When You Need to Hire a Consultant, Here’s Some Helpful Dos & Don’ts

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You have a venture idea or a business expansion project in the back of your mind and you want to explore its possibilities in more detail. You don’t have the time to research the feasibility yourself (you are a small or mid-size business owner, after all!) and this is not something that you can delegate to staff. Accordingly, you decide to live a little dangerously and (gasp!) hire a consultant. Martin Ashford, the internationally renowned management consultant, in his 1998 book ‘Con Tricks: The World of Management Consultancy & How to Make It Work for You’  (still available at http://www.amazon.com) had a few words of advice for those business owners who want to test the waters by putting their faith in a consultant.

What is a consultant 1? Without doubt, there are many mixed feelings throughout the business world about consultants. For example, are they valued assets, rapacious predators or quirky eccentrics who can’t get a normal job? There is no doubt that this controversy will go on indefinitely. One of the touchstones for this controversy is this: do you know of any other reputable profession that permits anyone to accept an assignment for a sizable dollop of money to add economic value to a client that can have far-reaching financial consequences for many people, with no pre-conditions, no licenses, no permits and no operating criteria? I have previously written about this subject in my website: https://chironthebusinessdoctor.com/why-do-companies-use-consultants/.

What is a consultant 2? Notwithstanding my tongue in cheek analysis, consultancy is a profession in which ethical conduct, personal reputation, trust and integrity are the keys to success. In turn, professional consultants exercise discipline and responsibility in all dealings with their clients. Putting it bluntly, more than in just about every other profession, a consultant’s reputation is his or her bond, the raison d’être. Without reputation, a consultant will not attract business.

Do you need a consultant? Of course, at the moment you may not know whether you need to hire a consultant or not. If you want to test the water, and there is no reason why you shouldn’t, you can take my ‘Two Dozen Questions to Show Why I Need a Consultant’ Test at my website https://chironthebusinessdoctor.com/why-do-companies-use-consultants/.

The dos & don’ts. Martin offered a number of useful dos and don’ts for business owners about to hire a consultant. I have modified them slightly to suit local circumstances. You may find them helpful:

The Dos:

  • Do expect to pay serious money for serious consultancy support.
  • Do treat consultancy like any other investment: it has to produce a payback in the long, or preferably, not-so-long term.
  • Do consider carefully whether you really do need to pay the premium rates commanded by the big-name, big-accountancy/consultancies or capital raising organisations. Be proactive and use the more economically and financially frugal consultants (including me at https://chironthebusinessdoctor.com), who specialise in helping small and mid-size companies by providing competent consultancy services at generally quite modest cost.
  • Do look for ways to give the consultant an element of incentive to achieve the objectives set for the assignment.
  • Do consider dividing the work involved in very large assignments into appropriate modules, with the later stages dependent upon a successful outcome from the earlier.
  • Do in (very large) complex situations, consider starting with a scoping study in order both to define the main project more precisely and to get a better feel for the consultant’s modus operandi.
  • Do consider mixing your own in-house resources with the consultant in order to hold down the overall cost.
  • Do make sure that you are clear in your own mind why you are undertaking the work and what you need to achieve, so continually monitor the progress of the project against these objectives.

The Don’ts:

  • Don’t assume that you will necessarily get what you pay for.
  • Don’t assume that you will not necessarily get what you pay for.
  • Don’t be too quick to believe that the bigger the fee, the better the quality.
  • Don’t be too quick to believe that the lower the fee, the poorer the quality.
  • Don’t tell the consultant how to do the job, just know precisely how to define the job and the result you would like.
  • Don’t be pushed into accepting a methodology if it is not what you really want.
  • Don’t rush into demanding contingency fees unless the assignment and its outcome can be defined very tightly.
  • Don’t push too much risk on to the consultant: remember, risk has a price.
  • Don’t allow yourself to slide into fees based on time and materials simply because you cannot be bothered or don’t know how to define the job properly.
  • Don’t split up the work into so many parts that you lose any economies of scale.
  • Don’t move the goalposts once the job is underway.

I have no doubt that whichever side of the equation you are on, hiring a consultant or accepting a client’s assignment, the first time is traumatic. That is because both parties think:

  • ‘Have I done the right thing?’
  • ‘Have I paid too much?’ or ‘Have I accepted too little?’
  • ‘Will I really be able to get along with this person?’
  • ‘What will happen if … (fill in the blanks)?’

You probably already know the feeling. Why not share your experiences here?

Yours sincerely,

Graham  Segal

Chiron! the business doctor.™ ... relieves business pain!™ 


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© Graham Segal, Author. March 2013. All Rights Reserved

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This website and the associated webpages content are produced by Graham Segal trading as Chiron! the business doctor.™. They are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License based on Graham's work at https://chironthebusinessdoctor.com.


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