FAQ: Should I Hire a Startup Consultant?
Keeping track of all the different components necessary for starting a business can be easier with the help of an industry professional. Many new entrepreneurs choose to hire a startup consultant—an expert who specializes in creating a stable and successful foundation for new business ventures. If you're interested in creating your own startup, it's helpful to understand what a startup consultant does and the ways your business can benefit from their expertise.
In this article, we discuss startup consultants, what kinds of services they provide and the benefits, challenges and costs you can expect if you choose to hire a startup consultant when developing a new business.
What is a startup consultant?
A startup consultant is a professional advisor who offers guidance and resources to people interested in starting their own business. They're usually experts in one or more components of launching and owning a business, such as marketing or finance. Entrepreneurs typically hire startup consultants in the early stages of business development to focus on one specific aspect or offer general consultations for starting and maintaining the venture. Rather than come up with major business concepts, these advisors provide resources and support to help business owners develop their own projects.
Related: How To Become a Freelance Consultant
What services can a startup consultant provide?
Startup consultants can offer a variety of services related to creating and maintaining a successful business. Here are some of the most common services they provide:
A startup consultant can provide clients with networking abilities that can make a significant difference in their industry influence. When business owners are just starting out, it's important for them to connect with established professionals in their market, including investors, competitors and people with large social influence. Startup consultants typically have a vast list of contacts, so they can foster these relationships to help new businesses get established.
A startup consultant helps facilitate negotiations between clients and potential investors. They often have the communication skills and experience necessary for making business deals and partnerships, which can help reduce the pressure that new business owners feel when negotiating with high-level investors or competitors. Entrepreneurs may assign all business and financial negotiation duties to their startup consultant so they can focus on other aspects of the business, such as marketing or product development.
A startup consultant can help entrepreneurs organize their finances and make budgets while working on their new venture. This service is especially helpful for business owners who have little background in business management or budgeting. Hiring a consultant to take over the major financial responsibilities of the business can save entrepreneurs valuable time and ensure that their business' finances are in order. Entrepreneurs may work alongside their advisors to create a budget that meets both their personal goals for the business and the professional insights of the consultant.
It's common for startup consultants to specialize in particular business disciplines, such as marketing. Entrepreneurs may hire consultants who can offer them expert advice for creating their marketing campaigns, including insights on elements such as design, demographics and budgeting. A startup consultant can help develop a strong marketing campaign that boosts a business' influence in its market segment and among its target demographic. These can have a significant impact on a product or brand's ability to generate revenue.
Startup consultants can help their clients find rare investment opportunities that can have a significant effect on the business' success and ability to expand. Finding investors often requires experience in finance and business, as well as an expansive network of investment professionals willing to put their assets into a relatively young venture. Startup consultants use their connections, communication skills and financial literacy to create valuable investment opportunities for their clients.
Should I hire a startup consultant?
While hiring a startup consultant can make several processes of starting a business more efficient, there are also some challenges that may arise from bringing in outside talent. When creating your startup, it's important to familiarize yourself with the advantages and disadvantages of hiring a consultant to determine which option works best for your business.
Here are some benefits and challenges of hiring a startup consultant for your new business venture:
One benefit of hiring a startup consultant is that they can connect you with important figures in your business' industry, which can lead to valuable investment and partnership opportunities. They can also provide expertise in components of your business that you're unfamiliar with, such as finances or marketing. While you may have personal attachments to certain business proposals or projects, a startup consultant can take a more objective approach that focuses specifically on the likelihood of your business succeeding.
A potential challenge of hiring a startup consultant is that there are no guarantees about the success of their ideas or investments. Despite this uncertainty, hiring a consultant can help you avoid the chance of making an uneducated business decision. By allowing an industry expert to take on some responsibility, your business is much more likely to see a successful outcome. Another challenge of using a consultant is the high cost of their services. However, if their advice yields success for your business, you may end up making that money back and more.
Related: Q&A: What Is a Consulting Firm?
How much do startup consultants cost?
Startup consultants typically charge by the hour. A common method for calculating the hourly cost is to multiply their national average salary hourly wage by three. The national average salary for a startup consultant is $30.80 per hour, which would make the average hourly cost of hiring a consultant approximately $92.40 per hour. It's important to note that cost and salary can differ depending on location.
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