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  { Consulting Myths }



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    There are a number of common myths and misconceptions regarding consulting services for small businesses.  The following list attempts to address each point as it relates to an owner of a small business. 

MYTH #1:  Consulting services are expensive.

MYTH #2:  Consulting services are ineffective.

MYTH #3:  Consulting services are only for large companies.

MYTH #4:  If my [sales | accounting | manufacturing] company has a problem, only someone who is a better [salesperson | CPA | machinist] than me can solve my problem.

MYTH #5:  Consulting services are unnecessary, as my existing [accountant | attorney] can provide all the services I need.

MYTH #6A:  My business is struggling, but I don't have the time to seek a consultant's advice right now. 

MYTH #6B:  My business is struggling, but I don't have the money to seek a consultant's advice right now.

MYTH #7:  The larger the consulting firm, the better the advice.

MYTH #8A:  The higher the fees, the better the advice.

MYTH #8B:  The lower the fees, the better the value.

MYTH #9:  My business is unique and cannot be helped by an outside perspective.

MYTH #10:  Consulting projects never end.


Myth #1:  Consulting services are expensive.

    While the word "expensive" is relative, a consulting project should be viewed as an investment in your business, not as an expense.  As with most investments, you should know what all of the costs will be up front.  Fees should be on a per-project basis, not on an open-ended, hourly basis.  Also, the cost of a project should always be compared to the benefits received.  If a project resulted in increased labor productivity, reduced materials waste, and lower overhead costs that, when combined, added $80,000 to your company's bottom line annually, would a one-time fee of $5k, $10k, or even $40k seem "expensive"?

    How much would you pay to receive an extra $80,000 a year in cash profits?  Chances are, Alton Consulting Group, LLC will charge you much less.  

Myth #2:  Consulting services are ineffective.

    This depends on both the client and the advisor.  As evidenced by the various Industries pages within this site, many businesses have benefited tremendously from my services.  However, not all businesses are receptive to change, and not all who call themselves consultants are competent to advise.

    The Client:  Present in all projects, but particularly poignant in turnarounds, is the need for hard work and a willingness to change.  If you are unwilling to change any aspect of your business, your business will not benefit from using a consulting firm, no matter how gifted the advisor. 

    The Advisor:  If someone comes into your business and tells you nothing more than, "raise your prices" and/or "fire some of your employees," he or she is not a consultant.  A consultant is someone whom you work collaboratively with to find mutually-agreeable solutions to business problems.  There are no magic PowerPoint slides or miracle spreadsheets that will solve all of your business' problems overnight; it takes knowledge, experience, hard work, and agreement (owners, partners, employees, and even suppliers, vendors, and customers) to make changes in a company, and small businesses are no exception.  Anyone who tells you otherwise probably is ineffective.

    During the initial consultation, our task is to determine:  (1) if your business problems are within my realms of expertise, and if so, what would be required in terms of time and resources to solve those problems; and (2) if you and the members of your organization are able and willing to take the steps necessary to improve your business.  Meanwhile, you, the prospective client, are evaluating us to determine if we possess the required expertise to assist your business, and if your organization would benefit from my services.

Myth #3:  Consulting services are only for large companies.

    Companies of any size can benefit from consulting services, but small companies in particular stand to benefit the most.  Large corporations have legions of specialists on their payroll, plus access to external partners.  In contrast, a small business owner often has little other than her own experience and instinct to guide her.  What few employees the company may have are often bookkeepers, welders, machinists, landscapers, roofers, or receptionists.  Rarely does a small company employ accountants, business analysts, logistics specialists, marketing managers, professional sales trainers, organizational change experts, or internal consultants.  Consulting services give a small business owner access to these advanced skill sets.

    Consulting services also provide the experience that comes from working with dozens of small companies who have faced similar problems.  A consultant can bring the best business practices from across the country into your business; expertise that would otherwise take a lifetime to acquire by working in just a single company. 

Myth #4:  If my [sales | accounting | manufacturing] company has a problem, only someone who is a better [salesperson | CPA | machinist] than me can solve my problem.

    If you are a welder who owns a welding shop that already employs ten welders, the last thing you need is another welder giving you advice.  You problem is almost certainly not from a lack of welding knowledge; rather, it is from outdated business processes, poor accounting procedures, lack of controls, organizational conflicts, antiquated performance systems, or a host of other issues.  For these problems, you need a business expert - someone who understands the structures, procedures, and systems required to create and grow a profitable company - not another welder.

Myth #5:  Consulting services are unnecessary, as my existing [accountant | attorney] can provide all the services I need.

    If your accountant / attorney could, why hasn't he yet? 

    Accounting firms are excellent at preparing tax returns, determining depreciation expenses, and advising you on the tax consequences of purchasing new equipment or vehicles.  Accounting firms are not so good at advising you on precisely how to make your business more profitable, other than, "payroll seems too high," or "margins have been shrinking."

    Law firms are needed for most legal matters, such as litigation, contract drafting/review, legal proceedings, estate planning, and tax planning, as well as for their specialized knowledge in highly regulated environments such as aviation, firearms, medical devices, environmental compliance, pharmaceuticals, etc.  With some of us having graduated from law school ourselves, we can assure you that nothing in law school teaches an aspiring lawyer how to run a company profitably.  Instead, the focus is on managing legal risks, the art of reading statutes, and arguing from case law.  For legal questions, consult a lawyer.  For help with business processes, however, you need a professional business advisor (i.e., Management Consultant). 

Myth #6A:  My business is struggling, but I don't have the time to seek a consultant's advice right now. 

    If your business is struggling now, what leads you to believe that you will have more free time later?  If you wait until your business is closed, you will certainly have plenty of time, but there is not much we can do to help you at that point.  As a small business owner, the majority of your time should be spent working on your business, not in your business.  This is particularly true when a business is struggling.

Myth #6B:  My business is struggling, but I don't have the money to seek a consultant's advice right now.

    Similar to the previous myth, if your business is struggling now, what leads you to believe that you will have more money later?  Often, the savings that result from a successful consulting engagement are immediate.  In many cases, Alton Consulting Group, LLC finds annual savings several times the amount of a project's fees.  As a result, a typical consulting project should pay for itself in less than a year.  The question then becomes how many months of additional losses do you wish to accumulate before taking corrective action?

Myth #7:  The larger the consulting firm, the better the advice.

    Large consulting firms generally cater to large corporate clients, not small businesses.  Even if your business could afford the fees, a team of experts from McKinsey Group or Booz Allen Hamilton would likely be unhelpful (to say the least) for a machine shop with 10 employees and $1.5 million in sales.  In a large company, the best approach to solving problems is with more money and more people (preferably lots of highly-focused specialists).  In a small business, however, money is in short supply and the current employees are usually generalists, as each person must perform a variety of functions. 

    If you are a small business owner, you don't need, and can't afford, a team of specialists - you need a "master generalist:"  someone who has experience managing, running, buying, selling, and fixing small businesses, and has worn hats for payroll, operations, accounting, marketing, logistics, finance, sales, and human resources functions (often simultaneously).  

Myth #8A:  The higher the fees, the better the advice.

    While there is often some correlation between price and quality, consider just what those fees are paying for.  A mid-sized consulting firm one of our consultants once worked for had a large corporate headquarters in a Chicago suburb, hundreds of telemarketers, and a large support staff, and their fees reflected all of these overhead costs.  We, on the other hand, do not have all of these costs.  As a result, even though we feel our services are just as valuable (if not more so) with Alton Consulting Group, LLC as they were with the 1000+ employee firm one of our consultants previously worked for, our fees are less. 

    If you are still concerned about this myth, however, we would be happy to increase our fees for you at your request.

Myth #8B:  The lower the fees, the better the value.

    As a corollary to the previous myth, while the highest fees aren't always the best, neither is the lowest cost provider.  You wouldn't choose a doctor to operate on your body based solely on his or her fees, and you shouldn't choose a management consultant to operate on  your business that way, either. 

Myth #9:  My business is unique and cannot be helped by an outside perspective.

    While every industry has its peculiarities, not every business is the special, unique snowflake that its owner thinks it is.  Sound business principles, such as performance-based compensation systems, understanding your customer, cash flow forecasting, budgeting, delegation, tracking customer satisfaction, and inventory management are the same, regardless of industry.  There are some broad generalizations to certain industries, however.  If you are a retailer, managing inventory costs, turns, and GMROII are going to be critical.  If you are a contractor, accurately understanding all of your costs when bidding is essential. 

    Our consultants have worked with 70+ small businesses throughout their consulting careers, and we doubt that your company could not benefit in any way from our experiences.  Referring back to Myth #4, the things that make your business unique are the specific products you offer or the services you perform, and the customer relationships you have established.  The compensation systems, organization structure, accounting systems, sales training, inventory management procedures, and budgeting processes you use should look very similar to those used by other highly successful small businesses, regardless of industry, location, or products.  "Best Practices" are just that - the best practices currently in use.  One of our consultants once remarked, "personally, I have found inspiration for solving one client's problems from some of the most unrelated businesses imaginable" (e.g., a restaurant's approach to marketing applied to a law firm; a fabrication shop's organizational structure applied to a telemarketing firm).

Myth #10:  Consulting projects never end.

    Every project should have a beginning, a middle, and an end, and a consulting engagement is no different.  Before agreeing to work with a consultant, you and the consultant should have a clearly-defined goal or objective of the project.  This goal may be to develop a plan to turn the company around, design and implement a new marketing strategy, or provide a sales training program for your employees.  Without a goal, how do you know if you've succeeded or not? 

    While it is certainly reasonable to retain a consultant for an extended period of time, there should always be clear goals in mind.  Any long-term engagement with the Alton Consulting Group, LLC would likely be the result of multiple projects, all with clearly-defined objectives and timelines, not a single project that went weeks or months beyond the timeframe originally envisioned.



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