27 Things Companies Should Consider When Hiring Business Consultants


Hiring outside consultants to do short-term projects is common in business. More and more frequently, as in-house resources become scarcer and impartiality is required, organizations and municipalities are turning to consultants to get the job done.

Hiring a consultant for the first time can be a little intimidating. This article provides basic information that will help your company make the best use of consultants.

[1]: What are Consultants?

Consultants generally specialize in a particular area. They may be good at solving problems or doing research or exploring alternatives. Consultants usually work on contract, they sell their knowledge or services for a fee. Professional consultants can bring new ideas to community projects, and your organization or community can often learn from working with them.

[2]: How Do Consultants Work?

The two general approaches are the knowledge approach and the people approach. It’s important to choose a consultant who uses an approach that fits how you want the job done. If a consulting job doesn’t work out for the client, the problem could be that the wrong consultant was chosen. One of the problems may be that their approach might not have been suited to the job.

[a]: The Knowledge Approach

Consultants who use this approach work for you – not with you. Hire an expert if you just want to get a job done as quickly as possible and there’s no need to involve the company. This approach is suitable for straightforward, technical jobs such as designing a computerized accounting system or membership database.

[b]: The People Approach

Consultants using the people approach tend to work with you, not just for you. Companies are leaning toward hiring consultants who use this style. The reason? When a consultant works with you and the community, you have a chance to learn something. If you hire a people-type consultant, they would probably work with the people in the organization or community to decide what research should be done and then train them to do the work.

Note: This approach may take more time and, consequently, cost more. But it usually means better research and involves the company. In effect, the research belongs to the company.

In summary, use the knowledge approach for one-time technical jobs that one or two consultants can do efficiently working alone. Use the people approach when the organization should become involved in a project that affects it in whole or in part.

[3]: What is the Problem that Needs to be Fixed?

Addressing this question sets the stage for determining the terms of reference and helps your company clearly state what needs to be done. Only when this is accomplished can you proceed.

[4]: Do We Really Need a Consultant?

Before hiring a consultant, ask yourself if you can do it yourself, or if other help is available?

[5]: Can We Do it Ourselves?

Once you’ve answered the first question, you must decide if the people in your company can do the work locally. Here’s a short checklist to help assess whether it might be possible to use local talent.

  • Have the company leaders, employees (if you have any) and other volunteers had a chance to look at the job to see if their organization has the skills required?
  • Do local people and others think that the company would be able to do the job?
  • Could you re-assign staff to work on the job?

If you answered “yes” to all these questions, your company could probably handle the job locally.

If you feel your company can’t do the job on its own, the next step is to look at other sources of help.

[6]: What Other Sources of Help (Other Than Consultants) Are Available?

  • Other companies/organizations: Ask other companies and/or organizations about their experiences. By comparing notes, you can find out how they approached a job or problem, learn how to avoid problems or difficulties before they happen, and get other useful ideas for your own project.
  • Groups and associations: Often groups or associations that specialize in any number of technical and social areas will contribute free advice or other help.
  • Universities and community colleges: They will sometimes donate time and expertise to projects if they can do research at the same time. But make sure that you can get their research reports and that the information from the research is useful to the company. Also remember that you should have a say in how they use and publish research results.

[7]: Making the Decision

  • After looking at what you have locally, and the kind of help you can get from outside sources, you may decide that you need the services of a consultant. Basically, you should hire a consultant if:
  • no one in the company has the time or expertise to do the job
  • you tried previously to do the job (or a similar one), and failed to achieve the desired results
  • the company is likely to value a consultant’s recommendations or solution more than its own
  • you need specialized help and advice

If you decide to hire a consultant, your next job is to find and choose the right one.

[8]: Finding the Right People

Here are some ways to find consultants:

  • Ask around – word of mouth across communities is still the best way to get information on many things, including which consultants have done good work in the past.
  • Rehire a known consultant who has done a similar or equally difficult job or ask a consultant you trust for a referral.
  • Use lists of qualified experts – you can get these from professional organizations, colleges and universities, government agencies and volunteer groups.
  • Contact consulting companies – look in the yellow pages of the phone book under consultants or management consultants.
  • Advertise in local or regional newspapers – briefly outline the job you want done, and ask consultants to reply if they are interested.
  • Keep a file of resumes from people who have expressed interest in working with your organization or community. You never know when another situation may arise that finds you looking again.

[9]: Choosing the Best Consultant

The selection committee may be involved in the following aspects of selection:

[a]: Look at qualifications.  

Example Qualifications Statement:

Throughout my 30+ year career in construction, I have helped, built, coached and consulted with numerous contractors, subcontractors, engineers, architects and the overall construction industry.  For each organization, I have provided the strategic, marketing, financial and operating expertise to deliver strong earnings and sustained revenue streams.

Please consider the following in addition to my resume.

Contributing Ideas That Work

  • Provided business development skills as team player for many companies with endorsements from over 650 people. Fully involved in creating plan books and creative business development briefs to promote awareness of how respective clients serve their market better than their competitors.

Experience that Brings insight

  • I am a former 20+ year business adjunct professor at three leading California Universities, and a Construction business analyst and consultant. I have taught more than 10,000 students people around the country. I am an experienced Off-line and On-Line marketer business developer, public speaker and a popular Bay Area professional. I work with many of the top small businesses in America. I am the author of over 850 top rated business and marketing articles.
  • 10 years “hands-on” experience working for many major construction companies in the San Francisco Bay Area. This include the areas of construction management, owner/client negotiations, sub-contract scope designs and negotiations, project costs accounting/reporting, estimating, purchasing design/expense analysis, and bidding.
  • Recognized as a credible professional in the construction industry.
  • Leadership of more than $150 million in construction projects, with development and management responsibility for more than 370 projects ranging from commercial renovations to major new construction projects.
  • Astute business manager with an outstanding ability to build dynamic teams and generate strong results; to successfully assemble teams to solve business and project problems in all phases of construction development.

Proficiencies that Reflect Distinction …

  • Creative Idea generation and problem solving for unique situations
  • Brainstorming and openness to new idea for increasing productivity
  • Group facilitation and organizational for effective productivity
  • Effective decisions based on overall picture for positive outcomes
  • Interpersonal skills such as mediation and negotiation for maintaining strong business relationships
  • Effective writing talent for creative copy

As a successful entrepreneur I possess a wealth of positive, proven methods and solutions to diverse obstacles. Most significantly is my ability to drive projects to completion.

I would welcome the opportunity to discuss how my credential and expertise can benefit your organization, and will therefore contact your office next week to arrange a mutually convenient time for us to meet. In the interim, I thank you for reviewing this letter and the accompanying material.


[b]: Example Resume

Position Sought: Serve as an Independent Construction Business Development-Management Coach and Consultant

I spent the last 30+ years of his life creating fascinating Client and Profit Doubling programs that have helped thousands of small businesses across America and an independent Construction coach and consultant.

I am a former 20+ year business adjunct professor at three leading California Universities, and a small business analyst and consultant. I have taught more than 10,000 students people around the country. I am an experienced marketer, business developer, public speaker and a popular Bay Area professional.

I work with many top small businesses. I am the author of over 850 top rated business and marketing articles.

I am a results driven and well-organized Construction Professional able to combine a unique blend of “hands on” and formal technical education with a solid, background in the Construction Industry. I have an extensive knowledge of construction environments. Have expertise in residential and commercial construction and have work closely with management, consultants, vendors and trades people. Versatile team player with ability to incorporate new concepts and interact with all levels of professionals

Competencies Include

Construction Marketing         Construction Sales          Construction Management

Project Management                Vendor Negotiations      Business Troubleshooting

Planning and Development     Process Optimization      Cost Reduction Strategies

Professional Achievements

As an independent Senior Area Manager, Business Analyst, Coach and Consultant for a variety of companies, Adjunct Professor at San Francisco State University, Golden Gate University and Canada College, I have developed expertise in the following areas:

Independent Construction Coach-Consultant

  • Independent Coach and Construction consultant working on various construction projects 1980-present
  • Project Cost Analysis, Estimation, Control, Monitoring, Productivity, Efficiency & Performance Improvements
  • Invoicing & Reporting, Operational Staff Hiring, Administrative Training, Development & Mentoring
  • Apprentice Carpenter, Journeyman, Foreman, Assistant Superintendent through Carpenters Union Local #22

I have extensive supervisory skills with construction employees at union and non-union work sites, leading in completing a range of projects on time and budget – always focused towards delivering peak quality. I excel within companies that require “wearing many hats” proven expertise in business development as well as fieldwork and administrative projects. I am a trouble shooter able to turn around probablematic projects to meet challenging goals and objectives

I am energetic about challenges, self-motivated and able to focus on long term objectives and push for results. I have excellent written and verbal communication and organization skills.   I act with integrity that shows support for clients, their values, and their employees while maintaining a constant focus on meeting/exceeding customer requirements and expectations.  I have leadership skills with ability and willingness to face challenges, delegate and provide direction to others, and effectively address conflict.  The majority of my work is totally confidential and is completed on the Internet, Skype, and phone or in my office setting.

Construction Marketing-Sales

Implemented progressive sales and business strategies in order to develop and increase client base through strong client relationships. Developed and executed strategies for obtaining new project opportunities. Identified potential leads in the public and private sectors, researches background data, prioritizes with the Business Unit Leaders, Preconstruction, and Marketing to follow through with the strategies for selected projects.

Developed strategies for client relationships. Defined partners, influencers and “hot buttons.” Established and maintained relationships with existing and potential owners, architects, engineers, subcontractors and suppliers by creating a positive image, building lasting relationships, focusing on added value for the client, and effectively communicating concepts and ideas.

Contributed ideas for development in the strategic business planning process

I know and understand market trends; used research skills to gain information on markets including competitive intelligence, political landscape and business edge.   Supported business development meetings where to communicate, identify, update the status of, and select target projects. Assessed implemented and reassessed win strategies.

Assisted in leading the team effort to respond to requests for proposals, qualifications, and other information required in pursuit of projects. Developed and directed the implementation strategy (format, objectives, features, benefits, differentiators, etc.).

Coordinated the presentation strategy (format, objectives, features, benefits, differentiators, etc.) Provided training and preparation for presenters, and observed and provided feedback.

Attended job progress meetings to be aware of operational issues associated with various projects.

Sought feedback from owners, architects, engineers, subcontractors and suppliers, and developed and implemented procedures to benchmark client performance against competitors.

Acted as a mentor for BD Managers in the form of a network of best practices, new projects, and ideas

Ensured clients were represented at appropriate conferences, conventions, trade shows, and industry award events.

Distributed company information to clients, business associations, communities, and other professional groups in an effective, consistent and timely manner

Participated in a leadership role in industry organizations to enhance position and image

Built a strong knowledge of the construction process, delivery methods and our capabilities, as well as industry changes

 Project Management: Provided design, project planning, and implementation for a variety of projects that had a major impact on improving operations efficiency and profits. I have make decisions under tight deadlines, occasionally in the face of incomplete information.  I’ve built constructive and effective relationships, and establish rapport; related to all kinds of people at all levels inside and outside the organization. I have created team relationships and followership, managed, and revised schedules and related assignments based on priorities while considering work/life balance for self and others.


  • San Francisco State University Construction Adjunct Professor
  • Golden Gate University Construction Adjunct Professor
  • Canada College Business Professor
  • BA-University of San Francisco
  • Construction Management Degree-Certificate San Francisco State University
  • Contractor’s License # 439928
  • Black Belt (Kukkiwon-Certified) and Instructor

Computer Skills

  • Computer skills include Internet proficiency, Microsoft Word and Excel. I have proficiency using a personal computer (PC) and company communication tools, such as email, internet, and Microsoft products (e.g., Word, Excel, Office, Outlook).
  • Would your company hire this consultant?

[10]: Making initial contact. 

  • Send the potential consultants the terms of reference. (see next section for details).

[11]: Requesting proposals.

The proposals should outline how consultants would meet the company’s goals or objectives and carry out the work. They should include qualifications, costs, and projected days or hours to complete the task. If the consultants ask for more details on your project, the committee should arrange to meet with them.

[12]: Assessing the proposals. 

In assessing these proposals, the committee looks at how the consultant intends to meet the needs of the company, the consultant’s qualifications and the estimated cost. Sometimes it might be helpful to score the proposed ability of the consultant to do the job separately from their cost estimates. That way neither part influences the scoring of the other.

[13]: Choosing a short list of four or five of the best people or firms from those who send in proposals.

[14]: Interviewing the short list. 

The committee should focus on the consultant’s technical expertise, knowledge of the company, and the proposed fee. Depending on the size of the contract it may be possible to conduct the interviews by teleconference, although meeting in person is always preferable.

[15]: Checking references. 

The best references come from people and organizations for whom the consultants have worked. Look at the final reports of similar projects that the consultants have carried out. The committee should ask the following questions when checking references:

  • Did they honor the contract terms?
  • Did they finish their work on time?
  • Did they stay within budget?
  • Were their recommendations or reports useful?
  • Did their interventions make positive change happen?
  • Were they open and flexible to ideas and input from the community?
  • How well did they work with the community or other client?

[16]: Choosing the consultant. 

If you follow this selection process, you are likely to find qualified people – people who will work to meet your needs, and deliver a useful report, recommendation or suitable consultation process or other product or service at a fair price.

Note: As a courtesy to other consultants who sent in proposals, it is a good idea to tell them that you have picked someone else for the job. Unsuccessful consultants may request feedback on how they scored. The selection committee should document the review of proposals and the interview. The committee needs to decide in advance how much feedback they are prepared to give.

[17]: Terms of Reference

The terms of reference is a short description of the project and what you want produced. The terms help explain your project to the consultant and keep things on target. They also help the consultant estimate the cost of doing the work.

The terms of reference (project description) should:

  • outline your understanding of the problem to be solved or the job to be done
  • specify your objectives – what you expect or want to achieve from the consultant’s work
  • state the product you expect the consultant to produce (e.g., a policy, plan, system, procedure, report or other document) and what it will be used for
  • set a schedule for carrying out and completing the work

[18]: Estimating Costs

The fees that a consultant charges to do a project or other job may vary from one consultant to another. To determine if the fee a consultant quotes is fair, consider the following:

  • the going rate for providing similar services. (Professional associations often have recommended rates that consultants follow.)
  • limits that funding companies place on consultants’ fees
  • the consultant’s area of expertise, experience, skills, reputation and knowledge
  • the consultant’s expectations concerning workload and completion time for the project
  • benefits to the company – short, medium, and long-term
  • the finished product – the kind and amount of data, reports, plans or systems produced
  • the training the consultant will provide to company members.

Note that the consultants are responsible for the cost of preparing their proposals and attending meetings to discuss their ideas with the selection committee.

[19]: Your Contract With The Consultant

A properly written contract clearly states who is responsible for what and helps prevent unpleasant surprises for both the client and the consultant. When you and the consultant sign a contract, you’re both part of a legal agreement. If either party feels at some point that the other hasn’t complied with the terms of the contract, each can turn to the legal system to set things right.

You can hire a lawyer to draw up the contract, but you don’t need to. Instead, you can get standard contracts and adapt these contracts to fit your own situation.

A contract is a two-way street. You expect the consultant to do a good job, produce acceptable results, and complete the work on schedule. The consultant expects to be paid promptly for the work he or she does.

[20]: What The Contract Should Cover

The contract should include:

  • the names and responsibilities of the client and consultant (who does what)
  • fees and payment schedules
  • other costs
  • deadlines
  • what the consultant is expected to deliver or produce
  • who owns what the consultant produces
  • to whom the consultant’s report or other material may be released
  • level of confidentiality expected
  • if it is acceptable for the consultant to sub-contract

This is only a basic list of what you should put in a contract to avoid problems later. Use your judgement in deciding what else you should include.

[21]: Paying The Consultant

Everything in the following list should be included in the contract:

  • Fees:All contracts should clearly set a maximum amount for expenses and for the entire job.
  • Method of payment:Contracts should state how you’ll pay the consultant.
  • Progress payments:Progress payments are made when the consultant has completed a specific task or reached a given point in the job. Usually, contracts provide for progress payments if a job is a large one or will extend over a number of weeks or months. Be sure to make a progress payment only when the consultant is entitled to them.
  • Advances:Advances are paid to consultants only to cover out-of-pocket expenses. You never pay the consultant’s fees in advance.
  • Penalties:Sometimes a contract provides for a penalty if the consultant fails to meet deadlines either for particular parts of the contract, or for completing it. Usually you’ll charge the consultant an amount of money for each day, week or month, etc. that he or she is behind a deadline.

Note: Sometimes the original timeframes are unrealistic and extensions become necessary.

Expenses and Other Costs

Make sure that the contract requires the consultant to submit receipts for all personal out-of-pocket expenses such as meals, hotels or transportation. The same is true for all other expenses like the cost of hiring other people or renting equipment to get the job done.

Make it clear that the consultant must explain if expenses will be more than stated in the contract.

Remember, the whole idea behind drawing up a contract is to avoid misunderstandings and surprises!

[22]: How To Pay The Consultant

The methods of payment most often used include:

  • Hourly fees:Use only for consultants such as lawyers and accountants who usually bill this way.
  • Daily rates:Use if the amount of time to do the work is hard to predict, but where you have to control the consultant’s fees.
  • Fixed price or lump sum: This is often the preferred method of payment. It is easy to budget for and administer. The price includes the consultant’s fees and all other costs to do the job. This method is appropriate when you know what work is to be done or the consultant’s job is to produce a specific unit of work.
  • Fixed price for fees with limit for expenses:This method is used often. Use it when you know the amount of work ahead of time, but when you can’t predict an exact amount for expenses such as telephone, transportation and printing.
  • Retainer:Use the retainer method when the consultant’s services are needed on demand. You pay a set amount, and he or she agrees to be available whenever you need work done. If the amount of work is hard to estimate, you can reserve a set amount of the consultant’s time for a certain period or for the life of the project. Payments are usually made on a regular schedule – for example, every 2 weeks or once per month, even if you don’t use the consultant in that period.

[23]: Hiring a Consultant Means Consultation!

One of the keys to getting the right consultant to do a job that’s right for your company is to work as equal partners. The important thing to remember is that you can’t hire a consultant to come in and tell you what you need. You can’t walk away when the consultant arrives and expect that he or she will solve all your problems. Hiring a consultant means consultation. You consult with each other.

Before a consultant even arrives on the scene, your work has already begun. You have already defined or examined the problem. By examining the problem, you are really helping define its root or source and possible solutions.

[24]: Getting Started – Describe The Project

You begin by sending the consultant the terms of reference. This was outlined in a previous section.

[25]: Choose A Project Leader

It’s a good idea to choose a leader to manage the project. The project leader is the link between the consultant and the company. Both the project leader and the consultant should meet often and regularly to review progress and to keep track of expenses. The project leader also meets regularly with company members to let them know how things are going.

[26]: Responsibilities of the Company and the Consultant

If the consultant and the company work together, the results of the project will better meet the community’s goals and produce lasting benefits for the people within. The chart at the end of this document shows what you, the client, and the consultant should do to help make the project a success.

[27]: Did We Get Our Money’s Worth?

When the consultant has finished his/her work for you, it is very useful to review the whole experience. Look at both the accomplishments and problem areas.

  1. Did the consultant fully honor the contract?
  2. Did the consultant’s work contribute to company growth, development and independence?
  3. Did the project achieve its goals?
  4. Did the consultant come up with reasonable findings, conclusions and recommendations?
  5. Did the plans work out as hoped?
  6. Was the report (if part of the project) clear and helpful?
  7. Did the project go smoothly, without misunderstandings?
  8. Were expectations realistic?
  9. Did you and the consultant work well together?
  10. Did you allow enough money in the contract to complete the project?
  11. Did the consultant provide useful information or teach skills to company members?
  12. Would you hire this consultant again?
  13. Would you recommend this consultant to other communities?

The bottom line is: did the consultant help the organization or company solve the problem? Is your company better off as a result of the services of your chosen consultant?


Choose consultants carefully and you’ll usually get the kind of end result you need. Always say exactly what you want. Supervise the work performed. Be demanding – but fair – about the final product you accept.






Leave a Reply