A startup consultant can assist your company in increasing its visibility, reputation, and revenue by conducting a thorough investigation of your targeted markets, competitors with similar business models, and marketing tactics, and delivering a concise report that will be beneficial to your e-commerce business.
Startup consultancy is the activity of providing professional, responsible third-party advice, experience, and support to business executives with the goal of improving the company’s performance.
They are different to mentors as well!
Who Are Startup Consultants
A startup consultant is an individual with the knowledge and experience to advise you on what to do and put your strategy into action, saving you money, time, and frustration. Outside professionals who can conduct the task as well as provide training on what has to be done are needed by startups. Business consultants can examine your business plan, compare it to your objectives, and make changes or recommendations.
Consultants can assist any company at every level of development, including small business startups. From small startups to well-known giants, everyone benefits from experienced advisors. IT consultants and HR consultants are only recruited on a temporary basis and are not part of your business team. Startup consultants, on the other hand, will work with you until you are ready to go it alone.
Why Do You Need A Startup Consultant
What can a startup consultant do for your business? Entrepreneurs who have a business idea but lack the skills, resources, or experience to drive their concept forward benefit greatly from business advisors for startups. When employed for the proper reasons, business consultants can be extremely beneficial to startups.
- Unbiased Feedback. Most startups operate with the company’s current personnel, experience, knowledge, and skills while ignoring external changes. Receiving honest and unbiased comments may be extremely valuable to entrepreneurs, and this is where the function of a startup consultant becomes critical.
Startup consultants can provide a much-needed outside perspective on the startup’s processes and basic model. The startup will receive input on not only the business’s concept, but also the specifics of execution, organisation, and other crucial issues. - Market Research. Your startup consultant will conduct a thorough study on the market and the market segment in which you intend to expand your company. Market research is one of the most important instruments for making strategic company decisions. Market research data includes, but is not limited to, information about your customers’ demands, your competitors’ capabilities, and industry trends.
Professional startup consultants are known for their ongoing examination of market trends and dynamics, which means they are aware of changes and advancements in various industry sectors and will inform you of any promising opportunities they come across. - Expertise. A startup consultant brings in the necessary information and experience for a company that may be beyond the current expertise of the company’s existing skill. A startup consultant is regarded as an expert in his field of expertise, with extensive training and understanding of the most up-to-date methods and techniques for growing a company. Startup consultants are also engaged when you don’t have access to mentors or their expertise. These consultants also come with their specific area of expertise such as IT development, artificial intelligence and more than mentors may not be able to help your startup with.
Only a competent startup consultant can assist you with business growth, which entails a number of duties and processes aimed at discovering and implementing growth prospects within and across firms. - Management Advice. Startup consultants’ experience and advice can be applied to many various aspects of your firm, and they provide a variety of consulting services. The majority of people who operate startups are relatively young, have MBAs from top business schools, and have chosen to work for themselves rather than for someone else. The people in charge of running these businesses can thus be expected to be lacking the requisite managerial experience or knowledge to steer the venture in the correct director, because of obvious handicaps, like young age and little or no experience.
A startup consultant can offer management advice to a young, relatively inexperienced CEO who is just learning to navigate his business through the business executive world based on their knowledge in management, finance, strategy, marketing, and development. Working with an experienced professional who has gone through the process numerous times provides insight and clarity to the client.
When Do You Need A Startup Consultant
Amongst many others, there are a few signs that may indicate that your business requires the assistance it needs from a startup consultant or a professional. Below are some of the indicators:
- You prepared a fairly sound business strategy, but once your company is up and running, it looks to have faults. You’re not getting the expected outcomes as quickly as you’d like.
- You have no idea what’s causing the slower-than-expected growth, and you need to figure it out as soon as possible.
- What number of startup consultants do you require? This is determined by the kind of your company and your background. Freelance job forums can show you how many services are available and help you figure out what your company needs.
What Can A Startup Consultant Do For You
The trick is to figure out what past-founders-turned-consultants excel at and what goes beyond startup consulting. This section discusses on what an independent business development consultant can accomplish for your startup.
Provide A Fresh and Educated Advice
Every previous founder has collaborated with developers on their own projects. Good former entrepreneurs prioritised maintaining those relationships during the crises of their own business failure, which eventually reinforced them. This is a fantastic opportunity for you to connect into the professional network of your business startup consultant. This lets them quite simply learn from their own mistakes and provide you with an alternative solution or the next best way to conduct business processes.
Their own bad experiences also enable these consultants, who are also former founders, to see when things are going wrong early enough – which could be beneficial to you.
Define The Scope Of You Minimum Viable Product
You should start small and fast so that you may obtain customer input quickly and iterate from your fundamental concept to something that your customers genuinely require. All you need at first is a small, concentrated version of your product, with only the most critical features that reflect your business model’s fundamental assumptions. This is referred to as a Minimum Viable Product.
Proper startup consultants can assess your business strategy and advise you on how much functionality is required. They don’t want your product to fail either, but this isn’t a primal dread for them. You can create your own MVP, and then let an experiences consultant tweak and polish it up for you.
Prepare and Review Your Budget Realistically
The cost of building your MVP under ideal conditions is less than half of the total amount you’ll need to spend on development just to verify your hypothesis. The MVP launch is only the beginning of what might be a far more expensive process. Add in marketing and administrative costs, as well as paid services, travel, and so on. Those things may go unnoticed at first, but they will become apparent as work progresses.
As a new founder, you may tend to over or underestimate the amount it takes to run a business. Those who have been there knowing the true cost of the various inputs your firm requires, so you can confidently entrust budgeting to an independent startup consultant.
Networking
Another thing that first-time entrepreneurs lack is experience. Your seasoned business startup consultant, on the other hand, is likely to have far more connections than you think. Make the most of it! Inquire about their acquaintances and use their existing network to connect with the people you need for your business.
Start with customer development, reach out to a new potential target market, and you’ll get more than just good feedback: those people could become your first customers. After that, you’ll need designers and engineers, lawyers (particularly if your startup’s fundamental technology is patented), and human resources.
Below is an overview of a few questions that you, as a startup founder or an executive should be asking your startup consultant before agreeing to work with them.
When You Shouldn’t Hire A Startup Consultant
However, as beneficial as startup consultants might be, they can also be detrimental to a growing company. Early-stage startups, for example, are unlikely to get a high enough return on investment from a startup consultant, simply because the founder is bootstrapping and doesn’t have a lot of money.
One of the main situations or reasons to not hire a startup consultant is when your startup cannot afford to have one. Hiring a consultant is never cheap because they are professionals and provide advice at the expense of their own failure, and are therefore quite costly. Also, they shouldn’t be hired if you already have a mentor working with your startup.
One risk of hiring a startup consultant is that their advice or direction may not be as beneficial as you had hoped. Unfortunately, this can be attributed to either the consultant’s or your own human error. Perhaps they weren’t a good fit for your business. Perhaps they didn’t have as much knowledge as they claimed. Maybe you didn’t take the counsel you were given seriously.
This however should not discourage you from seeking advice from startup consultants. It is important to conduct background research or check into the consultant that you are about to hire, their previous portfolio and experiences as well as their area of expertise. In your early stages, it is not recommended to hire a startup consultant to teach you how to fundraise. Founders should learn this skill on their own as it is one of the skills that investors seek in founding members.
Another pointer to notice when not to hire a startup consultant is when and if they ask for equity in return for consultation. The services consultants offer are usually once-off and not recurring therefore equity should not be offered as a form of payment. It is not ideal to reward the consultant with equity in return of advice.
Conclusion
A consultant with a demonstrated track record to address a business challenge can be employed on an hourly or contractual basis and is usually a professional with knowledge in a specific area. Consultants are typically brought in to deal with an impending crisis in the business, looking deeper into the symptoms that are affecting the company and assisting the customer in determining the company’s path to recovery.
Their role is to look at your company from the outside in, providing objective recommendations on potential trouble spots, risks, and liabilities. Everything may appear to be going well at first, but then questions may arise. Why isn’t your company expanding as quickly as you anticipated? Is it possible that your strategy is flawed?