Small business guide to using a consultant

Businesses of all sizes may benefit from working with consultants who can help with many aspects of running a company, such as project management and delivery, strategy implementation, operational improvements, and growth facilitation.

Using external business consultants has become a popular way to help business owners address and solve problems.

In 2021 UK consulting increased by 18%, up from 4.5% in 2020.

UK businesses spent over £14 billion on using consultants in 2021.

What is a consultant?

Consultants are industry experts who can provide firms with advice and support that the company might otherwise lack.

They work either on a short-term or longer-term basis.

Consultants are often individuals with specific experience in one area, though you can also hire a team of consultants to advise you across various aspects of your business, including:

• finance
• operations
• human resources (HR)
• management
• IT
• marketing.

How can a consultant help your business?

Consultants can help your business in various ways, including:

Business transformation

Consultants can deliver change by evolving your business's processes, structure, and technology.

This can involve helping reshape how a company operates, the market it serves, and the products or services it delivers.

This might be through organising workshops or designing new approaches to aid efficiency in your working practices.

Strategic planning

A strategy consultant can help your company by using their industry expertise to evaluate opportunities and risks to your business, and then advise your company on its future direction and goals.

This allows you to get an outsider's perspective on your business, which can help identify the path to take your business.

Product development

Consultants can help a business identify customer needs, market trends, and technology innovations that may result in new products and services.

Experts can help through the development of new products, from ideation to prototyping and taking a new product to market.

Sales and marketing

Consultants can help develop and implement marketing strategies to encourage business growth.

This can include pricing strategies, establishing key performance indicators, analytics and reporting, and helping determine campaigns for channels such as social media, pay-per click advertising, or events-based marketing.

Supply chains

Consultants can help refine your supply chain from planning, purchasing, manufacturing, and distribution.

Consultants can introduce strategies to help reduce costs and minimise inventory, improving the efficiency and pace of your supply chain.

Some consultants may specialise in finding and contracting suppliers, helping assess potential suppliers for capability and compliance.

A secure supply chain is an essential aspect of the health of any business.

Read our guide to reviewing your supply chain.

Benefits of using a consultant

Consultants might seem a costly option.

Independent, individual consultants are often cheaper than engaging a consultancy firm, but both can bring benefits to your business.

Benefits can include:

Outsider perspective

Offering a fresh view, an external consultant may be able to identify any hurdles restricting efficiency or opportunities for growth that may not be visible when you're close to the day-to-day running of your company.

Expertise and experience

Consultants include specialists who have acquired expertise from previous projects and throughout their careers.

They can deploy their expert knowledge, experience, and skills focused on your business's specific task or project.

They can help avoid expensive and time-consuming errors that could result in making an ill-informed decision or assumption about your business, suppliers, the market, and its customers.

Cost-effective

Hiring a consultant can be a short-term expense with longer-term benefits for your business.

Consultants can pinpoint inefficiencies and implement strategies to reduce waste and time within your business.

Hiring a consultant can be more cost-effective in many cases than employing a permanent staff member, as they are typically employed on a short-term basis without incurring overheads such as staff pensions or requiring equipment for work.

Time-saving

Consultants may help you save time on decision-making by providing you with expert knowledge and industry insights, helping your business react more quickly to market changes or opportunities.

This way, you can make decisions more efficiently and effectively, resulting in products being quicker to market than competitors, for example.

Industry insights

Some consultants are focused on immersion in trends and developments within an industry, such as market trends or new compliance regulations.

They may be experts on specific sectors or able to provide insights into new developments such as cryptocurrency and blockchain, helping your business understand opportunities and challenges.

Employee upskilling

Consultants don't have to work in a vacuum, and there can be an advantage in embedding them within teams.

Employees can learn valuable skills from consultants, either informally through shared working or more formally through structured training, coaching, and mentoring from a consultant to employees.

Looking to grow your business? Read our guide to business growth.

How to find a consultant

Finding the right consultant to suit your business needs is essential.

It can be a good idea to start by considering the expertise your business requires and the scale of the project you need support with.

You can look for recommendations from other businesses that have used consultants or consider talking to a consultancy firm or network.

Individual consultants

Individual consultants often have the expertise to help smaller companies focus on specific areas of the business that need addressing.

They are usually hired for the duration of a project or task.

Individual consultants may advertise their services on consultancy network sites, which can be a more affordable option than going through a consultancy firm.

Small or boutique consultancy firms

Smaller consultancy firms typically have a limited number of consultants covering a range of skills, experience, and expertise.

They may focus and specialise in specific areas, such as IT, accounting, or HR.

They may be focused on supporting local businesses or companies within a particular sector, such as retail or telecommunications.

Large consultancy firms

Larger consultancy firms with teams of consultants may suit larger businesses facing complex industry challenges.

These tend to be the most expensive way to hire consultants, but you may get access to a highly skilled pool of global expertise.