How to Hire a Business Consultant

A business consultant is an expert who helps business owners find solutions to their business challenges and optimize their productivity and performance. 

What do business consultants do?

Business consultants provide advice and develop strategies to help business owners overcome obstacles and meet their goals. A business consultant's specific responsibilities can vary depending on their areas of expertise and their clients’ individual requirements.

A business consultant can fulfill the following functions:

• Identify a company’s key issues 
• Develop strategies to navigate challenges and achieve business objectives
• Implement strategies to meet both short- and long-term goals
• Provide a fresh perspective and professional advice 

A business consultant’s process typically involves three phases: investigation, strategy development, and implementation.

Investigation

A business consultant investigates issues hindering growth. They analyze your business’s systems and staff and external factors to identify opportunities and determine the root cause of existing problems. 

Strategy development

After they have identified the source of the problem, a consultant can assist in finding solutions to address the issue. The consultant will factor in information they uncovered during the investigative phase (including your business’s strengths and weaknesses and external influences such as market conditions and competitor activities) to create a customized plan of action.

Implementation

A business consultant can then help you implement their solutions. During the implementation phase, the consultant typically oversees staff management and training, monitors the plan and makes adjustments as necessary, and conducts evaluations to measure the overall impact of the implementation. 

Why hire a business consultant

Business owners hire consultants for a wide variety of reasons, from addressing specific issues to obtaining big-picture input on how to achieve core objectives.

When growth has plateaued

It can be challenging to figure out the next step when your company’s growth has stalled. A business consultant can provide new insights and creative approaches to help stimulate growth. 

During transitions

Transitions can be unsettling for staff and consumers alike. If your business is restructuring or going through a merger or acquisition, a business consultant can help facilitate a smooth transition.

During expansion

Whether you are expanding into a new location, launching a new digital storefront, or offering new products, a business consultant can provide information about industry trends, competitors’ tactics, and market entry plans to help you meet your expansion goals. 

When you need help with project management

There are times when you know what a project needs to succeed, but your staff doesn’t have the know-how to make it happen. A business consultant can bridge the knowledge gap by providing the external expertise needed to complete the project.

When you want to maximize efficiency

Companies often refer to business consulting services when they want to optimize their efficiency. A business consultant can evaluate your company’s operations to identify problem areas and develop time-saving and cost-reduction strategies. 

During a crisis

Crises such as recessions, pandemics, and public relations issues can have a significant impact on business operations. Hiring business consultants can be a smart move during a crisis, as they can implement proven methods for responding to and managing crises. Consultants can provide the neutral perspective necessary to navigate the chaos and get your business back on track. 

When you need a business plan

A business plan helps you stay focused and hit your goals no matter what stage your business is in. A business plan typically includes a description of your company, your mission statement, the strategies you will use to achieve your business’s success, and any funding requests.

A business consultant can help you create a comprehensive business plan that supports your company’s objectives in every stage and ensure that each part of the plan aligns with your ultimate vision. 

When integrating or updating information technology

Whenever a company updates its current systems or integrates new technology, there is a risk of integration failure. A business consultant with information technology (IT) experience can help minimize disruptions and confirm that your systems are functioning properly. 

Types of business consultants

Business consultants offer services across multiple industries, including the financial, marketing, and tech fields.

The different types of business consultants include the following: 

• Strategy and management consultants. A strategy or management consultant analyzes your company’s processes to identify issues that are impeding growth and develop solutions to help you meet your goals.
• Operations consultants. Operations consultants look at your business’s daily activities and pinpoint areas where improvements can be made to optimize efficiency and minimize expenses. Businesses in the manufacturing, financial services, healthcare, transportation, and service delivery industries may find operations consultants to be especially helpful. 
• Financial consultants. A financial consultant has a deep understanding of risk management, investment, and tax management strategies, and uses that knowledge to help businesses develop a plan to manage their current and future finances. 
• Human resources consultants. Professionals who offer human resources consulting services can assist with a variety of topics, including recruitment, hiring, payroll, benefits, productivity, employee satisfaction, and HR staff training. 
• Marketing consultants. A marketing consultant can train your marketing team, suggest marketing strategies to attract your ideal audience, and coordinate your business’ marketing activities. 
• IT consultants. An IT consultant can help you find and implement new technology systems, train staff, and monitor and troubleshoot systems once they have been installed.
• Sales consultants. Sales consultants can conduct sales strategy trainings for your staff and help build relationships with both existing and prospective clients to foster revenue growth.

How to hire the right business consultant

Tips to help you find the right business consultant for your company include specifying your goals and asking potential candidates thorough questions about their offerings and processes. 

Clearly define your needs

In order to achieve your goals, you should know exactly what issues you need help with. Consultants can’t solve what they can’t see. A lack of clarity about your specific challenges can make it difficult to find a candidate who can help you. 

Thoroughly vet candidates

When it comes to a business consultant’s credentials, don’t just take their word for it. Reach out to their references and read reviews before making a hiring decision. Look for a consultant who has experience working within your industry and has had success helping comparable companies. 

Discuss their methodology

Ask the consultant what kind of tools, resources, and procedures they use to accomplish results and how they have tackled similar problems in the past. The right consultant will offer innovative solutions and use methodologies that align with your workplace culture.

Agree on clear objectives and outcomes

You and the consultant should agree on the metrics for success and ultimate outcomes. Success metrics–or key performance indicators (KPIs)–help you monitor the impact of the consultant’s work. 

For instance, if you hire a marketing consultant, you might use email open rates or the number of leads generated as success metrics and agree on a goal of a certain percentage increase within a specified timeframe.  

Create a strong consulting agreement

A consulting agreement communicates expectations and provides legal protection for your business. Your consulting agreement should clearly define the details of the work and the terms that both parties agree to.

A legal expert can help ensure that your consulting agreement contains clauses outlining key information such as deliverables, payment terms, deadlines, and grounds for termination. 

With our consultant contract services, a qualified attorney can help you write, revise, and customize your consulting agreement so that it is legally binding and protects your business.

Plan for knowledge transfer

A new system is only as effective as the people who maintain it. A business consultant should have the ability to train your staff on how to use the tools or systems they implement to help ensure your company’s continued success.

FAQs

How much does it cost to hire a business consultant?

The cost of hiring a business consultant depends on a variety of factors, including the type of consultant you hire, the scope of the work, and whether you hire a freelance consultant or a consulting firm. 

For instance, according to a 2023 survey by the Institute of Electrical and Electronics Engineers (IEEE), engineering consultants charge a median rate of $180, while the U.S. Bureau of Labor Statistics reported a 2023 median hourly wage of $37.83 for all occupations in the Management, Scientific, and Technical Consulting Services category.

How do you determine the ROI of a business consultant?

To calculate the return on investment (ROI) of a business consultant, you subtract the actual or estimated costs of the consultancy from the amount of income the consultancy is expected to bring in. The sum is the profit the consultancy is expected to generate. You then divide the sum by the costs.

The formula for ROI for a business consultant can be written as follows: 

ROI = (Profit from consultancy - Cost of consultancy) / Cost of consultancy x 100%

While the ROI formula may seem simple enough, keep in mind that it can be challenging to accurately estimate profits, and the cost of hiring a consultant may offset other expenses, such as the costs associated with an unmitigated public relations disaster or the cost of hiring a full-time employee instead of a consultant.

For instance, if you are hiring a consultant instead of a full-time employee, you should take into account the total expenses associated with hiring an individual full-time vs. the cost of hiring a consultant on an as-needed basis. When you consider the costs of recruitment, hiring, training, salary, benefits, bonuses, payroll taxes, and insurance, hiring a consultant can be cheaper than hiring a full-time employee.

Should I hire a freelance consultant or a consulting firm?

The decision to hire a freelance consultant or a consulting firm comes down to the consultant or firm’s relevant experience and availability, and your budget and personal preferences.

One benefit of hiring a consulting firm is that the quality of their work is backed by their brand. Another perk is that a consulting firm typically has many employees, so if an issue arises during the consulting period that is beyond the expertise of one employee, you may be able to access the full knowledge base of the firm. 

Freelance consultants may have limited availability to take on consulting jobs in comparison to consulting firms, but they may be more affordable than a firm. Freelance consultants are often highly motivated to provide their best work to help build a name for themselves. 

Whether you choose a freelance consultant or hire a consulting firm, you should verify their qualifications. A business consultant usually has a bachelor’s degree–typically in a field such as business administration, marketing, or finance. Some consultants may have a master’s degree, while other business consultants may have additional certifications. You should ask to see proof of their track record and details about how they have solved problems for similar clients. 

Business consulting can be a rewarding career and many consultants charge top dollar for their services, so it’s important to hire someone who has the qualifications and experience necessary to help your business succeed. 

What should a consulting agreement include?

A consulting agreement should include information about the scope of work, payment terms, and what happens if either party breaches the agreement. Consulting agreements often contain the following clauses:

• Responsibilities
• Deliverables
• Deadlines
• Payment terms 
• Intellectual property
• Termination
• Confidentiality