Working with a Business Planning Consultant
What to expect from The Advisory Firm's Brett Galvin

It's smart to pinch pennies when you're starting or running a business, and that often means taking a do-it-yourself approach to new tasks. When you're business is more sizable, you need to get serious about your decisions - it's time to spend the money to hire a pro.

Outsourced business planning provides a number of long-term benefits:

Focus on your core business. Every business has limited resources, and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly.

Level the playing field. Most small firms simply can´t afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act "big" by giving them access to the same economies of scale, efficiency and expertise that large companies enjoy.

Increase efficiency. Companies that do everything themselves have much higher research, development, marketing and distribution expenses, all of which must be passed on to customers. An outside provider´s cost structure and economy of scale can give your firm an important competitive advantage.

Reduce labor costs. Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees don´t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.

Start new projects quickly. A good outsourcing firm has the resources to start a project right away. Handling the same project in house might involve taking weeks or months to hire the right people, train them and provide the support they need. And if a project requires major capital investments (such as building a series of distribution centers), the startup process can be even more difficult.

Reduce risk. Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions and technologies all change very quickly. Outsourcing providers assume and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise.

Control capital costs. Cost-cutting may not be the only reason to outsource, but it´s certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make your firm more attractive to investors, since you´re able to pump more capital directly into revenue-producing activities.

Bear in mind, however, that you're putting the health and safety of your business in those pros' hands -- so you'll need advisors you can trust.

These tips will help you get the guidance you need:

Does the advisor offer useful advice on how to operate your business?

Is the person easy to reach?

Do you feel like an important client?

Does the advisor appear to be an expert in the field?

Do you trust the advisor?

Glowing recommendations aren't enough; you also need to feel comfortable with the person you hire. Take the time to work through the business cases presented to you, following these guidelines:

Ask about direct business experience. Ideally, you'd like an advisor who has worked with a larger competitor to your business. This is particularly important if your business is subject to special laws -- such as rules governing farms or firms whose workers are involved in dangerous occupations.

Find out if the advisor specializes in the services you need. If you only need a lawyer to help you incorporate your business, hire someone who has helped a lot of firms incorporate.

Remember that service counts. If the candidate seems rushed or takes calls during your meeting, you should be concerned.

Look for evidence of foresight. Ask each professional to talk about problems your business might encounter and the ways they would address such difficulties.

Get referrals. Seek referrals from other business owners.

Test for communications skills. Find out how well the advisor can explain things to you. For example, you might ask an accountant to discuss a complex piece of the tax code, or ask a lawyer to review a law that governs your firm's activities.

Discuss cost. If you only need a professional for a limited job, is there a flat fee? Does the advisor bill by the hour? Precisely what will you get for your money?

Ask about their insurance. If your advisor makes a mistake that costs your business money, the advisor's insurance might cover your loss. Lawyers should carry malpractice insurance, and accountants should carry liability or errors and omissions insurance.

Q. I've hired independent consultants to write my business plan, but I'm not sure how to communicate the proper information to them. Any ideas?


A. No one should just write a business plan. A plan needs to reflect and create a carefully thought-out business strategy for growth and profitability. To that end your business-plan consultant needs to work with you to develop and refine your business strategy. They need to be a sounding board and play devil's advocate. They need to meet with you several times to learn, think through, and discuss your marketing, financial and operating strategies. Nothing beats face time in developing a solid plan.

For further information get in touch with The Advisory Firm admin@theadvisoryfirm.com

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