“My partner wants to bring in an outside company to help us go forward. I’m concerned. I think we should be able to figure this out ourselves and I don’t know how to decide if this firm is right for us. Any suggestions?”
This question comes from a business owner in Fairfield County, Conn. She and her partner have a healthy, profitable service company with more than 10 employees. While the partners see eye-to-eye on most decisions, the idea of bringing in outside help is causing a lot of tension.
Periodically every small business hits a wall. Revenues can be a few hundred thousand dollars, $1million, $5 million, $10 million, $20 million or more. It’s the Peter Principle. The business maxes out at the limit of its ability, magnified by the behavior of entrepreneurial ownership.
Resourceful to a fault
Building a growing, thriving company is a complex process. Owners have to manage through constantly changing needs and conditions. When it comes to looking at outside resources, deciding what, if and when can be a challenge.
Entrepreneurs are resourceful, self-dependent individuals – to a fault. In order to get the business started, they must possess basic traits. “I’m on it,” “I can make this happen,” “I can make do with what I have at hand,” “Building this company is my responsibility.” These are all statements common to successful entrepreneurs.
These self-reliant beliefs, required to get the business off the ground, sooner or later become self-limiting. In time every owner and company max out.
What the business knows how to do is no longer enough to get it to the next level.
The owners and the company struggle, getting results similar to what they’ve always gotten while hoping for something better. Between the “I’m responsible,” “I’m accountable” self-talk, and confusion about who or what skills to hire, the owners and the business stall.
To get moving forward, the business owner has to ask, “What does the business need? More sales help? Assistance with marketing on the Internet? Better financial controls? More team-building? Better reward system for the current employees? More efficient production?” The list goes on and on.
When a business gets stuck, it’s usually not one thing, one magic bullet, that needs fixing. Lots of little things are slightly off. Small bits of missing information in many different areas can limit the company’s and the owner’s progress.
Seeking solutions
The owners can hire new talent. However, hiring new employees can be expensive, semi-permanent and focused in one area. Additionally, it can be hard to judge at the outset if there’s a good match of talent to need, especially if the company is hiring in a new skill area.
One way to turn this around can be to look for outsiders to help, in smaller doses with less permanence and expense than bringing on employees. There are lots of resources available in the marketplace. In fact, the problem isn’t finding possible outside solutions, it’s determining what will work best for your company.
You can start to seek solutions by interviewing outsiders. Here are some questions to ask:
- Give me an example of your best and worst clients – and explain what makes them best or worst?
- How do you determine if a project is right for your firm and how do you know if you should walk away?
- What kind of diagnostic process do you use to determine if you should take on a client or not?
- What does your firm specialize in?
- What’s a typical engagement like in terms of cost, length of time commitment and outcomes?
- How do you know your work is done and it’s time to exit?
- How do you measure payoffs of your company’s work and how do you relate that back to a multiple of what my company would pay to hire your firm?
If you’d like more information on this topic, email a request for the article: “Five mistakes business owners make when hiring a consultant.”
