How to Choose the Right Consulting Firm [8 valuable steps]| Pipette&Chart
Are you on the fence about whether to get a consulting firm or not? Will it spur your business growth or just result in additional expenditure? Why do 8 out of 10 UK companies hire consultants?
Read on to find out if you need one and how to choose the best firm for your business.
Why Businesses Hire a Consulting Firm
Instead of investing heavily in costly technologies or contingent staff, most businesses employ the services of consulting firms. Consultants are usually hired for their specialized skills and their access to digital tools and infrastructure. These firms provide businesses the expertise and resources they need in a more cost-effective setup.
A survey by Clutch shows that 44% of small business respondents have hired consultants in the past. It also indicates that 29% of those who haven’t hired any have plans to hire one in 2021.
What Do Business Consulting Firms Do?
Business consultancies provide their client management consulting services to help organizations improve their performance and efficiency and delegate the strategic work which does not belong to their team capacity.
What Are Boutique Consulting Firms?
A boutique consulting firm is a firm offering specialized and personalized services, which offers a limited number of services to a specific target market. There are usually fewer than 100 employees, and therefore a smaller number of customers, allowing boutique consultancies to concentrate on every individual customer.
However, selecting the right consulting firm can be a daunting task. Especially if you haven’t worked with one before. There are several factors to consider in assessing which firm can help you achieve your business goal.
To find the right one for your project or for long-term business consultancy, here are some steps you can take.
Steps in Choosing a Consulting Firm
1. Determine the type of service you need.
The kind of consulting service you need depends on the issues you need to resolve. So the first step in choosing a consulting firm is setting a clear definition of the specific work you want them to undertake.
Do you need help crafting digital marketing strategies, revamping data management, automating business operations, or finding innovative solutions for your IT department? Are you unsure of how to patent your product, commercialize your invention, or apply for funding? Or maybe you need a strategy for an early-stage project or a business plan for a fundraising round.
Once you have clearly defined your goal, look at different types of consulting firms to find one with the right competencies and specialization.
2. Decide on the type of firm you want to work with.
Do you want to work with a general consulting firm or a specialized one? Do you prefer a large firm or a small one? A general business consulting firm can offer holistic services for wide-scale transformation throughout the entire company. But a specialist advisory firm may be more suitable for a particular project or a single area of business.
In terms of firm size, large and prominent consulting firms tend to offer more experience and resources to support any field of work. However, smaller boutique consulting firms may have a better talent pool and expertise in a certain niche. Boutique consultancies are often run by ex-founders who have actual entrepreneurial experience and understand the challenges startups and scale-ups face. Thus, they also tend to pay more attention and diligence to the projects they undertake.
Our business is built on a personalised service. After all, the client entrusts us with the most valuable thing they have - a novel invention. To create a monopolistic position for them, we need to involved on a very personal level and build trust. A large company can rarely get as close and hands-on. In our experience, clients love when they don't have to introduce themselves and when we anticipate their need. Then they can experience first hand that we truly care for them. The genuine care translates into the results of our work. Personally, it irritates me a lot when I call a company as its client and they don't even know who I am nor what’s going on with my business. Of course they don’t, they're too big for that.
3. Check the profile of the consulting firm.
Whether you choose a large consulting firm or a boutique consultancy, it is important that they have the right profile that can help you achieve your business goals. Identify what they specialize in, their competencies, the specific services they offer, and the market they cater to.
Ask what types of projects they have completed and in what particular industries. If you are undertaking digitalization of your customer service, a consulting firm with experience in ICT and retail will be a good match for you.
The specific market a firm caters to also matters in finding the right one for you. If your focus is mainly on local business operations, a consulting firm with a local office may be a prudent choice for easier collaboration. If you will be carrying out projects in different geographical locations, look for a firm that has vast experience in global projects and has platforms in place for remote collaboration.
4. Ask about their methodology and modes of communication.
Writing a business plan, applying for a grant, commercializing an invention, patenting a product—all these require a collaborative effort. You don’t just hire a consulting firm, tell them what you need, and wait for the result. You must work with them at every stage of the process to successfully achieve your business objectives. For this reason, it’s important to know what methodologies they use and how they communicate with their clients.
In an MCA survey, half of the respondents said that they value independent thinking and transformational outcomes in a consulting firm. You may want to look for these as well. Inquire about the approaches they use in projects and the tools they utilize to create solutions. Ask how they delegate responsibilities when managing projects, who the project managers are, and how you can connect with the one in charge of your project. The main factor you should consider here is the ease of communication and collaboration with the firm.
If you want to succeed in innovation and technology sector, you will need a top-notch expertise. From our experience, best expertise and high added value is always to be found in a narrowly focused boutique firms, regardless of their specialisation, that do not waste your time and lead you straight to your goal.
5. Weigh their cost-efficiency.
One of the common reasons for hiring a consulting firm is to reduce costs on infrastructure, technology, and staffing. So it makes sense to factor in the cost structure of the firm you are considering. Check if they offer competitive rates that match your own budget and pricing models that give you the best value.
In a 2019 survey, 31.37% of consultants asked about their pricing model indicated that they use a project-based rate. The same survey shows that 23.38% bill per hour, 15.40% ask for monthly retainers and 12.55% charge on a daily rate.
However, do not choose a firm based on how low their rates are. You shouldn’t be after affordability but instead cost-efficiency. A firm that charges a higher rate but gets the job done efficiently at half the time will definitely be a better choice than a firm that charges much lower rates but delivers substandard services.
6. Check their presence in the community.
Many consulting firms showcase their portfolios and highlight their expertise. While these may give them an edge, it’s more important to check their reputation in the industry.
Be meticulous in researching the firm you’re considering. Check their LinkedIn profile and its content, or go through their other social media accounts. Read what previous customers have to say about their services. Ask your peers, or get recommendations from other tech founders. Your local network is often the best source of referrals.
7. Check for culture fit.
Before you sign a contract with the consulting firm you have chosen, check first if their work style and culture align with your own company culture. Schedule a consultation to get a sense of their vision and approach to work. Discuss main concerns to get an idea of how well you can work together. You don’t want to end up having unresolvable conflicts halfway through the project. Ensure a culture fit to facilitate smoother collaboration and closer client relationship.
8. Read the fine print.
It’s essential to go through the contract and read the fine print, especially if you are making a long-term commitment with a consulting firm. Check the inclusions, turnaround time, terms of payment, and other details. Read the contract carefully to completely understand what you are getting into. This prevents unwanted surprises of hidden costs or unfinished projects.
Choose a Partner for Business Growth
More than providing the expertise and resources you need, a consulting firm should be your partner for business growth. The right firm will be critical for your success, so it’s essential to do your utmost diligence in selecting one.
Are you looking for management bandwidth for your early-stage tech project? Then consider Pipette & Chart. Our boutique consulting firm in Prague strives to help businesses innovate and prosper. Schedule a consultation to find out how we can help grow your business.
Let us prove that we are are the right consulting firm for you business.Let's discuss!