Hiring a Consulting Firm: Proceed With Caution

You engage a consulting firm to add skills and help you achieve your business goals. If the consulting firm is going to be successful in their support they need to still be in business 90 days after you sign the agreement. Over the last five years I have seen consulting firms come and go, and the going almost always follows the big announcement of the coming.

This last week I read a press release announcing that Supplies Network hired the former owner of a consulting business, who I congratulate on his new job, but what of his consulting clients? What do they do now? The same day I received an e-mail from the former owner of a consulting practice selling remanufactured cartridges as the director of sales for Virtual Imaging Products—he too apparently deserves congratulations for his new job. Six months ago he put out a press release stating he developed the first internet based MPS training program (Strategy Development has had an MPS sales mentoring program that is internet based for over a year). What if you bought that program? Two months ago Printer Essentials announced the hiring of another consulting firm owner.

Three consulting firms are apparently out of business in the last two months—this is just an example of what I have witnessed over the last five years. The biggest losers in this situation are those companies that engaged these consultants to help them launch their MPS program (they are all MPS consulting firms).

These “flash in the pan” consultants nibble at our prospect client base as well, but whenever we hear that a company hired one of these “Johnnie come lately” firms we simply feel bad for the hiring company. MPS is the most important growth strategy the industry has seen in over a decade and this company is going to get poor advice on making the transition and their “expert” will probably be working for a competitor before the hiring company comes to the conclusion they made an error in selecting the consultant. Worse, they may paint all consultants with the same brush as their short term advisor.

How do you make a decision to hire a consulting firm? The first decision point you have is do you need a consultant or trainer. If you want more information on that decision e-mail me and I’ll send a copy of an article on the subject (callinan@strategydevelopment.org).

Once you make a decision to hire a consultant look at the depth and experience of the consulting team. I would start by analyzing whether they are a firm or an association of independent consultants. If the latter there is a higher probably of them deciding to “find a job.” The other category of consultant that is apt to find a job is the sole proprietor firm. It is difficult to develop business, develop tools, and conduct consulting—and earn a living. You need a team. Make certain the consulting firm has experience in all areas of your initiative. For MPS this means you need back office operations, service, sales, and business planning. Finally, look for tenure; it appears as if most consultants fold in the six to nine month range, although some have made it as long as two years. I would not engage a firm that has less than two years of experience unless it is for a very short term project.

I am an entrepreneur and love it so I would encourage anybody to follow the dream of entrepreneurship if they have that dream. Failure is a necessary outcome of being an entrepreneur: I have a favorite saying that if you haven’t failed you haven’t tried hard enough. Nevertheless, make sure the entrepreneur you hire has a plan and not simply a dream--hire with caution and!