It would be viewed I am sure, as self serving to say every business could use a consultant. The better question is: “Is the juice worth the squeeze.” Do you have issues that are costing you money, where the results will more than offset the cost of a consultant? Sometimes the loss of revenue is not so easily quantified. You may have organizational issues creating friction that causes bad attitudes affecting productivity. If this has been going on for a long time, the poor production may be considered the norm and therefore will not be so evident in financial analysis.
This brings up the main reason for using a consultant. Forgive me for being trite but it is the “forest for the trees” syndrome. Managers and owners are most often very competent people, and usually great at solving problems and coaching their staff. If not, they would not be in the position they are in. But if you cannot see the problem, you cannot solve it.
Consistent problems in organizations do not happen overnight. The ones that do are usually solved by management quickly. The more nagging chronic problems occur so slowly that they are not so easily noticed until they begin to do damage. It is best if you can find these issues before the real damage is done, and a consultant will most often be able to identify these issues.
I was consulting for a car dealership that had an issue in the used car department. This dealership was not turning used inventory fast enough to get the return on capital they desired. The marketing was top shelf and the staff very competent. The root cause of the problem was that it was taking 12 days on average to get a used vehicle from trade in or purchase, to on the lot and posted on the internet, thus creating a period of frozen capital. While the vehicles were in the process of getting ready, the capital was no longer at work. Reducing the time to get the vehicles on the lot would thaw the capital so it could be used to buy more inventories and thus accelerate the velocity of the capital, as well as the production and profitability of the used car department.
Often the first reaction to a problem is to add more staff. More people are rarely the solution. Adding staff increases expense and frustrates management as they try to accomplish an increase in net return on sales. Our recommendation as a solution to this problem was to formalize a process, break some paradigms by reassigning responsibilities and make better use of existing technology, thereby reducing the time to get a car on the lot and posted on the internet to three days. Since industry statistics suggest that over 70% of used vehicle sales are of inventory less than 15 days old, the benefits of a three day turn around in reconditioning are huge.
How was I able to see this solution? It is almost with embarrassment that I tell you that I simply saw this process somewhere else. Tony Robbins, the famed and hugely successful motivational speaker says this, and I paraphrase with my apologies to Tony: “If you want to be good at something, find someone who is among the best at it and copy them.” Consultants become good through experience and observation. I know that in my business career I have made a lot of mistakes. I often tell people that assuming I have learned from all my mistakes, I have made so many that I could be the smartest man in the world. When you hire a consultant, you are employing experience and a new point of view. How often have you said, “I wish I had that to do over again”? A consultant may stop you from making a mistake he or she has either already made or has seen someone else make.
I would suggest you ask yourself the following questions:
1. Are you keeping as much of your revenue as you would like or expect?
2. Are you at or above your peers in sales or revenue levels?
3. Is your market share above industry standards or your expectations?
4. Is there interdepartmental finger pointing in your organization?
5. Do you pull monthly financials and can you use them to measure departmental productivity?
6. Are you generally happy with the way things are going in your company?
If you answered yes to any of the first four questions, or if you answered no to questions five or six, you could probably benefit from consulting.
Performance Business Consulting is available for complimentary initial consultative interviews. Make your request on our web site at www.performancebusinessconsulting.com. I am humbled that you have taken time to read this article. Thank you.
Lee Denny
Performance Business Consulting
“We make your business perform”