Startup Consulting - Is it worth it?
Startup consulting is a widely contested aspect of running a successful startup. Some swear by hiring a consultant to help you out while others will waste no time in pointing out the possible disadvantages of doing so. Having said that, is startup consulting worth it?
Startup consulting is a great option for up and coming businesses to get help and advice from a professional and steer themselves in the right direction. On the other hand, there are potential issues when it comes to hiring a startup consultant such as price and lack of familiarity with the company. Many factors need to be considered and mulled over to come up with an accurate answer for you and your company.
In this article, we will try and make the process of deciding on whether or not you should hire a startup consultant a bit easier by describing some of the pros and cons of startup consulting. Towards the end, we will also tell you how we, the PGN, can help you if you have after all decided to try out startup consulting.
However, before we get to the list, we must address one fundamental question.
What is a startup consultant?
This question is important to ask as consultants differ from freelance contractors and mentors or coaches. People mix them up far too often and it is for that reason that we have decided to put in this section and help prevent any misunderstandings.
A startup consultant is someone who is brought into a startup for a short-term period to help move some aspect of the company forward. They are not part of the company per se, but an outside expert who needs to be compensated for their knowledge and assistance.
With all that out of the way, we can get started.
They are not an employee
Although it might puzzle you at first as to why this is an advantage, the fact that startup consultants are not part of your company is actually a good thing. Why? Well because you do not have the same responsibilities towards them as you do towards your employees. You do not need to pay for overtime, issue pay stubs, or deal with other administrative tasks. Sure, health and security in the workplace are still important but one would hope you will be providing that anyway.
You are also not obligated to keep them around for any length of time. Once you feel a consultant is no longer needed, you can let them go and either continue on your own or hire someone else. Of course, if it turns out that they were, in fact, a good consultant and you could use more of their services, there is nothing stopping you from extending the contract.
They have experience
Most startup consultants worth their salt are people who have quite a bit of experience successfully running startups. If they do not then they are probably not the best person to hire.
A good startup consultant will be able to utilize their rich experience to help move your company along. They already know the possible obstacles and pitfalls which you and your startup may face and thus can serve a guide to help you successfully traverse the path forward. They can often come up with solutions that have never even crossed your mind, and in doing so potentially save your company.
Their experience also means that they probably have a network of contacts (perhaps even important friends) who can be useful to get in touch with.
Overall, this means that their presence and guidance will give a more concrete reality to your dreams, goals, and plans, making them more attainable.
They can provide unbiased feedback
One of the best things about bringing on board someone who fundamentally is not part of your company is that they can provide unbiased insight into your decisions and practices. Far too often our evaluation is compromised by emotion and not enough distance from the situation. Just as we are poor judges of ourselves, we are sometimes poorer judges still of our businesses.
A trained expert consultant can take an objective look into your situation and give you advice on the right steps to take so that you can easily move forward. They can also review any plans you might have for the future and give their two cents as to whether or not they are likely to work.
They are not an employee
But… did we not just write above that this is a pro? Well, yes and no. Like many things in life, this characteristic of startup consultants is both good and bad. The reason why it might be considered a negative is that in the same way that you have no obligations to them when it comes to things like paying for overtime, they likewise have fewer obligations to you in many categories.
A freelance consultant will most likely be working for several organizations at once, and will thus have their attention scattered. This might lead to them not being always up to date with your particular business and paying less attention than someone who is riveted to it. Most of the time this will not be a problem as they are professionals and will do their best to provide quality service, but it is something to think about.
Of course, if you pay them well enough and utilize their services constantly, odds are they will be working exclusively for you. This, however, is a somewhat rare state of affairs as because their services can get very expensive which brings us to the next point.
Their services can get very expensive
Although startup consultants are not full-time employees and you do not need to pay them all the time, even their short-term services can be quite expensive for a small startup to afford. Daily rates for expert consultants can range from hundreds to thousands of dollars, which is very steep.
Furthermore, paying a consultant does not mean that they will have a solution for you. What if you pay a hefty sum of money only to find out that they do not know how to help you at the moment? As such, you should always make sure you are careful in who you hire for a consultant. They are quite the investment.
They may not have the answers you need
As we have mentioned above, it is entirely possible for a startup consultant to not have the answers you need. They may be either completely stumped by the situation or they might propose solutions that end up damaging your startup in the long run.
The causes of this problem vary. It is possible that, although a consultant bay try to fix every problem you present them with, they simply may not have the expertise to have insight in some areas, or they may not be able to deal with certain new technologies. Alternatively, while they may have the expertise, they might have overlooked some key element because of their attention being scattered between several jobs.
If you want to protect yourself against financial loss in these situations, then having a good contract will help. However, nothing will get back all the time you wasted looking for and working with that particular consultant.
So, assuming that the cons section did not deter you too much and that you are still very much interested in finding a startup consultant, you will no doubt be curious about how to find quality candidates. This is important because, as you have probably noticed, hiring the right consultant will take care of most of the cons.
We at the PGN focus on connecting innovative solution producers with those who need them (buyers). We also have a network of local consultants who are more than ready and able to assist both experienced companies and startups. Therefore, if you are looking for quality startup consultants, we are the right people to get in contact with.
Startup consulting is an interesting field that one has to carefully traverse. On the one hand, the experienced expertise of consultants cannot be ignored and can really help a struggling up and coming company. On the other, the lack of integration with the company and high service costs can be an obstacle in some situations.
Nevertheless, if one is intelligent in choosing who they hire and focus on establishing a good relationship, there is no reason why that collaboration is not going to be both pleasant and fruitful. Likewise, while we listed some general tendencies, keep in mind that every consultant is a person for themselves and may come with their own set of pros and cons.
And, let us not forget that if you do decide you want to try working with a startup consultant, we at the PGN are a great source of quality consultants. Get in touch with us and let us see what we can do.