Effective Use of Consultants

All businesses large and small have limited resources including Microsoft and General Electric yet the differences in the magnitude those resource limitations are significant.  Small business owners often wear multiple hats that include chief business development, chief operations officer, chief finance officer and chief executive officer.  In addition, budgetary constraints limit initially the resources you can hire to dedicate to business development, operations and overall management.

Several companies have been very successful using independent consultants to fulfill some of the key roles especially in business development and proposal preparation.  You can develop an array of financial relationship from an hourly rate to hourly rates that consider an incentive if the contact turns into a contract.  The latter approach passes on some of the risk to the consultant versus you sharing 100% of the risk and they reap the reward in the short term by getting paid their full rates and if you lose the opportunity they still got paid and you absorbed the full cost of the proposal.

If you select to use independent consultants do your homework and find out how they deliver for others in your same industry.  The consultant if used to do business development should be guided to not just generate activity but substantive and meaningful opportunities for you to meet decision makers within the program office where the procurement decision will be made and where the budget resides.  You can meet small business representatives on your own.  If you use a consultant for proposal writing then find out their track record for winning and verify their knowledge of the scope of work.  The value add would be they have insight to the issues that the current contractor has not resolved such as being responsive to the customer or employee retention issues or quality of service issues.  This allows you to address those issues proactively in your response and also seek to demonstrate some innovative ideas to deliver excellent service.

Most consultants want a retainer, to reduce their risks and I highly recommend that you develop relationships with other companies and consultants to leverage resources but make sure everyone is equitably sharing in the risks of doing business.

Finally being generous in rewards is nice but makes sure you do not give away the profits and thus if you give a commission base it on a period after your first payment and if there are any unexpected issues have a clause to adjust the commission accordingly.

Direct all relationships to experience the risk and rewards of pursuing an opportunity that will result in a more focused and effective collaboration process.

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