As a business moves through its life cycle, there are times when it makes sense to engage consultants to bridge the gap between the company’s existing human capital and the skills needed to make a strategic leap. Enterprises that experience successful consulting relationships excel at what I call the 4 Exceptionals.
- Exceptional at knowing when your company’s resources are mismatched to the strategic need at hand and finding a consultant that bridges that gap.
- Exceptional at keeping consultants focused on performance metrics.
- Exceptional at integrating consultants into company culture and goals.
- Exceptional at negotiating favorable and easily terminable agreements with consultants.
When selected and managed skillfully, consultants are a great way to add instant expertise and objectivity to your organization, while freeing up owners and employees to focus on core activities.
Here is a snapshot of the consultants that emerging and maturing businesses will hire as they grow.
For a start-up:
- Accountants are needed to record transaction data and transform that data into financial statements for business and tax planning.
- Lawyers can support entity selection, formation and capital raising.
- The specialized nature of commercial real estate means a commercial real estate broker is essential to finding the right office and warehousing to meet your needs.
- In order to have a professional web page, a web designer will likely be hired.
- Your intellectual property and licensing will need to be protected by a lawyer specializing in IP.
- As you add employees, the complexities of payroll and workforce management can quickly overwhelm. Engaging HR and payroll support makes sense.
As the business burgeons ($5 – 100 million), add a few more consultants:
- Litigation is an unfortunate and expensive possibility. While it is usually best to avoid the courtroom, lawyers specializing in litigation are invaluable when you need them.
- Expanding into new markets or protecting existing markets can be eased by lobbyists or other government affairs experts.
- Mezzanine financing and IPO support require the expertise of a securities lawyer.
- Investment bankers flesh out acquisitions, a corporate sale or an IPO.
- Adequate D&O, CGL, BOP or other insurance coverage can be difficult to compare and evaluate. Risk management consultants can streamline the process of assessing risk and ensuring that you are protected.
- Keeping your retirement plan in compliance will require a third-party trust administrator.
- A “Big 4” accounting firm gets hired in order to lend additional credibility.
- An M&A lawyer is needed if you want to explore acquisitions or sale of the company.
As the business matures, and continues to grow ($100 m – $1 billion), so does the expertise required.
- Lobbyists continue to be useful to provide political cover and to support additional expansion.
- Additional auditors/accountants/investment bankers are needed to provide fairness opinions, due diligence support, analysis and support for bond issuances, etc.
- More litigators are hired as issues arise in various states and countries in which the company does business.
For nearly 20 years, I’ve been finding, hiring, integrating, managing, and firing all types of consultants. I’ve enjoyed many successful consulting relationships and a few failures, with lessons learned, noted, and distilled along the way. Many of these same consultants have been absolutely central to the successes I’ve enjoyed during my career, and more importantly that of the companies I’ve been honored to represent.
The rest of your company’s life will involve hiring lots and lots of consultants. So what’s the trick behind ensuring the 4 Exceptionals? Call me, and let’s talk.
© 2016, Endurance Strategies Group, LLC