Dictionary.com defines ‘to consult’ as “to seek advice, information from, or to ask for guidance.” Using a consultant properly can add value to your business in a variety of ways. Consultants are primarily considered when one of the following circumstances occur:
- When the needed expertise is not available on staff
- When the necessary staff and resources are not available
- When outside objectivity or perspective is needed
What is the Role of a Consultant?
Understanding the consultant’s role is critical in creating a viable game plan, they should:
- Provide accurate and reliable information. This is the reason you hire a consultant. Choosing the wrong consultant or poorly communicating with the consultant can result in irrelevant information of questionable accuracy.
- Improve your decisions.
The role of a consultant is to supplement your knowledge so you can make better, more informed decisions.
- Offer you new ways of looking at things.
Consultants oftentimes present a fresh perspective and offer new ways of approaching challenges.
Expertise of the Consultant:
Consultants can vary greatly in their level of experience, if they deviate from their area of expertise they start to lose their value.
Ask some important questions:
- Does the consultant’s area of expertise match what you want them to do for you? Have they already done or created what you are looking for?
- What is the consultant’s knowledge of the industry? Does the consultant personally know the industry players? Choosing a consultant who is knowledgeable in our industry will improve the quality of the result and decrease the learning curve.
- Can the consultant show you samples of work performed? Can they demonstrate to your satisfaction that they can get the job done within the time frame promised? Have you talked with past clients to verify results?
Establish Clear Criteria for the Project :
One area that can cause conflict when working with an outside consultant is failing to clearly establish criteria for the project, make sure you:
- Are specific about what you want the consultant to do. Identify key objectives and critical questions you want addressed. Provide as much relevant information as possible.
- What will be the criteria that you will use to measure whether the project was a success or failure?
- Provide a timeline. This will include a timeline for bid submission, consultant selection, periodic status updates and project completion.
The Contract:
Most consultants will provide a contract or letter of engagement. You should include the following in the agreement:
- Specific project deliverables. Identify in depth exactly what you want, this will ensure there is no confusion at a later date. Clearly define everything you expect from this consulting engagement. If it’s not in writing don’t expect to receive it.
- Clearly outline the specific action plan and timeline. This section should address what you want the consultant to do, how it will be done and when it will be done. The report should contain clear, actionable information.
- Specify the compensation arrangement. The consultant may be paid a retainer, project fee or an hourly rate.Whatever your arrangements are make sure they are clearly spelled out in the agreement.
- Create the Proper Relationship. Structure the relationship so the consultant will be considered to be an independent contractor, not an employee.
Other Considerations:
Below are several additional items you may want to consider prior to selecting a consultant.
- Do you want a long-term relationship with the consultant? A consultant who is involved during the development of the entire project may be worth more than one who will quickly disengage from the project. Consider avenues such as alliances, equity positions based on performance, residuals or other financial partnerships with which to solidify their commitment to your project.
- Watch for conflict of interest issues. Make sure they are not working on any other projects what could cause a conflict of interest.
Choosing the right consultant for your project can clearly add value, save you time and money. Follow the outlined steps you’ll make the right decision every time.
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