2016-01-20 13:58:00 Co-Founders, Advisors and Board English Hiring a consultant as a new business might be the wrong way to spend your money. Find out why this is and what to focus on instead. https://d2yxjugd6jl4bj.cloudfront.net/wp-content/uploads/2016/01/08233231/2016_1_14-smalll-am-why-new-businesses-should-not-hire-consultants.jpg Why New Businesses Should Not Hire Consultants

Why New Businesses Should Not Hire Consultants

3 min read

A business in its infancy is a fragile thing. Burn too much cash and you’ll go out of business. Spend too little and you’ll take forever to build a sustainable business. Getting that balance right is key to success, and you need to balance your expenditures as well as your headcount carefully against the time your employees have.

When a new business comes to HireGun looking for a consultant, I’m often reluctant to match them. HireGun is a leads business, and in many ways a new business too. So, why do I sometimes turn them away?

Hiring a consultant usually doesn’t work for new businesses. Here’s why.

Most Businesses Don’t Know How to Grow

In my consulting experience working across a lot of businesses as both a freelancer and in-house specialist, I have seen that businesses often do not know how to grow their headcount to capitalize on the opportunity in front of them. If a strategy with clear outcomes and potential is put in front of an executive, that executive will often not know how to execute on it or give it the resources (e.g. budget, people) needed to make it successful.

Until you figure out how to recruit and retain a great team, you’re not ready for a consultant.

New Businesses Need Doers, Not Thinkers

As stated above, new businesses are fragile. At the beginning of a new venture, everyone working on the venture must dive in and get their hands dirty with whatever is needed to make the business grow. Engineers are going to work on non-engineering things, founders might have to create wireframes and hire designers, and more. You need people who are going to get things done and move as fast as possible to execute on their vision.

Strategy is absolutely necessary, but if you are a new business owner then you have hopefully already tested the idea and know to double down on it and build. Execute on the first steps towards a bigger vision, and don’t saddle yourself with big consulting expenses from the beginning that will unnecessarily put more stress on you and your business.

Good Consultants Are Too Expensive for New Businesses

The best consultants and agencies are expensive. Sure, you can hire someone overseas off eLance for $10 an hour, but their work is likely going to be very subpar. You’ll waste valuable time managing them, following up and testing to see if their ideas are any good.

The average consultant and agency rate on HireGun is $171 an hour, with the average minimum monthly project coming in at $1,185 per month. Do you have that cash to spend right now?

To get started, if you have a little bit of cash, it’s probably better to use Clarity.fm to do calls with entrepreneurs and specialists in the areas where you need specific advice. Once you’ve grown your business to the point where you need help taking it higher, then hire a consultant.

There’s Value in Learning

Finally, as a new business founder, you are going to have a lot asked of you. You are going to be asked to wear many hats and make decisions about areas that you have no experience with. My first piece of advice is to figure out how to empower your employees/co-founders to make decisions so that you do not become a bottleneck for decisions.

If you are going to be the CEO though, you need a wide range of experience. I believe that the best executives are generalists, and they became that way by working many different positions at many different companies. A business owner needs to understand product, marketing, business, some technical necessities and more. By doing things yourself at first—and not relying on a consultant or contractor—you get this valuable experience that will help you hire and manage the right people for your business.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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