Sometimes small business owners seek external help to grow and a small business advisor, coach, consultant or mentor can be a good solution. However, buying good quality and good value external help can be tricky.
With over 80 small business consultants based in Hertfordshire, and only six of these publishing prices on their websites, how do you make an informed decision? And aside from price, what else do you need to consider?
Here is our ‘Insider’s Guide’ to buying consultancy to help you make the best choice for you and your business.
Free Help
In Hertfordshire there is free or government-backed support available to people who are aiming to start or grow a business.
Wenta (www.wenta.co.uk) and STANTA (www.stanta.co.uk) are enterprise agencies, offering guidance, training and office space. The Hertfordshire Growth Hub (www.hertsgrowthhub.com) offers a broad range of business development services. Via Innovation Vouchers the University of Hertfordshire (www.herts.ac.uk) can provide highly specialised reduced-cost support to business. Enterprise Europe Network (http://www.enterprise-europe.co.uk/) can help businesses to expand internationally.
Cost
Unfortunately cost information is hard to come by for small business consultants. Of the 80 consultants in Hertfordshire, only six of us publish prices on our website.
Of the published prices, what we know is this:
- The cheapest published price that we have found is £34.99 per hour.
- A health check type report costs £195.
- A business plan writing service is advertised with prices from £700.
- A 12-week coaching programme costs £2,065.
- A consultant charges up to £1,500 per day (this figure was shared on a newsletter).
I also know a business coach based outside of Hertfordshire who charges £500 – £1,7000 per month for 1:1 coaching and £195 per month for group coaching.
At Hooke & Co. Business Strategy our monthly rolling programme costs £199 per month including VAT for businesses turning over less than £82k per annum. Our other services are priced at £60 per hour plus VAT.
Pricing Strategy
There are two ways that consultants will describe their prices to you.
Firstly, they may discuss hourly rates or project costs. You can then evaluate these costs against the hourly rates of other professionals, e.g. accountants or solicitors.
Secondly, they may discuss the benefits that they will deliver versus what they will charge you. You logic that will be used is that if the consultant can grow your profit from £50k per annum to £100k per annum then surely it is reasonable to charge £20k per annum?
If the second argument is used with you we recommend a) find out how much time the consultant will give to you (and then calculate an hourly rate) and b) bear in mind that you are not guaranteed to achieve the £50k increase in profit – no one has a crystal ball.
Experience
When it comes to experience, there are two stock answers that consultants tend to use.
Firstly, if the consultant is experienced in your industry then they will list their credentials and hopefully you’ll be impressed.
Secondly, if the consultant has no / limited experience in your industry then they will probably answer along the lines of “The last thing you need is more thinking from . What you need is a fresh perspective!”
There is a percentage of truth in the second answer, but bear in mind that consulting is an unregulated industry, so buyers beware!
Commitment
Some consultants ask clients to commit to buying a programme of consulting, e.g. 1 session per month for 12 months.
For small businesses this can be difficult because you may have a poor period of trading, you may way to cut costs, and you may find yourself committed to buying consulting that you don’t want.
We deliver our services on a pay-as-you-go basis, meaning small businesses can start or stop the work they do with us as their requirements change.
Guarantees
Guarantees are a normal part of everyday life. If you buy a coffee from a coffee shop and there is a problem the coffee shop will re-make your drink or offer you a refund.
There is no reason why consultancy services can be offered with similar guarantees. We are the only consultants in Hertfordshire to advertise a 100% satisfaction guarantee.
Timescales
If you buy consultancy services you obviously believe that improve results will follow. The amount of time needed to generate results will depend on what problem is trying to be solved – complex, larger problems will take longer to solve that smaller quick-fixes. Naturally, no one promises to double your profit in six months because an objective like that will vary from one business to the next.
However, some response times can be measured. From first enquiry, how long it takes for consultants to meet with you and start helping you.
No Hertfordshire consultants apart from Hooke & Co. Business Strategy advertise any information about timescales – how long it takes to go from first enquiry to any kind of tangible results.
