One of my readers sent in these questions after reading my previous article on management consultants. Here are my responses to him, which I hope will also resonate with many others.
QUESTION: At what scale should a start-up engage management consultants ?
ANSWER: You can have a consultant as far as you already have the idea, here is the thing…the consultant will advise you on what business model to follow, give you an entry market strategy and more importantly help you define your niche and market. And with this the consultant will sit down with you and get to know what you really want to achieve as a business. They will research and later present to you with what business such as yours are doing, the Mission, Vision and Core Values that will help drive the culture and business objectives. If the consultant is able to walk you through with it the better, but giving you a strategy paper to follow is also key, which will act as a template that will help you monitor and evaluate your business as a going concern and how far you shall have gone with the implementation.
QUESTION: Does the consultant help in evaluating the viability of the idea as well because now it sounds like the consultant can do everything?
ANSWER: The consultant will present case studies of similar businesses, how they fared on and what you can borrow from them. This will be an eye-opener to you as the entrepreneur and may change your mind on how you thought you would approach the business. I must admit, however, that consultants charge a lot of fees and you may not want to employ one to do everything. They will advise you when you need to employ staff, when to fire them, how many staff you may need, whether to employ them on contract or permanent; putting factors such as productivity of the employees and profitability of the firm into play.
QUESTION: So what options does a small cash strapped entity have to enjoy such advantages that you people offer?
If you get a consultant who is able to offer his services in exchange for equity in your organisation the better; some would want to be partners as well in exchange for their services to your firm. You can also ask a consultant to help you develop a business plan that will help you find a financial partner, a philanthropist who may want to invest in your idea, or a plan that you may use to get already established firms to partner with you in your business.
The plan will define what your stake in the company will be and will ensure that you do not give too much at the expense of yourself as the owner of the business or the idea. A Management Consultant may also advise you on whether entering into a partnership with a mature firm is better than getting a financial partner and vice versa. They will also advise on the risks involved and help you asses the risks to help you come up with a win-win model.
QUESTION: What about advise on opportunities for business, do you offer such?
You have to start from somewhere with a management consultant. I know management consulting firms publish their findings on the business environment and prospects for doing business which you may a look at especially from the major consulting firms such as KPMG, Deloitte and PWC. You can get a business opportunity you would want to invest in and then engage a consultant to advise on its viability.
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