How is SMB Consulting Different Than Other Types of Business Consulting?
Discover how small business consulting differs from other services and when you should consider outsourcing a consulting partner.
While swathes of the American economy seem to be dominated by large enterprises with thousands of employees, the reality is that 99.9% of American companies have less than 500 employees and are categorized as small businesses. The competition at this level is fierce, with established companies and newly established start-ups alike often forced to establish and maintain competitive advantages under the most demanding of market conditions.
Whereas large organizations have the revenue streams and manpower to throw at challenges that might arise, small businesses and even medium businesses often rely upon an ever-changing landscape of competitive technologies and strategies to face those same challenges. More often than not, though, smaller organizations are discovering that tech tools and the latest planning methods alone aren’t enough, and it becomes necessary to supplement a skill or resource gap with the assistance of a consulting partner.
In this discussion, we will explain how small business consulting differs from that performed at enterprise-level organizations. Once we’ve differentiated the small business consultant approach, we’ll break down the different business functions small business consultants cover and when you should consider bringing aboard those different types of consultants your organization might need to bring aboard to help meet the needs of your business.
The Purpose of SMB Consulting Services
Whether a consultant is catering to an enterprise-level organization looking to streamline supply chain issues or helping a small flower shop owner improve its accounting practices, the overall goals of the consultancy are the same. Consultants work for professional services that specialize in providing experts to support a client’s business. Their goal is to improve operations and supplement a client’s leadership acumen relative to operations and product or service management in order to maximize profitability. This can be accomplished through the introduction of new staffing structures, coaching leadership to adopt improved management strategies, or showing teams how to better leverage technology in their favor.
When large corporations reach a certain level, consultancy becomes a practice in helping the enterprise organization improve its enterprise resource planning (ERP) strategies. This is accomplished by an enterprise-level consultant coordinating a team of consultants who are brought in to identify inefficiencies and gaps across and between departments. That team of experts then work together to map out organizational-level improvements and the lead consultant would then work with leadership teams to implement systemic improvements. The focus at this level of consultancy is streamlining operations and maximizing efficiencies.
Small Business Consultancy
In many cases, large corporations and enterprise-level businesses have all of the assets they need to support their continued growth, so consultancy can be focused on systemic improvement. For small businesses, on the other hand, consultants are often brought in by business owners who have reached a point where the organization can no longer “do more with less,” and instead must focus on objectively identifying opportunities within the infrastructure to expand and grow the team’s expertise. Small business owners are in a very unique position relative to CEOs and presidents at larger organizations in that SMB owners are often challenged by being too close to operations to see the big picture. By bringing in a consultant, small business owners are bringing in a trusted set of eyes to give input on what the organization is actually capable of, and where an owner should focus on building out expertise in order to continue to grow.
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Signs You’re In Need of a Consulting Firm
Throughout the discussion to follow, we’re going to discuss the solutions consultants bring to the table and the problems they help to solve, but we should also spend a bit of real estate up front on specific indicators of when you should consider bringing a consultant to the table.
Losing Traction and Stagnant Initiatives
Regardless of how long you’ve been in business or how efficient your initial business model was, you’re going to reach a point in your business developing and evolving where sales will drop off or flatten out. The strategies you have in place might not be built for your current state, and it will be necessary to work with a consultant to redefine what success looks like and reimagine your goals.
Your Team is Missing the Skills Necessary to Get Paid
As a small business owner, you’ve assembled a team that can handle the startup phase and the uptick in initial growth, but at some point, your team will be challenged in ways that surpass their current skills and proficiencies. Consultancy can open doors to skills and business acumen to get you through times where your team cannot handle the workload until you’re able to expand your staff in order to meet the business demands.
Disaster Events and Navigating Crises
Day-to-day operations might be your comfort zone, but not every business owner has the experience and knowledge necessary to navigate disaster events or understand the steps that must be taken in the wake of a cybersecurity attack, loss of operating capacity due to a natural disaster, or other crisis events. Consultants are able to provide best practices to be proactive as well as responsive in the wake of such events.
Common Pain Points Covered By Small Business Consultancy
Small business owners and entrepreneurs getting a startup off the ground often have a wide range of skills they bring to the table. When building out their teams, there can often be a lot of overlap in the beginning, with a team’s marketing expert also having experience with bookkeeping, or the sales manager also having some skills in IT systems management. While this can be cost-saving while getting the business up and running, it can be prohibitive to later growth. The full-time consultancy team approach often embraced by larger businesses can also be out of reach for many small businesses, and that’s where the small business consultancy model provides value to smaller teams with a limited budget. Small business consultants generally focus on key tasks, and can often be mixed and matched to find the best value and path forward for the organization.
Business Development and Strategic Planning Consultants Pave the Path Forward
Every successful business starts with an effective business plan. While a small business might launch with a business plan in place, evolving business needs and growth will eventually necessitate a review of that plan and a revision of the path forward. In order to determine where opportunities lie in a small business, it’s necessary for an owner to first meet with consultants focused on restructuring your approach and infrastructure.
Business Planning and Development Consultants
Different industries and goals require small businesses to adopt a range of small business models. As your business grows, evolves, pivots, and matures, it might come to pass that the business model you launched with isn’t the right one to support the business you’re running, and you may or may not even have the experience and skills necessary to recognize and act on that fact. A business planning and development consultant can assist in building out or evolving your existing business plan and provide you with a roadmap for transitioning your business model.
Business Strategy Consultants
Alternatively, you might be in a situation where your small business is struggling to grow and mature. It might not be clear from the operations point of view of a small business owner in the trenches where best to expand your services or product line. A business strategy consultant can assess your current state, and help to identify where and how to grow and develop your business or create strategic partnerships in order to pave the way for growth.
Consultants Prepare Your Organization to Evolve
Once you’ve established a strategic path forward via consultancy, you might have a need to lay the groundwork for evolving by bolstering certain interdepartmental competencies. While you might have departmental needs covered, you might not want to burden your team by adding tasks and oversight in two key areas, areas where consultancy can absolutely provide the necessary support to execute change.
Data Analytics and Reporting
While the initial consultation might have given your team guidance on how to grow, every business decision must be based on actionable data. And you need methods for compiling and interpreting that data in order to make informed decisions at the leadership level and determine the next steps. That’s where specialists in data acquisition and forecasting can help track the ROI of your current efforts as well as the impact changes might have on your bottom line profitability and key performance indicators (KPIs) along the way.
Project Management Consulting
Data informs action, and the goal of consultancy is to help support the necessary changes and evolution of your organization. A plan is a great thing to have, but your team might not have the bandwidth or expertise to execute that plan. That’s where a project management consultant can be brought aboard in order to spearhead the change management process and help guide your team through the steps necessary to transform your organizational business model or launch new products or services.
Operational Consultants at a Department Level
Once your organization has been given direction by strategy-focused consultants and you have the guidance of a project management consultant, you’ll be able to determine which departments need additional resources or personnel in order to successfully execute those projects. There are certain key departments and business functions that would benefit from such support and bolster other activities necessary to continue to grow and expand.
Whether you’re a service-based business or your business depends on product sales, you’re going to have accounts receivable and accounts payable to manage as you juggle invoices from vendors and incoming cash flow. Improving your billing methods can maximize your cash flow and increase your ability to leverage available on-hand cash into the resources and vendor agreements necessary to support growth and expansion. A consultant is often also well-versed in tax laws and regulatory reporting requirements, helping your business to avoid unnecessary fines. A talented and experienced accountant can also help analyze expenses and identify opportunities to streamline and improve business practices to minimize business costs.
Startups and small businesses often start out as small-scale operations run by partnerships and professionals with close ties. This can mean that the initial framework for human resource management and hiring and recruiting practices can be limited in scope. As you bring aboard long and short-term employees to supplement your existing staffing levels across departments, you’ll need a solid-state and federally-compliant policy in writing for recruiting, training, benefits, and retention.
Unless your organization is in the business of providing information technology support to clients, it’s suggested that you secure the services of an IT consultant and managed services provider to handle your tech stack and IT support infrastructure. This frees up significant resources and manpower for other departments and helps to maintain your vital data and records. An IT consultant can also ensure you’re using the right tools for the workload at hand and to help evolve those tools as your business grows, leading the way for your organization’s digital transformation.
Marketing and Advertising
When you built your small business or launched your startup, you had a product or service in place and your entire goal was to create awareness and demand for what you had to offer in order to create a strong base of initial customers. Chances are in the beginning that you invested heavily into advertising and marketing services, maybe even handled some of that at the onset yourself, depending upon your skillset. As your business grows and evolves, so too must your marketing efforts and advertising strategies. There will be a point that regardless of your background and skill set, you’ll need to involve a marketing consultant to help build out and evolve your annual marketing strategy and maintain the schedule as your core team focuses on client management.
Sourcing and Pricing Out Cost-Effective Consultants
The challenges of owning and operating a small business throughout the COVID pandemic have left even the most talented and resilient leaders scrambling for solutions and a need to reinvent their brands to meet the ever-changing needs of an uncertain and destabilized customer base. As more professionals strike out on their own, the growing demand for small business consultancy is only going to continue to grow and evolve. Understanding your business and having the willingness to accept that it’s necessary to fold consultants into your ongoing business development strategy is the first step in repositioning your brand for sustainable growth and success. To learn more about different types of consultants and how they can help your brand, visit the UpCity Business Consulting listing.