Does Your Small Business Need a Consultant?
Small business consulting services can make your business more profitable
BY SUSAN WARD Updated November 20, 2019 / https://thebalancesmb.com
Small business owners often are do-it-yourself types who prefer to be involved in every aspect of their operations, from choosing the type of coffee machine for the breakroom to doing the company tax returns. Many business owners find it difficult to delegate tasks to employees or outside consultants. However, if you are a small business owner and spending too much time on noncore business activities, you can find assistance from consulting services.
Financial restraints often require owners of startups to be jacks of all trades during the first months or years of operation. As businesses mature and profits increase, there are many needs that are better served by experts in the discipline. The ever-increasing complexities of information technology, the tax code, and the regulations and other legal aspects surrounding a business can be very difficult to stay abreast of.
Word of mouth referrals are a common way to find good consulting help once you’ve determined you need it. If you are new to a particular area, local business groups or chambers of commerce might provide referral assistance.
Once you’ve interviewed and selected a consultant, draw up a contract that addresses the following areas:
- terms (time frame, description of services to be provided, etc.)
- conditions of termination of the agreement
- a Statement of independent contractor status
- confidentiality clauses
- non-disclosure clauses
If you are just starting out in business and cash flow is tight but you need a consultant, consider bartering your services. If you run a restaurant, for example, you might agree to cater a consultant’s event for free or for a reduced rate in exchange for their services.
There are five key areas where consultants provide the most value.
Accounting and Bookkeeping
Accounting and bookkeeping are two of the most common consulting activities needed by small businesses. When deciding whether or not to contract out some or all of your bookkeeping or accounting duties, ask:
- What is my time worth?
- Can I do as good a job as a professional in this field?
For a solo enterprise or the startup phase of a small business, you may have time to handle bookkeeping and some accounting chores if you have the desire and aptitude.
However, as your business grows, it may make more sense to farm out some of these duties to professionals. Besides, many business owners find bookkeeping/accounting a tedious chore, especially if the business has a high level of transactions.
In as little as a few hours a month, a good bookkeeper can do most of your record-keeping, including submitting invoices, paying bills, doing payroll, and prepping the company accounts for tax season.
A good accountant can do much more than keep you abreast of tax changes and doing your taxes. She can:
- navigate the maze of tax laws and provide the financial advice you need to manage and grow your business;
- make recommendations on how to lower your taxes, such as whether or not to incorporate or if you should lease or purchase commercial space;
- provide advice on ways to cut business costs.
Hiring an accountant for just a few hours a year may be well worth your while.
Information Technology (IT) Services
IT is one of the most rapidly changing fields in business as new technology regularly impacts devices or software systems including:
- Desktop computers
- Mobile devices (laptops, cell phones, tablets, etc.)
- Cloud computing services
- Point-of-sale (POS) systems
- Business websites and social media platforms
- Word processing, spreadsheets, etc.
- Accounting software
- Tax software
- Computer-aided design (CAD) systems
Unless your business is in the information technology field or you are otherwise proficient with maintaining hardware devices and solving software issues, an IT consultant is recommended.
In addition to repairing hardware and operating systems, an IT consultant can perform other duties, including:
- Ensuring valuable business data is backed up in case of emergencies;
- Setting up cloud computing services;
- Installing software systems;
- Providing training on hardware and software systems;
- Advising on technology upgrades and methods of using technology to streamline your business and improve productivity.
Dealing with personnel-related issues often is difficult and time-consuming, and many small businesses cannot afford the expense of a dedicated human resources (HR) individual or department.
However, businesses with effective HR strategies typically have better working environments and higher morale, which increases employee retention and lowers turnover costs. As a result, more and more small businesses are outsourcing their HR functions.
Professional HR consultants are trained and knowledgeable in all aspects of employee relations and can:
- handle the recruitment of new employees or contract workers, including advertising, interviewing, background/reference checks, etc.
- deal with disciplinary issues and terminations;
- handle employee orientation and organize proper training.
- manage employee safety and welfare concerns;
- provide counselling to employees;
- limit your legal liability by ensuring that employee complaints or disputes are properly handled;
- keep you abreast and in compliance of state/provincial and federal regulations regarding employees, such as wage laws, hours of work, holiday time, leave of absence, workers’ compensation, mandatory benefits, and reporting;
- arrange/provide optional benefits such as health, dental, vision, and disability insurance for employees and their families. HR firms often can leverage their relationships with benefits providers to offer affordable employee benefits packages.
Successful is essential to attracting and retaining customers—the number one need for most businesses, especially startups.
Unfortunately, marketing is highly specialized and while many small business owners excel in providing products and/or services to their customers, they often are less proficient with marketing and cannot afford full-time salespeople.
The right marketing consultant for your business should have a high level of expertise in your industry and be able to bring in fresh ideas as well as tried and true advice on how to develop strategies and campaigns.
Marketing consultants can work with your business to establish and implement strategies based on:
- your overall business goals,
- your products or services,
- your target users or clients,
- your company’s role in relation to the competition.
Consultants also can design and implement individual marketing campaigns and provide general advice on promoting your business through activities such as:
- Social media campaigns (Facebook, Twitter, etc.)
- Email blitzes
- Website and/or blog promotions
- Radio or newspaper ads
- Press releases
- Charity event sponsorships
- Cross-promotion through buddy marketing with other businesses
Having a good business lawyer available when you need one can be valuable when confronted with circumstances that involve more complex legal issues or may involve liability, such as:
- complex partnership agreements or share allocations;
- lawsuits involving partners, clients, shareholders, or employees;
- legal action against your business by government agencies for issues such as licensing, tax disputes, or noncompliance with regulations;
- real estate purchases or lease agreements;
- trademark or intellectual property rights issues;
- franchise agreements;
- selling or merging your business, or purchasing the assets of another business.
A typical small business attorney is a generalist who can analyze your problem and provide solid advice or refer you to someone more specialized in a particular area of law if required.