Research from the U.S. Bureau Of Labor shows that 20% of startups fold in the first year and 33% fail in the second year.
These figures are indisputable – but also avoidable.
In this article, we will explain how a business startup consultant can help ensure your company does not contribute to these statistics.
We’ll break down how they analyze the in’s and out’s of your company and devise a strategic plan to set you up for long-term business growth and financial success.
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What Is A Business Startup Consultant?
A business startup consultant is a third-party advisor who provides industry and market expertise to startup projects.
The role of startup consulting can be vital in keeping a company going during its critical formative stages.
Startup consultants assess aspects like finances, hiring, company procedures, marketing efforts and more to ensure a visible brand presence, a promising brand reputation and the ability to scale.
With the help of a consultant, many young companies can avoid initial obstacles that slow down or stifle their growth.
Business startup consultants can improve a startup’s market insight, point out and remove financial roadblocks, provide specific direction for marketing efforts and help with various other business facets that can ultimately break or break a budding company.
Startup Consulting vs. Business Consulting: What’s The Difference?
A business startup consultant is typically brought in during the early stages of the company or when it is moving into a period of growth.
They will assist new companies during this formative phase by helping to lay a strong foundation for financial success and future expansion.
These experts work directly with business owners to provide an in-depth overview of the market and help them reach informed decisions on the most sustainable direction.
Business consultants, on the other hand, frequently work with senior management teams in established companies. Their focus is typically on developing a strategy at the corporate level, often covering areas such as marketing, branding or logistics.
Business consultants may also provide recommendations on how to keep core brand values intact throughout periods of growth and transformation.
What Does A Business Startup Consultant Do?
Startup consulting experts evaluate your company’s business plan and offer guidance on how to manage and execute resources and navigate potential threats and liabilities.
A business startup consultant’s tasks typically include:
- Providing an independent and educated perspective on your business idea.
- Assessing your company’s capabilities for a better understanding of possible opportunities and gaps in growing your business.
- Mapping out a realistic budget for building and launching your product/service.
- Performing in-depth market research to obtain knowledge about your competition, target audience and marketing strategy.
- Defining the right scope of a minimum viable product.
- Assisting with plans to solidify the offering of products, services or solutions. This typically includes planning marketing activities, creating a brand identity, determining how to reach potential customers and defining a path to business expansion.
- Setting up management framework regarding the day-to-day running of the organization, including cash-flow management, HR policies, vendor management and other internal factors.
- Mentoring and training your team in different areas such as sales, customer service and marketing to speed up business processes and help your company achieve its goals.
Key Areas In Which A New Business Consultant Can Help Your Company
Although a consultant’s expertise typically extends to numerous areas of business, hiring an expert to evaluate your business may prove to be the most beneficial in these five key areas.
1. Market Research
Market research includes analyzing your target audience and your competitors — it’s the essential first step of any business undertaking, as it sets the groundwork for strategic decision-making.
Business startup consultants meticulously analyze the market segment in which you plan to grow your company in.
They research industry trends, your competitors’ strengths and weaknesses, and your prospects’ pain points and expectations, to gain a thorough understanding of your market.
After analyzing your market, a consultant can provide you with a detailed strategy regarding your marketing campaigns and other vital business efforts, to ensure you stand out from the competition by fostering brand visibility and providing a unique value proposition.
2. Business Strategy
A sturdy and effective business strategy is especially important for new enterprises.
If your startup business does not yet have a specific roadmap or a set of clear and attainable objectives, a consultant can help you put a strategic plan in place to keep your business profitable through all lifecycle stages.
Your consultant partner will evaluate and analyze your existing plans and processes, then make recommendations and develop a blueprint for a new business model.
In the process, they will explain their reasoning behind every recommendation and provide instructions on how to carry them out.
For example, if a consultant advises you to focus your social media marketing efforts on Instagram, they might explain that this is where the bulk of your target audience spends the most time.
A consultant might also suggest the tone of voice, messaging style, targeted demographics and posting schedule you should use to connect with potential customers.
3. Project Management, Financial Modeling & Forecasting
A new business consultant will evaluate your current project management plan and outline a strategy for effectively moving your business towards its specific goals.
This may include recommendations in branding, lead generation, marketing, advertising and other areas of business.
Financial modeling may be arguably one of the most important and most beneficial aspects of hiring a startup consultant, considering that a reported 82% of new businesses fail due to financial problems.
A small business startup consulting expert will take an in-depth look at your financial plan and offer advice on areas of investing to determine what it will take for your business to grow and meet its goals in the future.
With this expertise, consultants make sure your money is invested wisely in areas like marketing, branding and hiring.
Allowing an expert to take a closer look at your finances can help ensure profitability and lessen the chance of failure due to financial problems.
4. Company Management
Another key area of your company that a business startup consultant can help improve is management.
An expert can evaluate your processes and ensure everything is as streamlined as possible to avoid potential setbacks and blunders. They can also help grow your existing resources to maximize efficiency.
For example, a consultant can help you decide what operations should be kept in-house and which operations you should outsource. They can also analyze your staff and make hiring, training and recruitment recommendations.
A startup consultant’s experience with company management can help ensure your team is top-notch across the board and allow them to point out areas for improvement in every department.
5. Coaching & Mentoring
A startup consultant can serve as a coach and mentor to guide and educate you and your staff through the intricacies of a new business.
Consulting specialists can provide success stories and insightful strategies, as well as full-fledged training and mentoring sessions to instruct you and your employees on the finer points of running a profitable company.
These trainings can encompass all sectors and areas, from finances and sales to branding and marketing, as well as communication strategies and key leadership skills.
Even if this startup venture isn’t your first, having a coach and guide by your side can help give you the confidence you need to hit the ground running.
At Digital Silk, we offer startup consulting, along with a wide range of services.
5 Benefits Of Hiring A Startup Consulting Expert
The perks of working with a business startup consultant range from gaining objective feedback to acquiring a professionally planned business roadmap.
Here are five key reasons why you should consider hiring an expert to help you with your startup project.
1. Unbiased Feedback & An Outside Perspective
Unbiased and honest feedback can be immensely beneficial to startup enterprises. An outside consultant can impartially point out internal and external issues and threats that business owners may not realize exist.
Startup consulting experts can help your organization overcome an unintentional bias challenge with their expertise, experience and neutral perspective.
They see your business as a part of a larger ecosystem that includes your industry, target audience and competitors.
New business consultant experts provide an objective external outlook on your startup’s practices and business model.
Their feedback on details of work execution, organization and other critical aspects sheds a light on the true state of your business and lends specific direction on how to improve it.
2. Specialized Insight & Relevant Industry Expertise
Many new business consultants are serial entrepreneurs or investors with an extensive track record in building businesses from scratch and they’ve spent years carrying out specialized roles in successful companies.
Thanks to this ample experience, a business startup consultant possesses the know-how for identifying a business’s potential within its market and creating a detailed plan for how to move it forward.
Therefore, these experts are in a position to provide valuable advice on management, strategy, marketing, finance and other facets of leading a business to decision-makers and executives who may be new to the world of business or would benefit from an extra set of eyes and an expert opinion.
3. A Results-Oriented Approach Tailored To Your Goals
New business consultants take the time to learn about your company’s specific challenges, needs and goals in order to help you grow and overcome business obstacles.
Knowing that every startup venture is unique, an experienced consultant will not offer “one-size-fits-all” solutions. Instead, they will adapt their strategy and plan of action according to each client.
For example, let’s say you are starting a craft coffee brand. To connect with potential customers and separate yourself from your competition, you plan to share the story of the beans you use, from their origin to how they’re brewed in your coffee shop.
A startup consultant could help you perfect this angle with a dynamic and engaging story, along with a cohesive marketing approach, messaging style, tone of voice and visuals.
An expert can also evaluate your budget and ensure your money is allocated in the best way possible to different sectors, like marketing or sales, depending on the challenges you face and the competition you’re up against.
A consultant will recognize all of these unique traits in your business and adapt your strategy accordingly.
Startup consultants take a results-oriented approach to your business, to help your company set realistic goals and KPIs – such as customer acquisition rate and customer lifetime value — to measure your market performance.
4. Long-Term Cost Reduction & Time Saving
Acquiring the expertise of a startup consulting specialist reduces costs and saves time in the long run, because they focus on your company’s sustainable profitability.
For example, a consultant can point out areas in which you can reduce your budget and save money, explain how to keep your taxes as low as legally possible and suggest a feasible budget for building and launching a product or a service.
They can also identify issues related to your internal structure and processes that may be the cause of ineffective day-to-day work, leading to deadline issues.
By ensuring that your processes are streamlined effectively, a consultant can help you cut costs without cutting corners.
5. Access To Valuable Resources
Business startup consultants have access to valuable resources that may give your company the important edge it needs in its development phase and empower you to make informed decisions.
These resources may include the latest in-depth market surveys and white papers, expensive competitor and target audience analysis suites (like SimilarWeb and aHrefs), feasibility studies, and benchmarking and core competencies tools (like HWMonitor and 3DMark).
How Much Do Business Startup Consulting Services Cost?
The cost of hiring a business startup consultant may vary based on several different factors — let’s break them down.
Some consultants charge by the hour, while others may opt for a flat, project-based or performance-based fee.
Experienced consultants often prefer to charge per project to adequately manage the deliverables associated with each client. In this case, the consultant and their client agree on the price and the amount of time the project should take.
In some circumstances, you may be able to opt for a monthly retainer, which is most common in situations where the services of the consultant are needed on an ongoing basis.
Aspects that factor into the price of startup consulting include:
- The scope and type of services you require
- The experience of the business startup consultant
- Your competitive landscape and physical location
- Whether you need one-time or continuous consulting services
Startup business consulting fees in the US typically range from $150 to $250 an hour, depending on the experience and the value they can bring to your company.
Certain startup consulting agencies charge flat rates for their services or packages. Depending on the scope of work, flat rates for ongoing consulting services typically range from $2,500 to $3,500 per month.
When it comes to specific services, rates may go as follows:
- Business consulting: up to $250 per hour, although it is customary to provide a complementary 15–30-minute consultation to new customers
- Financial projections: $150 per hour, on average
- Business plan: $150 per hour, on average
- Market research: $150 per hour, on average
In the long run, hiring a professional consultant is much more cost-effective than going at it alone, because their experience can help you avoid making mistakes in the most critical stages of your company.
How To Choose The Right Startup Consulting Partner For Your Business
There are several key factors you should consider when choosing a business startup consultant:
- Portfolio: A consultant’s portfolio and case studies provide insight into their past experience and the type of clients and industries they have worked with, to help you understand if their expertise is applicable to your company.
- Third-party reviews and references: Social proof can help testify to a consultant’s credibility, professionalism and abilities. Past clients can tell you a lot about a consultant’s prowess, communication, flexibility and other factors, which serve as valuable info you can use to estimate whether they are the best fit for your company.
- Communication skills: Consultancy experts must be able to convey their suggestions, discuss issues and request feedback from you clearly, concisely and in unambiguous terms. Strong communication skills facilitate the passing and adoption of knowledge and the delivery of advice.
- A personalized approach: Make sure the business startup consultant you hire is willing to provide you with solutions tailored specifically to your needs and goals. They should show interest in your particular industry and knowledge about the challenges you face and be able to create a plan of action based on thorough research of your target audience and competitors.
Interviewing A New Business Consultant: 5 Questions To Ask
When deciding between several potential business startup consultants, it is vital to ask the right questions in order to establish which one is the right fit for you.
1. Could You Share Some Startup Consulting Success Stories?
A successful consultant should have proven credentials and impressive performance history in helping startups scale.
When evaluating their track record, focus on the challenges they have faced, the solutions they have provided and the results they have achieved.
2. Have You Worked With Startups In Our Industry?
A startup consultant who thoroughly understands your offering, market and target audience can bring your company a major competitive edge by setting you on the right path from the get-go.
Their industry experience will provide well-informed solutions and deep insights that will save money and time you would lose on trial-and-error.
3. What Key Areas Of Our Business Require Special Attention?
The ideal answer to this question should display your consultant’s wealth of relevant experience and innovative insight.
They should also acknowledge that every startup business is unique and requires specific solutions.
4. How Would You Prioritize Our Budget?
Your chosen consultant’s financial strategy for your business should be based on your business goals and existing resources.
When it comes to budget, there’s no universal formula to distribute funds and ensure success. Every business is different.
A successful consultant will be able to take a look at your business model, goals and financial situation and provide general ideas right off the bat as to where and how you should allocate your resources to reach your objectives.
5. How Do You Measure Results?
It’s important to ensure the consultant you choose looks at success the same way you do.
Based on your goals, determine what success would look like for your company, and ask your potential consultant what they consider to be a successful project.
If your idea of success aligns, it’s a step in the right direction to finding the startup consultant that’s the right fit for your business.
Wrapping Up: The Key Benefits Of Hiring A Business Startup Consultant
A business startup consultant provides an unbiased and detailed assessment of your company and gives expert recommendations to help you reach your objectives.
Key benefits of hiring a business startup consultant include:
- Reduced costs and time saved in the long-run
- Specialized insight and relevant expertise
- A results-oriented partner that tailors your business plan to your goals
- Access to valuable resources like white papers, market analysis tools, benchmarking software etc.
Find a startup business consultant that is right for you and your budget by asking the right questions about past clients and success stories, relevant industry experience, budget prioritization and measurable results.
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