software?
Business consulting services are incredibly valuable for business owners of small and mid-size companies. And given the range of expertise and potential benefits, it is often a great choice. However, there is also the option to utilize software and handle many of these functions internally. In fact, you may already be using some of them in your day-to-day operations.
Examples include project management software, CRM software, communication suites, time tracking and productivity software, and more. Many of these software options provide robust reporting capabilities, which can help you compile much of the data and insights you need to make business decisions.
The main challenge with relying solely on software is devoting the time and personnel to making the most of it. Implementing, utilizing, and analyzing software results, and developing reports and action plans, are labor intensive and time consuming tasks. Additionally, the information can be complex and require more specialized expertise than you or your staff currently have available.
Creating an internal team and choosing a specific area of focus can make it possible to effectively use business software in house. But the benefits of working with a knowledgeable, experienced business consultant will likely outweigh the savings gained from choosing a software solution alone.
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