Talk to as many consultants as you can before hiring one. Even if you have one person or firm in mind, interview at least a few others as a sort of due diligence. You’ll probably find that each interview helps you focus on the issues you’re hiring a consult to help resolve.
- Most consultants focus on two areas: cutting costs and raising revenues. What do you see as the relationship between the two functions? Which do you do better?
Cost cutting is the consultant’s usual expertise. It’s what most companies need. Most of these hired outside consultants to take an objective look at organizational charts, value-adding processes and competitive environments. “We spend a lot of time talking to a company’s customers, so we understand what they like and don’t like,” one consultant says. “What does the customer value? Is it time? Is it quality? We define that.” What this means is that a company can cut jobs and still not touch on one non-value-added activity or add value to the customer.
- What was your professional experience before you became a consultant?
Ultimately, you should want any consultant you use to have a strong bottom-line sensibility. You want this person-or team-to focus on the things that will add the greatest amount of value to your company in the shortest amount of time. This kind of thinking doesn’t come naturally to many people. It usually demands two kinds of experience: as a chief executive officer or as a corporate turnaround specialist. A consultant who has this kind of experience has dealt with strict cost controls, high-pressure scrutiny and the need for quick results. These are the same traits you should look for in anyone giving you expert advice.
- How many professionals work with you or at your firm?
Business consultants fall essentially into two categories: Solo-practitioners and team players. The differences between the two usually involve the type of work they take. Most of the time, the soloists deal with less-specific, strategic or vision-related issues; the teams get into more tightly focused number crunching. Less-specific functions tend to take less time (sometimes as little as one day); the more specific take more. One of these functions isn’t better or worse than the other. The trap to beware: The marketing soloist who claims he or she can also review all of your accounting.
- Will you sign a letter of confidentiality? Will you refrain from working for our competitors?
Ask all consultants to sign a letter of confidentiality. Some owners and managers assume that short-term strategic consultants pose less of a threat to proprietary interests than the number crunchers. Don’t make that assumption. You and your staff should feel free to discuss any business subject with your consultant and trust his or her discretion. If you feel uncomfortable, you won’t discuss things candidly. Your risk in these cases isn’t usually that the consultant will knowingly steal proprietary in formation or material. Most are professional enough-and work in small enough markets-that reputations matter. More often, the risk involves a consultant unwittingly mentioning something. If he or she has signed a confidentiality letter, he or she will be more likely to think twice.
- Who are some of your other clients? Who are some people and companies with whom you’ve worked before? Can I call them to ask about your work?
Hotel owners should be aware of skills an accounting consultant need to possess
Don’t be wowed by big-shot former clients. At big companies, consultants are hired in teams to tackle extremely specific projects. Just because the person in the expensive suit claims Microsoft as a former client doesn’t mean he knows Bill Gates on a first-name basis. In fact, it’s better if the consultant has worked with companies closer to your size and shape. They’ll more likely understand your needs. This is very true when it comes to accountant consulting.