Using Outside Consultants As a business owner you may occasionally need to seek outside advice to achieve your business goals. Whether it’s crisis or continuous improvement, an independent consultant can bring two important things to the table. One is professional expertise and experience. The other is an outsider’s perspective--objectivity and the ability to help you see the broader picture. If you think that it would be too expensive or you figure that you and your staff should be able to solve your own problems, you may want to reconsider. It may be more expensive if you don’t hire a consultant. Your time and agency resources are expensive. And without someone to help you focus on issues and implement change, you may be missing opportunities for improved profitability. Remember, you already contract with a variety of professional advisors--accountants, attorneys, bankers and others. Don’t overlook the value of advisors who can challenge your thinking and who have the know-how to help drive your business to the next level. Don’t think of a consultant as an expense, think of it as an investment. Some consultants charge a flat fee--daily or hourly. Others will quote a fee for the engagement based on the scope of the work to be done. Some include expenses in the fee structure but most handle expenses separately. Fees may or may not be negotiable. While it would be unusual to ask for full payment up front, most consultants will want a down payment or advance to cover any expenses that are not refundable. If the consultant charges by the hour, get an estimate of the total cost for a specific job. You may want to work with a consultant for long-term projects or ongoing support for your agency. Retainers can usually be arranged. To get the most from your investment, choose your advisor carefully. Have clear expectations for the outcome, and make a personal commitment to the success of the engagement. Following are the five steps we’ve identified that can bring real value to your business. 1. Identify the need. Analyze the nature of the problem and understand the investment needed to meet your objectives. Do you have the time and the expertise within the agency? Do you have a general idea of what it will take to solve the problem or meet the challenge? What do you expect the consultant to be able to bring to the table? 2. Select the consultant. Once you have identified and quantified the need, you are ready to find the right consultant--one with the skills and the expertise you need. Choose a consultant who is professional, reliable and compatible with you and your organization. Review resumes, professional credentials and work experience. Ask the consultant for references to agencies of similar size and/or where similar issues were addressed. Ask prior clients for an overall evaluation as well as specific input on how well the recommendations and implementation succeeded. Learn more about Transformation Advisors, Inc. 3. Establish clear expectations. Both you and the consultant should understand the objectives of the engagement. What will be done and what are the expected outcomes? What will be expected of you and your staff? Consulting to Transform Your Business describes our approach to consulting. 4. Obtain a signed contract. Part of defining expectations should be a written agreement between the agency and the consultant. A good agreement lays out the parties involved, describes the work to be performed, the term of the engagement and the fee arrangements. Most contracts include a cancellation clause that allows either party to withdraw if it becomes clear that the arrangement isn’t working out. Expect a penalty or minimum deposit if travel expenses are involved. Would you like to review our agreement? 5. Maximize the experience. Any consulting engagement requires a significant investment of time and money on your part. To get the most for that investment make a personal commitment fulfill your part of the bargain. Remember that a consultant can only facilitate change – the real work must come from you and your staff. You consultant’s job is to help you get the right people working on the right things. Be prepared to:  | Provide information. Expect to provide confidential information as well as other details that the consultant will need to gain insight into your business and your issues. This may require some work on your part or on the part of someone in the agency. If the consultant asks for information that you don’t feel is relevant, however, feel free to ask why it’s needed. The relationship you have with your consultant should be totally honest and open. |
| Involve your staff. Your staff has valuable insight into your strengths and weaknesses. They will also be called upon to implement changes. Let everyone in the agency know the purpose of the consultant’s visit, stressing the importance of cooperation. The more they are involved in the process, the more likely they will be to help you achieve your desired outcome. | | Be receptive. You may hear things that you don’t like from your consultant. But the consultant was hired to provide the benefits of experience, expertise and an objective viewpoint free of management interference. The consultant’s recommendations deserve consideration even if you are uncomfortable with them. However, it’s still your business. You may reject some recommendations or advice. That’s okay. If you are uncomfortable with a recommendation it will be very difficult to convince your staff that they should do it. Be sure to freely discuss your reservations with the consultant. There may be things the consultant doesn’t know about the situation or something that you yourself are overlooking. | | Implement change. Even the best recommendations are of little value if they cannot or won’t be implemented. The consultant cannot implement change for you. They can only facilitate it. If you are not prepared to implement recommendations, think twice before bringing in a consultant. Not only will you be wasting your money, but in addition taking no action can be harmful. Bringing in an outside consultant will set up a certain level of expectation on the part of the staff. And if you wait too long, you lose any momentum gained by bringing the consultant into the agency. |
Using consultants is more than a one-time event. It’s a process. Once you realize the value an objective, knowledgeable advisor can bring to your agency you may wonder how you ever got along without it. Building a successful insurance agency is a skill in itself. It’s also a skill to know when to ask for outside assistance. Consulting to build the effectiveness of key activities such as marketing and management should be a regular part of your agency operations. Make your consultant a member of your management team. | 