In most business start-ups, there comes a time when the entrepreneur or founders need to consider engaging outside help.
This is often the case where the entrepreneur has no previous business experience or training, or in the case of inventors of new technology or innovations. The selection of outside professionals must be consistent.
Reasons why professional advisors are hired:
- To provide specialist knowledge that gives a business an accelerated knowledge acquisition.
- To provide a professional service that does not exist in the organisation, or that is needed for a specified period of time.
- To stimulate solutions to specific problems and scenarios.
- To confirm or give best advice to project plans or future direction of a business. Sometimes professionals are a “sound board” to test years of experience.
- To give constructive criticism, analysis and challenge thoughts.
- To facilitate the search for ideas and solutions with existing team members.
- To introduce and train on systems that may improve a business’s efficiency.
- To access a network of business or government contacts. Sometimes this can lead to contracts and opportunities.
- To bring in an experienced “outsiders” evaluation and point of view.
- To provide training on cutting edge technology and processes.
Where to find Professional Advisors
The internet offers a great place to start when looking for any professional service providers. Trade journals and magazines also offer great leads on experts. However, since most advisors consider themselves “experts”, personal referrals from your trusted network of business owners or family can be useful.
Most small business owners are also advised to have a “business mentor” and this is often a good place to start.
The first step to follow is that of a due diligence or reference checks on potential suppliers. This involves asking for past client references as well as professional accreditation bodies.
This will range from tax advisors, accountants, financial planners, legal, information technology, human resources, payroll, marketing experts and any other specialist skills required by a business. It is important to try engage professionals with a good track record and references.
Professionals should never solely be engaged purely on the basis of price. It may also be best to avoid professionals that work with direct competitors in competitive areas such as marketing and research.
It may harm your business to receive very similar advice to that which your direct competition may have equal access to.
Another major consideration is price. The price of a service must be within market related ranges. Sometimes, a small business will choose to select a premium service provider in order to try and engage the best experts and lessen the risk of business failure.
It is often the case in some specialist areas like marketing and financial planning where a business owner would pay a premium for the best advice or use professionals with small business specialisation.
Professional advisors must be accessible when needed. This may seem obvious but sometimes selecting very popular or overloaded professionals may actually harm your business. Where possible, an entrepreneur must choose a professional near a geographic location if their physical presence is required.
With improving communications and the internet, if physical location is not an issue, you can even find an international service provider. However, a thorough due diligence is an absolute must.
The African Perspective
It is important to try and always consider local market conditions and laws when using consultants which are bringing ideas from developed markets like The United States and The United Kingdom. Some tried and tested methods in these markets to not work or enjoy the same measure of success in South Africa.
It is therefore best to bear this in mind and ensure that where such professionals consult, they are able to adapt to local conditions or an African business perspective.
Contractor vs Consultant
One definition is that the Consultants role is evaluate a client’s needs and provide expert advice and opinion on what needs to be done, while the Contractors role is generally to evaluate the client’s needs and actually perform the work.
However, these terms, Contractor and Consultant, have become mixed up over the years and at times have been used interchangeably. Especially when the Consultant, after having given his or her professional opinion or advice on what has to be done, then enters into an agreement (contract) to provide the services required. At that point the Consultant may be said to become a Contractor.
No small business enjoys the advantage of having all the professionals it requires from start up. External professional advisors are an added and necessary addition to the staff of any business. Indeed, big business often relies and utilises such skills.
Entrepreneurs must therefore embrace these service providers to provide a mitigating factor to avoid every entrepreneur’s worst nightmare, that of business failure.