Startup consulting services are very prevalent, but many may dismiss such expenses at the early stage of their business. However, this can be a critical mistake. Every new business needs external guidance.
For business startups, which typically navigate more challenging waters, the extra pair of hands can be a significant advantage – if used correctly.
Of course, not every business startup consultant is the same. Just as there are dedicated startup consultants, so too are there market research and business consulting firms with a range of services for new businesses. As a startup, you have a wealth of options – but the right selection of business startup consulting services, and knowing what to keep in-house, will be critical.
An Objective Stance
First and foremost, there’s one huge benefit to using external business consulting overall: as non-investors, they’re able to provide objective feedback. As a founder or owner, it’s difficult to have such a viewpoint from within the company itself. Whether it’s the financial plan, proposed product development or even just the marketing strategy, the best strategy and planning consultants tell you what you need to hear, not what you want to hear. After all, their interests lie in securing your success.
One additional benefit of such objective viewpoints is that business startup consultants can also provide moderation. Especially at the early stage, but even into the late term stages of product development, ideas can come from all corners and evaluating the best strategy is seldom easy. As moderators, whether actively in meetings or not, consultants can ensure all voices are heard, but still assist you in the non-biased filtering of valid proposals.
Challenge of Ideas
On the topic of objectivity, let’s be clear: not every business idea you have will be a stroke of genius. Each of the online business projects needs a way to challenge their ideas. Of course, before going public, this can be tricky for business startups to achieve, which is another benefit that experienced business consultants can provide.
Business consultants as a whole are used to offering the necessary ‘push back’ founders, owners and other leaders need to move forward efficiently. In addition to market research, discussed later, they can use their experience and knowledge to give you insights that you wouldn’t have otherwise had. While your internal team might think a new proposal is the way forward, it’s external business consultants that can explain why it might not be the best approach, drawn from experience, facts or simply a more objective point of view that’s more inline with the final consumer.
Management Guidance
We can broadly put startups into two categories: those that are founded by established, experienced individuals and those that are founded by relatively fresh and inexperienced leaders. In both cases, startup business consulting services can help guide the management direction.
Some might not like the idea of management consulting, but it’s critical for both groups. The inexperienced need a seasoned professional who can establish a managerial order designed to bring out innovation, pivot where necessary and ensure product development remains the key goal. Experienced individuals, likewise, need a business consultant to help establish a new system; it’s often necessary to ‘forget’ processes learned in previous companies.
Market Research
Before your product development or marketing strategy, you first need to test your business plan for a product/market fit. A lack of thorough market research can immediately guide a startup business in the wrong direction, costing both time and money.
What’s more, this is where startup consulting services can really shine. By being apart from your business, they can provide objective and clear market research. They can also provide detailed market analyses that you might otherwise simply not have the time or experience to conduct yourself.
Industry Knowledge
Every sector is unique, so the importance of understanding the current market and the unique challenges of your industry can not be understated. Who better to provide business startup assistance than someone with direct experience in such a sector – experienced consultants?
There are many consulting services dedicated to specific industries, and this is why. When using such companies, the business consultant assigned to you is typically someone with an established background. They know the ins and outs better than most. They can help avoid pitfalls that people new to the industry might not otherwise know, whether its legal issues, technical challenges or even the facets of business culture.
Long Term Strategy
With startup companies, it’s easy to focus on the early stage business goals such as the aforementioned market research, product development and investment. But startups, like any small business, need to focus on the long term goals; making the business financially sustainable, returning on investment and even marking areas of potential growth.
A business consulting expert – especially one with a background in running their own business – can provide this alternative perspective. They can help you set the right goals in order to maximise on resources and not over extend. For example, they know when to go through funding, when to expand product development and when to launch a marketing strategy. An experienced consultant will ensure you don’t invest too early, but also don’t invest too late.
Business Growth and Team Building
Speaking of the long term plan, business consulting services can also play an active role in your expansion. After all, when your company consists of a handful of people, recruiting the right experts is essential. Having someone in the recruitment process with their own experience (and, again, the ability to provide an objective stance) to filter out candidates will help your chances of finding the right people.
Better yet – when resources aren’t limitless, consultants can even recommend when to hire in-house, when to outsource on a temporary basis and when to otherwise wait. Growth is important, but expanding too fast also comes with its own risks and considerations.
A business startup consulting firm can also help with business structure development startups need to establish, legal formation assistance, managed marketing services & marketing campaigns (along with business branding), as well as proper sales strategies. So, all in all, for a new business venture, startup consulting can help to establish critical components of the business processes and help to shape a proper business model.
Express Concerns
Growing startup companies is never easy and certainly comes with more than it’s fair share of challenging questions. As the leader of such a small business, you will always have such hurdles, but not the people to discuss them with. Not everyone has the luxury of a co-owner or partner, but a consultant can again provide input on such issues.
A great business startup consultant doesn’t just answer questions. They review, research and come back with their own concerns. Here, you will find new challenges, issues and hurdles that you might not have otherwise seen. And once you know about them, they can be solved.
Yet expressing concerns is a two way process and the other way is just as vital. The objective position of consultants outside of the company means they can better advise on any issues that shouldn’t be discussed within the organization itself, but of course likewise shouldn’t be public. This can include your management style, potential investors, new directions for the company and even internal structure. As a confidential mentor, they can offer this often overlooked service.
Learn from Mistakes
Finally – at least when it comes to why you should consider startup consulting – is that you can learn from their mistakes. As the saying goes, those who fail to learn from history are condemned to repeat it. But that doesn’t mean you need to make the mistakes yourself.
If you choose a startup consultant with their own experience in running a business, or navigating the specific industry you’re in, you can learn not only what worked, but also what didn’t. Learning from and avoiding failures is just as important as repeating previous successes.
What Shouldn’t You Use Startup Consulting For?
From the very beginning, you need to be active with both potential investors and current shareholders. These are areas that can not be outsourced to anyone. External partners aren’t just evaluating your business or its product; they’re evaluating your potential as someone to do business with. Startup business consultant can guide and coach you on the finer points, but can not replace you.
Likewise, you can not rely on your startup consultant to share your passion; remember that business consulting is an objective service. As such, don’t expect your consultants to be a free source of marketing or exposure. They’re not investors, venture capitalists or incubators.
So, is Startup Consulting Necessary?
There’s no clear right or wrong here: startup consulting services have a lot to offer, but they can’t be used to manage your business for you. While many might still see a business consultant as extra expenditure at the early stages of a company or product, it’s better to view them as a form of insurance or risk mitigation.
For those new to this side of business, startup consultants can provide direct mentoring and development to you as the startup founder.
However, even seasoned veterans can respect that startup consultants provide knowledge where needed, objective feedback to challenge your misconceptions and a wider range of industry knowledge, market research and the overall startup and product development processes. Unless you have these qualities in equal spaces within the company already, some external guidance can go a long way.
In fact, this is one of the key benefits of accelerator programs – yes, like MIT EF CEE! Alongside financing, accelerators focus highly on education and mentorship. In other words, they typically include such startup consulting services on a more personal level.
Whether it’s part time or full time, a startup consultant can bring this added clarity into your internal business strategy. If you have access to such mentors or business consultants already, don’t let such knowledge and input go to waste. And if you don’t, then perhaps it’s time to bring someone on board with the experience and expertise to help you navigate?
This article was created by MIT Enterprise Forum CEE. Want to know more about the MIT EF CEE Startup Accelerator? Check out how our program can help your startup grow!
