How come only successful companies use consultants?

“I know what’s best for my company.  There’s nothing some guy can tell me—he doesn’t know my business.”

An engineering student was in college, and he was assigned a project to design a concrete structure three stories high. His classmates set to work, grouping themselves into teams and discussing various approaches. This student thought he could do a better job of the project working alone instead.  A few weeks went by, and he worked tirelessly on his design. In the end, he thought it was pretty good, and expected accolades – and a good grade. So, he turned it in and waited for the professor’s response.  The next week, he gets his design back. On it, the professor had written: “Building falls down. Many people die. You flunk.”  Turns out, the student had neglected to include some crucial weight-bearing supports in the structure, and, had it actually been built as designed, it would have collapsed….According to our 2009 State of the Industry Report, only 15 percent of companies will hire a consultant this year. That’s a tiny fraction of the overall industry. And in a more recent straw poll of Lawn & Landscape readers, a vast majority – 88 percent – said they spend nothing on consultants.

Now, I believe that an owner knows what’s best for his company. But I also know that a fresh set of eyes and some tough questions can make almost any idea, project or organization better. Bruce T. Moore Sr., president of Eastern Land Management, in Stamford, Conn., doesn’t look at hiring a consultant as someone come to meddle with his business. He’s sees it as hiring an ad hoc adviser. “In many cases they can also act as a board of directors and provide an outside perspective of the business status for increased growth and profitability,” Moore says of bringing in consultants.  The idea is that, by involving other people and other perspectives in your enterprise, you build a stronger organization and eliminate some of the risk of your company collapsing. In the end, the building stays up, many people are happy and you pass.

Chuck Bowen, Lawn & Landscape—full article at http://www.lawnandlandscape.com/lawn-landscape-0910-building-stronger-business.aspx

Your building might not collapse but your company might.  You are an expert in the technical aspects of your business and it is unlikely that anyone will be able to tell you how to build a better product—but are you an expert at building financial controls, organizational structure, sales system and the management system for your your company?  Like the engineering student, you probably built this working alone.

Only 15% of companies will hire a consultant this year—but then 70% of all small businesses go out of business in their first five years and 70% of the remaining businesses die in their next five years.  In successful companies an annual budget of 5% of their gross revenues is invested in outside consultants.  The investment can be categorized as out-sourced management and in the long run is much more effective and less expensive than hiring management employees. Visit the attached link to the same issue of Lawn & Landscape Magazine for examples of how small businesses use consultants.

http://www.lawnandlandscape.com/lawn-landscape-0910-outsiders-perspective.aspx