Do Business Consultants Actually Add Value? | Universal Creative Solutions

Small and medium-sized businesses (SMBs) face a myriad of challenges, from resource constraints to fierce market competition. Navigating these complex obstacles often requires strategic thinking and specialized knowledge that may not be readily available in-house. Business consultants are crucial in filling that gap, offering valuable support that allows companies to focus on their core competencies, enhance customer relationships, and drive revenue growth.

For over 15 years, Universal Creative Solutions has been at the forefront of providing expert consulting services to SMBs across diverse industries. We bring a wealth of experience in solving complex problems, developing strategic plans, and implementing effective solutions. We take pride in delivering tangible results that propel growth and improve overall performance, as all business consultants should.

We wrote this article to shed light on the multifaceted role of consultants in the SMB ecosystem. We'll explore how consultants add value through their expertise, unbiased objectivity, and by providing tailored solutions. However, we'll also address potential drawbacks, including cost considerations and the risk of over-reliance on external expertise. Since timing is crucial when seeking external support, we'll also provide guidance on ideal times to engage a consultant, ensuring maximum benefit and return on investment.

The Role of Consultants and How They Add Value

The best consultants provide value in six ways. They should be excellent problem solvers who provide high-level strategic planning and implementation support. Since they work with various organizations, they should be able to provide expertise and experience to guide the business through challenges they have dealt with on other engagements. They should also offer unbiased perspectives to bring a fresh view of the organization's challenges. However, the most essential value a consultant should provide is a positive return on investment that well exceeds the payment they received.

Problem Solving

One of the primary ways consultants add value to small businesses is by helping them solve specific problems. These challenges span a wide range of areas, from operational inefficiencies and financial management to marketing strategies and human resource issues. For example, a small manufacturing business may need help addressing high production costs and low output. An operations consultant can analyze current processes, identify bottlenecks and inefficiencies, and recommend workflow solutions. These solutions may involve implementing lean manufacturing principles, optimizing inventory management, or introducing automation technologies. By addressing these issues, the consultant can help the business reduce costs, increase productivity, and improve overall competitiveness.

Similarly, a small business may need help attracting and retaining customers. A marketing consultant can help by conducting market research, analyzing customer data, and developing a targeted marketing strategy. Their plans will likely include:

optimizing the business's online presence
launching targeted advertising campaigns
correctly tracking results with a multi-touch attribution model
implementing a customer loyalty program

By helping the company better understand its target audience and develop effective marketing initiatives, the consultant can contribute to increased brand awareness, customer acquisition, and cost-effective revenue growth.

Financial management is another area where consultants can provide valuable problem-solving support. A financial consultant can help a small business improve its cash flow management, develop budgets and forecasts, and identify cost-saving opportunities. They can also assist with securing funding, managing debt, and navigating complex tax and compliance issues. Consultants can help small businesses improve their financial health and stability by providing expert guidance and support in these critical areas.

Strategic Planning

Implementation Support

While providing expert advice and recommendations is meaningful, the real value of consulting lies in the ability to translate those recommendations into tangible results through implementation support. Consultants don't just provide a report and walk away; they work closely with small businesses to ensure the implementation of recommendations and that the plans have the intended effect over time. Hands-on support is critical, as it helps bridge the gap between theory and practice to ensure the company realizes the full benefits of the consultant's expertise.

Implementation support can take many forms, depending on the project's nature and the business's needs. It may involve developing detailed action plans, setting key milestones and deliverables, and assigning roles and responsibilities. Consultants can support project management, ensuring that initiatives stay on track and the company promptly addresses any issues or roadblocks. In some cases, consultants may also provide training or coaching to help employees develop the skills and knowledge required to implement and sustain the recommended changes. Training is vital for initiatives that involve significant process or technology changes, as it helps ensure buy-in and adoption across the organization.

Consultants can also help small businesses establish key performance indicators (KPIs) and monitoring technology to track progress and evaluate the impact of key initiatives. Companies can utilize the data to make better decisions and continuously improve their operations by setting clear metrics and regularly reviewing performance data. Throughout the implementation process, consultants serve as a valuable resource, providing guidance, support, and troubleshooting as needed. They can help small businesses navigate challenges, adapt to changing circumstances, and maintain a focus on their goals. By providing comprehensive implementation support, consultants help ensure that their recommendations translate into real, measurable improvements in business performance.

Expertise and Experience

Due to the pace of change in today's market, small businesses have an uphill battle maintaining in-house experts across all the necessary functions. Business owners and team leaders are forced to wear multiple hats, even in areas where they have little experience. It's an inevitable part of starting and growing a business. Hiring a consultant in critical areas to fill in any knowledge and expertise gaps helps SMBs thrive without needing to overload the finances with ongoing labor costs when they can manage with some advice and training.

SMB consultants bring a wealth of knowledge and skills from years of working with diverse clients across different industries. Organizations can tap into this expertise by hiring a consultant without the long-term commitment and overhead costs associated with full-time hires. Consultants can provide specialized knowledge in areas where the small business may be lacking. For example, a marketing consultant can help develop and execute a comprehensive marketing strategy, while a financial consultant can assist with budgeting, forecasting, and risk management. This targeted expertise can be invaluable in helping small businesses overcome specific challenges and achieve their goals while building up the necessary in-house skills to continue on their own.

Objective Perspective

Cost-Effectiveness

Hiring full-time employees with specialized skills can be prohibitive for many small businesses. In addition to salaries and benefits, there are costs associated with recruitment, training, and retention. Furthermore, the workload in certain areas may not justify a full-time position, leading to underutilization of resources.

Consultants offer a cost-effective solution to this problem. Providing expertise on a project or part-time basis allows small businesses to access high-level skills without long-term financial commitment. This flexibility is particularly valuable for organizations with fluctuating needs or limited budgets.

Moreover, you can offset the cost of hiring a consultant through the value they bring by calculating the increased efficiency, revenue growth, or cost savings. By helping small businesses streamline operations, improve performance, and make data-driven decisions, consultants can deliver a strong return on investment (ROI) to propel the company forward and achieve sustainable growth.

Potential Downsides of Hiring Consultants

While there are numerous benefits to hiring consultants, it's crucial for small businesses to also consider the potential drawbacks before making a decision. Two of the main concerns are cost and dependency issues. Our organization works to mitigate both potential downsides by focusing on ROI in every engagement and including training and offboarding to allow internal teams to continue the work's success without persistent support.

Cost Concerns When the Work is Not ROI-Focused

Hiring a consultant is an investment; like any investment, it requires careful consideration. While consultants can provide valuable expertise and support, they come at a cost. Small businesses, in particular, may have limited budgets and need to weigh the potential return on investment (ROI) before committing resources.

Consulting fees can vary widely depending on the project's scope, the consultant's experience and expertise, and the length of the engagement. Some consultants charge hourly rates, while others may offer project-based or retainer-based pricing. In addition to the direct costs of hiring a consultant, there may be indirect costs such as travel expenses, software or equipment purchases, or additional staff time required to support the consultant's work.

Small businesses need to understand their goals and expectations for the engagement ahead of time to ensure that the investment in consulting pays off. They should work closely with the consultant to define the project's scope, set realistic timelines and deliverables, and establish clear metrics for success. Small businesses can better justify costs and measure the ROI by tying the consultant's work to specific business outcomes. However, this is something the consultant should be highlighting from day one. In our project assessments, we always calculate ROI based on the given variables and work with the clients to ensure the engagement makes sense for them.

It's also important for small businesses to be realistic about what a consultant can achieve within a given budget and timeline. While consultants can provide valuable support and expertise, they are not a magic bullet. Solving complex business problems requires a sustained effort over time, and small businesses need to expect to invest the necessary resources to see the project through to completion. As a remote firm, we keep our overhead costs low to service SMBs at appropriate rates, especially considering our ability to produce positive ROI for our clients. Our primary scope of work includes scalable ongoing services across various departments, so you can access expertise when you need it or project-based work when outsourcing or additional support is vital to your continued success.

Dependency Issues When There's No Training or End of Engagement Planning

Another potential downside of hiring consultants is the risk of becoming overly dependent on external expertise. When a small business relies too heavily on consultants to solve problems or drive key initiatives, it can create a culture of dependency that undermines the organization's ability to innovate and adapt independently. This scenario happens when consultants don't focus on knowledge transfer and capacity building within the organization. If the consultant simply provides recommendations and solutions without involving or upskilling internal teams, the business may struggle to sustain the improvements once the consultant's engagement ends.

Small businesses should ensure that knowledge transfer is a guaranteed part of the engagement, mitigating the risk of a failed engagement or losing momentum in their success when the consulting support ends. Make sure to involve internal staff working alongside the consultant, participating in training and coaching sessions, or documenting processes and methodologies. Small businesses can build the skills and capabilities needed to sustain the improvements over time by actively involving internal teams in the consulting process and only outsourcing when workloads exceed existing resources for short periods.

It's also vital for small businesses to have a clear exit strategy for the consulting engagement by gradually phasing out the consultant's involvement over time or establishing clear handoff points where internal teams take over responsibility for key deliverables. Small businesses can ensure a smooth transition and minimize disruption by planning for the consultant's eventual departure from the outset. Training and standard operating procedures (SOPs) are crucial to ensuring lasting success especially for remote teams. Our engagements always include SOPs, training, and offboarding from project-specific work, and our services scale downward as needed when you want to continue receiving advice in new areas but are not yet ready to take on a large project.

When to Hire a Consultant

Given the potential benefits and drawbacks of hiring consultants, small businesses must carefully consider when and why to hire external expertise. Here are some situations where hiring a consultant may be particularly valuable:

When You've Already Tried to Solve the Problem Internally

If you and your team have been struggling with a particular issue for some time and have yet to make progress, it may be time to bring in outside help. A consultant can provide fresh perspectives and expertise to help break through the impasse. For example, if your marketing efforts have plateaued despite your team's best efforts, a marketing consultant could offer new strategies and tactics based on their experience with similar businesses. They might identify overlooked opportunities or suggest innovative approaches your internal team hadn't considered.

When the Decision or Project is Too Important to Leave to Chance

Some business decisions or initiatives are simply too critical to the organization's success to leave to trial and error. In these cases, hiring a consultant provides expert guidance and support to drive the best possible outcome. Major decisions like entering a new market, launching a significant new product line, or undergoing a merger or acquisition are vital areas where past experience plays a significant role in the success of the initiative. A consultant with specific expertise in these areas can help you navigate complex processes, avoid common pitfalls, and maximize your chances of success.

When You Need an Objective, Outside Perspective

When you're involved in the day-to-day operations of your business, it can be challenging to see the forest for the trees. A consultant can provide an unbiased, external viewpoint that can help identify blind spots or opportunities for improvement, especially when dealing with sensitive issues like organizational restructuring or internal conflicts. An outside consultant can offer impartial insights and recommendations without being influenced by office politics or personal relationships within the company.

When You Lack Specific Expertise or Experience

Small businesses often lack the in-house expertise to tackle unforeseen challenges or pursue new opportunities. Hiring a specialized consultant can fill these gaps and provide the necessary guidance to succeed. For instance, if you're looking to implement a new ERP system but don't have an IT specialist on staff, a technology consultant can guide you through the selection, implementation, and optimization process. Similarly, if you're expanding internationally but lack experience in global markets, an international business consultant can provide invaluable insights into local regulations, cultural nuances, and market dynamics.

When You Need Additional Bandwidth or Resources

Even if you have the internal expertise to tackle a particular challenge, you may not have the capacity or resources to dedicate to it. Hiring a consultant can provide additional support to keep projects on track and ensure successful completion. They can bring on additional resources to scale operations for time-sensitive projects or when your team is already stretched thin. A consultant can take on specific tasks or manage entire projects, allowing your internal team to focus on their core responsibilities while still moving essential initiatives forward. In operations planning, being able to "squash the wave" of resource strain as it travels through your process pipeline helps keep teams happy and effective as they can focus on their work at a realistic pace instead of heading towards burnout. Using a consultant and their resources to scale operations when needed is the perfect time to call in support. Don't wait too long, though, or the onboarding timeline may not align with the chance to balance the workload before it's crushing the next team.

When You're Looking to Accelerate Growth or Change

If your small business is looking to rapidly expand into new markets, launch new products or services, or undergo significant organizational change, a consultant can provide the strategic guidance and support needed to accelerate the process. Consultants bring best practices and proven methodologies from their work with multiple clients, which can help you avoid common pitfalls and achieve results more quickly. They can also provide temporary leadership or project management during transition periods, ensuring that your growth initiatives stay on track even as your organization evolves.

Leveraging Consultant Expertise: A Catalyst for SMB Success

Ultimately, hiring a consultant should be based on a careful assessment of your small business's needs, goals, and resources. By weighing the potential benefits and drawbacks while considering the specific situations where external expertise may be most valuable, you can make an informed decision that helps drive your business forward. Consultants bring a wealth of knowledge, an objective perspective, and cost-effective solutions that can help small businesses overcome challenges, develop strategic plans, and implement changes effectively.

From solving specific problems across various departments to providing strategic planning and hands-on implementation support, consultants offer a range of services that can drive significant improvements in performance and efficiency. Real-world examples demonstrate how consultants have helped businesses streamline processes, increase productivity, and substantially grow. However, it's essential to consider the potential downsides, such as cost concerns and the risk of dependency on external expertise. Small businesses must carefully assess their needs, goals, and resources to determine when and why to engage a consultant.

By strategically leveraging consultants' expertise, small businesses can navigate obstacles, seize new opportunities, and position themselves for long-term success. With over 15 years of experience meeting and exceeding client goals, Universal Creative Solutions exemplifies how effective consulting can add substantial value, helping clients achieve measurable results and build internal capabilities for sustained improvement. We offer free estimates that outline the work and expected value so you can be confident that our work will help your organization succeed.