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The cost of hiring a consultant can be significant. There’s a big time commitment involved, plus it would be naive to think that everyone out there promoting themselves as industry experts can help you. So what should you be considering before you take that first step?
Firstly, you need to thoroughly research and find a consultant who has the skillsets you’ll need to take your business to the next level. Thorough research will ensure you find a consultant in whom you have confidence. Without that confidence, you won’t trust their advice and the relationship will fail.
Secondly, you need to know that breaking through requires personal growth. In my experience, growing and stretching hurts a bit and it’s uncomfortable. So before you engage a consultant, be sure you’re ready to be challenged.
Running a business is a bit like assembling a jigsaw puzzle; it’s all connected. You might have to shift one piece around to see where another piece fits. A good consultant will simplify that process for you, helping you to focus on the issues you really need to be working on without overwhelming you.
Cost vs Value
In a recent blog, I stated that one of the keys to success is investing in yourself. Let’s look at cost versus value in more detail:
Let’s assume you engage a consulting firm for 12 months and it costs you a sizeable sum in cold hard cash for the year (depending on who you engage, the work involved and the size of your firm). Yes, it’s a big spend, but what are the paybacks?
1. Extra income
Getting your business working properly generates extra income. In almost all cases, the work you do will more than cover the extra cost of the consulting work, even in the first year.
For some firms this might be a move from a 0.5% pa fee for existing clients to a 1% pa fee. If you still haven’t made that move, learning how to do it and more importantly, feeling like you you are worth it, is huge value. Do the numbers for yourself.
For other firms, improving their selling skills makes all the difference. That could be positioning and pricing their offer correctly with new clients, or getting cashflow modelling at the heart of the proposition.
Addressing these issues helps you attract more clients and price more aggressively (in line with your true worth) for both new and existing clients. Once these things are embedded, the client leads and the money start to flow more easily. The growth in income that results also stays with you in subsequent years after the consulting work has finished.
2. Extra business value
Growing your recurring income and business profitability creates a more valuable asset to sell when you are ready to do so. Not only do you earn more money along the way, but you can sell it for a higher price when you are ready to exit.
If you increased your recurring revenue by 50% – 100% over the next 3 years, what would happen to your business sale value? At a 2x or 3x recurring income sale multiple, it’s a pretty powerful equation.
3. Less work
Most business owners I know work too hard, but can’t see how to streamline their workload. Getting your business organised and having the right team on board will mean less work for you. Reducing your personal workload gives you the option to use your newfound time to work on higher order business issues (strategy, marketing, client issues) and enjoy more leisure time with your family.
4. More life
For most business owners, the whole point of going into business for themselves was to gain control and freedom and work toward building something that could be sold, providing financial independence.
The reality for many is that their business becomes just another job or a trap in which they find themselves. They work longer hours and have less family time than ever before. Don’t get me wrong, it can still be better than the alternatives (like being stuck on the corporate treadmill), but it’s not really living the dream.
A good consultant will help you keep your eye on the real prize; having more life. It’s easy to forget some days, but your business should be a vehicle for you and your family to create their ideal life. Getting it in shape helps you live now, rather than wait for some crazy pay-off in the future.
5. Skills that stay with you for life
Yes, the investment in time and money is significant, but the skills you learn from your consultant stay with you for life. The return on those skills accrues to you in a compounding fashion, year after year after year.
The bottom line is that good consulting work is designed to help you advise better and live better.
When I worked as a financial planner, the thrill in the job for me was not just the technical and investment issues we helped people solve, but knowing that I changed people’s lives. As a consultant, the thrill in my job is exactly the same. I’m not interested in just increasing people’s bank accounts; I want to see them create their ideal business and personal life. That’s our mission at FP Advance.
Don’t be fooled. There ain’t no free lunches out there – you get what you pay for. If you want someone good to work with you and your business over an extended time frame, it’s going to cost. However, if you do your due diligence, trust your gut, and then invest in yourself, you’ll reap the rewards.
Advise Better, Live Better
As I said earlier, the point of a good consultant is to help you keep your eye on the real prize; having more life.
Here’s a story which featured in Tim Ferriss’ book The 4-Hour Work Week which captures the sentiment perfectly. It’s the Mexican fisherman story, which I’d encourage you to read!