How to Find An Independent Sales Representative For Your Small Business

Independent sales rep and rep company is an important aspect of several wholesale companies' sales strategies. For some, hiring an in-house sales representative isn't cost-effective, or they need to get their feet wet swiftly without committing to a salaried team.

Others understand the value of an independent representative's current relationships and networks, leading to new business prospects in established markets and entry to new regions. For whatever cause, wholesalers frequently turn to independent sales reps (also known as manufacturer's reps) to expand their sales force. These self-employed reps either run their businesses or work for a company that hires a team.

They operate as independent freelancers on commission alone (leading to increased commissions on every order) and may promote different businesses, but there is no risk in employing an independent rep. Here's a brief breakdown if you're considering recruiting independent reps and are unsure where to begin.

looking at hiring a sales rep for their small business

Why Does Your Small Business Needs A Sales Rep?

Sales are the backbone of any profitable business, as it brings you clients who provide you with purchases and increase your sales ladder, which you wouldn't have if you didn't have salesmen. Many entrepreneurs believe that by utilizing the most up-to-date technology, they will be able to secure these desirable orders.

This might work in some cases, but for business owners who want to see their brand name in the spotlight, a vital element of the sales jigsaw is figuring out how to sell to clients without having the funds to hire a skilled sales team. Interpersonal selling will considerably boost your chances of success, regardless of how technologically advanced you are. Your cash-strapped sales problem can be solved with the help of sales reps.

Why Does Your Small Business Needs A Sales Rep

How to Find An Independent Sales Representative For Your Small Business

Now when you've determined that independent sales reps should be a member of your sales team. How do you identify a rep in your desired region with the domain knowledge to market your merchandise?

Your commission-only salesperson will require the correct soft skills and charisma to suit your organization and available position and sales experience. Determine the required level of expertise and relevant skills for the position.

Here are a few suggestions:

Search Independent Representatives At Exhibitions

Search Independent Representatives At Exhibitions

Trade exhibitions are fantastic places to meet new people, not only for acquiring new clients but also for discovering independent reps. Visiting significant trade events in your business may introduce you to independent reps or companies marketing other brands and/or seeking new lines to promote. To create ties with these types of acquaintances, strive to target these trade shows.

Use A Database Or A Rep-Matching Facility

Use A Database Or A Rep-Matching Facility

Numerous websites connect independent sales reps and marketing professionals with distributors, wholesalers, and manufacturers who require their expertise. Enterprises require commission-only sales reps, while sales professionals go to these portals searching for new product lines to promote. Just make sure you use an accurate and non-misleading job title, current market salary range, and additional qualities you require for the job in your application to recruit top-performing salespeople for your business.

Use Linkedin To Your Advantage

Use Linkedin To Your Advantage

Social media profiles can also be beneficial. For example, following appropriate LinkedIn groups or running a quick internet search for sales reps serving in the company you're searching for. These social sites are good places to start looking for independent reps in your business.

If your firm's online presence and employment ads inspire confidence in your organization and brand, only then will you be able to attract the amount of commission-only sales applicants you desire.

Request Recommendation From Established Retail Clients

If you already have a client base, ask them to suggest sales rep candidates or representative companies that work on a commission basis. They've contacted or interacted with in the past through any sales organization. As purchasers, they've probably worked with many sales reps in the past, so this strategy can be a wonderful way to identify a potential sales rep who retailers appreciate.

Publish The Job On the Internet Via Job Searching Sites

use job sites to find a sales rep

Whereas this strategy is unlikely to produce many focused results, it certainly won't hurt to include it in your research methodology. This exercise will, at the absolute least, require you to write a specific job specification highlighting the main characteristics you're searching for.

Publish An Advertisement Or Request In A Trade Magazine

This is a far more specific strategy than the earlier point, as journals or sites devoted to your business or the freelance sales rep network are more likely to link you with just the right people. However, remember that other organizations are dedicated to various businesses, so do your homework.

However, remember that even if these reps aren't paid, they'll still be selling your product to clients in any of these instances. Therefore, make sure you undertake a thorough hiring process, get a clear sense of their industry experience and the quality of their existing client relationships, and ask for credentials to back up what they've said.

What Are The Pros and Cons Of Having A Sales Rep?

Starting and operating a successful business depends on various factors based on your business.

Pros

Even Small Businesses Can Recruit Highly Skilled Independent Sales Representatives

An Independent sales associate or B2B sales expert is usually experienced and productive. They also have a superior track record of generating revenue than an in-house sales team. Since they typically have extensive and successful work histories, including corporate experience with significant, major corporations.

This is fantastic news because it implies that you, as the latest and smallest company in your field, will be able to recruit the highly qualified and experienced salespeople available!

Employing Independent Sales People Has a Big, Underappreciated Benefit

hiring an independent sales rep for your small business has large benefits

You can benefit from their experience a lot. As they will not only keep you informed about what is proceeding in the business and what your competing companies are doing, but they will also provide you with very specific guidance like studying this rival for interesting ideas; creative packaging; price management; recommendations on sales materials; which product appears to be a champ; increasing the advertising budget.

You will be blown away by the ideas and information you will receive from independent reps! Furthermore, they will make it much more enjoyable to be a part of the business.

You'll Have Less Management Time With Experienced Reps.

As freelance salespeople are typically more competent than in-house salesmen, so they require less supervision and guidance. So if you recruit them, you'll unlikely have to get a sales manager, and they'll probably require even less of your attention than an inexperienced in-house rep.

As Your Sales Increase And Decrease, So Do Your Sales Expenditures

A talented sales professional is a huge benefit for a growing organization that doesn't possess a huge amount of capital initially, and it also comes in handy during recessions.

Independent Salespeople Have A Long Track Record

Representatives that have built a solid reputation will be there for a long time. They're not going to vanish after a few difficult months on the road, as many under experience salesmen do. Don't miss that if you have your individual sales staff, the cost of travel and other expenditures can easily exceed the base salary. You're providing your organization a competitive edge by adding a committed, coachable sales rep to your workforce.

Cons

You Won't Be Able To Entirely Oversee Independent Sales Representatives

You Won't Be Able To Entirely Oversee Independent Sales Representatives

They will only promote things they believe have the best possibility of selling and profiting. They will typically focus on selling the greatest merchandise from their most well-known brands.

Take Care Not To Fall Victim To The "1st timer" Phenomenon.

You're an obvious victim of the "first-timer" phenomenon as a new company. After the representative has introduced your goods, he or she will try to place orders as soon as possible. Your item or service may be removed from consideration if this does not occur.

However, if you have a formal contract to the contrary that is exceptional in this industry, the independent rep you're working with could be selling your competition's items as well! Regardless of how seasoned your new sales professional is, they will have to be briefed on the intricacies of your sales cycle, brand, and company profile.

Remember that despite a long-term connection with a salesperson, you must consistently "sell" them on the possibilities of your current and new products.

Small Business Consultant

As a small business consultant helps you in many aspects of your start-up, like handling your financial targets and advising you in recruiting beneficial employees, small business consultants help you find the right sales rep more conveniently. As they work with different business people on numerous business-to-business basis, they come in contact with talented commission-based sales representatives; therefore, they can filter out the most appropriate commission sales reps for your product.

Conclusion

As with most minor manufacturers and suppliers, employing and establishing a strong infrastructure of highly skilled commission sales representatives will be far more effective than attempting to develop the company's full-time sales team. Gain knowledge from them by getting to know them, supporting their endeavors, and being compassionate with them. An independent sales rep can be your sales superstar after having command of your business proposition and sales process.

How to Sell a Business Quickly

Selling your business is a huge decision for you and potential buyers. Unfortunately, it's also a complicated and time-consuming process that can take several months or even years before you reach a final sale price with an interested buyer.

However, you can streamline the process if you know how to sell your business efficiently. And while there isn't a magic solution to the sales process, there are many steps to take and mistakes to avoid to make your life easier. Not to mention, there are online creative ways of selling businesses. Plus, you can always utilize a small business consultant to assisted you with selling a business quickly.

So follow along as we'll explain how to sell a business quickly and to the best buyer.

How to Sell a Business Quickly

At a Glance

In summary, here are the steps you should take when selling your business:

Other than those, there are some common mistakes to avoid, such as impatience, dishonesty, not planning for the sales process, and not negotiating.

How to Sell a Business Quickly

Selling your business is a very complicated process, and there's no shortcut to getting the best deal in a short period. You could hire an experienced business broker or small business consultant if you can afford the price.

But if you can't afford the broker's commission, you can prepare your business for sale by valuing it accurately and presenting its favorable records to potential buyers.

Once you attract buyers, maintain the due diligence process, screen your serious buyers and meet with them, and be ready to negotiate.

How to Value Your Business Accurately To Sell Your Business Fast

Before you start your journey, you need to set an asking price for your business. You should also set a reasonable price, which can be hard to determine if you don't know what you're doing.

So here are the best tips to determine the value of your business accurately.

Calculate Company Assets

Calculate the value of your business assets and sum them up. This can include real estate, equipment, vehicles, inventory, raw materials, and land. These are all tangible things with relatively straightforward values, but don't forget to subtract liabilities from the sum for an honest tally.

Determine Your Company's Financial Performance

Although revenue can be misleading because it doesn't factor in costs, it's still essential when determining your company's value. Sometimes, a rough estimate of the selling price is about 3x the business' annual income.

It's also helpful to know how your business revenue holds up compared to the industry benchmarks. This is one of the most important factors when trying to determine how to sell a business quickly.

Another helpful measure is EBITDA, or earnings before interest, taxes, depreciation, and amortization.

EBITDA is a useful alternative to net income that measures the company's overall financial performance by factoring in costs that often don't usually make it to cash flow statements.

ebitda

Perform a Cash Flow Analysis

Performing a cash flow analysis gives you great insight into the company's current financial situation. It can also help you forecast how much money the company will make in the future, which is a robust measure for prospective buyers.

Consider Any Strategic Advantage

Many companies have intangible assets that cause valuation debates between buyers and sellers. But before you get to that stage, you should consider them and their value first. If your business has a strategic advantage trying to understand how to sell a business quickly will come naturally as you have a significant advantage over the others.

For example, consider about your company's geographical location. A hillside bar with a beautiful view is more valuable than an average urban one.

Brand strength and online popularity are also critical and can give your business a competitive advantage, which is another strategic advantage.

Think about what makes your company unique or rare and factor it into the overall value. And yes, we know it's hard to pin a price on these, but you can compare them to industry benchmarks or contact an experienced broker to get an idea. Even the strong team you created could be considered a unique advantage.

How to Search For Qualified Buyers Or Buyer

Search For Qualified Buyers Or Buyer

There are many places to list your business, and it all comes down to your situation. For example, if it's an online business, you can list it on business selling websites like BizBuySell or BusinessesForSale or even social media. There are also platforms for online businesses only like Flippa.

If it's a small business in a niche industry, you can list it in magazines or trade publications. You could also sell your small business online for a small subscription fee.

When listing the business, make sure to present it well by naming its strong points, using a sleek and attractive title, and uploading high-quality, non-revealing pictures.

(Optional) Selling Behind the Curtain

Larger businesses are rarely listed on business selling websites or magazines because their sales often happen behind the curtain. And that's why networking is vital in business.

If you have a friend, family member, or acquaintance you know might be interested in buying the business, you can approach them.

You can also sell to a loyal employee or executive that you trust through an employee stock ownership plan, which comes with some tax benefits.

Determining and Meeting Qualified Buyers

Meeting Qualified Buyers

You'll eventually start attracting interested buyers, and dealing with many questions and offers can be draining.

Not all offers will be serious, so you should screen buyers before proceeding.

If a potential buyer asks a simple question, you can answer them over email. But once things start getting serious, you can follow up with an online or face-to-face meeting.

During the meeting, you should ask some questions to assess serious buyers. For example, ask them if they already have the capital to buy your business. Ask for information about their assets and maybe even a credit report if you're using seller financing.

You'll also want the new owner to be competent enough to run the business smoothly. After all, there are employees and customers who rely on it.

Therefore, you should ask the potential buyer if they have any experience in the industry or running a business.

Some buyers might refuse to share this information with you. In our eyes, that's a red flag but use your best judgment.

How to Sell Your Business

So you've determined the value of your business and found your prospective buyer, now it's time to sell your business. Ideally, you want a smooth transition of ownership, but you can't rush it too much either.

So here are the best tips when selling to interested buyers.

Preparing Your Business for a Sale

Preparing Your Business for a Sale

When you sell anything, you tidy it up to attract a potential buyer. The same goes for businesses, and you should prepare yours similarly.

Your office or building should be clean, tidy, and presentable. A weary building or messy office is a bad sign for interested buyers.

If you run an online business, make sure your website is neat, has a straightforward user interface, and doesn't have bugs.

Be ready to showcase and describe the different parts of your business to the potential buyer. A new business owner will also want to know about running the business, such as daily operations and customers.

You should also have your company's paperwork ready when the buyer asks.

Picking the Right Moment

External factors, such as industry demand and government policies, can affect your company's value. So it's not a great idea to sell your business after a sudden change.

Other controllable factors like profits and incoming customers indicate long-term success, which new business owners are looking for.

Ideally, you should sell your business when the market is healthy and your business is thriving.

The Due Diligence Process

The due diligence process

The due diligence process is vital when buying a business between both the seller and the buyer. And your potential buyer will be looking forward to it, so you should prepare your documents and papers accordingly.

Due diligence is usually the longest step in selling a business, but you can make it faster by organizing your documents, records, and financial statements in advance.

These documents should show the buyer your business' value and repel incoming objections as much as possible.

A business broker can also help you prepare for this step and will stand by you during it to ensure everything runs smoothly.

Here are some of the documents you should prepare:

Negotiate With Potential Buyers

You might be exhausted during due diligence. You could get tempted into accepting the first offer you receive.

Negotiating is always tedious because you want the highest price possible, but your buyer wants the opposite. And although you may have set a reasonable price, be ready for the buyer's counter-offer.

You could also set your initial price a little high so that you're okay with a slightly lower number.

(Optional) Hire a Business Broker

Hire a Business Broker

Small business owners don't need business brokers if they're selling a small business to a relative or acquaintance. But in most other cases, you'll need a business broker unless you're ready to go through extensive work.

Trying to sell your business under stress and fatigue can eventually land you a poor deal, especially since you'll still be running business operations as usual until you sell it.

We recommend you hire a business broker to take that responsibility off your shoulders.

Most brokers charge a fee of up to 10% of the sale value. So if you think you can make a successful business sale without a broker, you can skip this step.

But for most people, business brokers are a must, especially if they want to sell their business fast.

Online Creative Ways to Sell Your Business

Selling a business fast doesn't always require listing it on business sale websites or other mediums. For example, if you run a blog about the company and regularly publish quality content, you can attract buyers more naturally.

And if you run an email list through your blog, you can market your business to your followers there.

You can also leverage the power of social media and online forums to market your business there. For example, showcasing your business on Facebook or even sponsoring an Instagram or TikTok influencer can spread the word quickly to millions of onlookers.

If you can find an influencer related to your business niche, you'll likely attract more interested buyers who weren't forced into seeing an ad they don't care about.

Lastly, you could also sell your business fast by networking. The people around you know you best, so marketing to trusted ones will save you a ton of hassle.

Online Creative Ways to Sell Your Business

How to Sell Your Business to a Competitor

It might feel strange selling to your "career rivals" if you've been in the industry for years. But when it's time to sell, your competitors can be a tremendous resource, so don't let your emotions disrupt the deal and learn to sell your business to your competitor safely.

However, don't trust interested competitors too much, either. After all, they might be there to learn more about how you run your business for some "inspiration," so don't divulge anything crucial quickly.

You'll also definitely want them to sign a non-disclosure agreement before important talks begin because you don't want them handling sensitive information if your negotiations fall apart.

A successful sale to a competitor can be great if all the parties have good intentions. Besides, you can even ask for a contract as a consultant or similar in the new merger.

How to Sell a Business Without a Broker

Not everyone needs a broker. So whether you can't afford a broker's fee, you're selling to a trusted person, or otherwise, here's how to sell a business without a broker.

The process is mostly the same as we described above. But instead of relying on a broker for paperwork and careful research, you'll have to do it yourself.

Prepare selling points that enhance your company's values, such as strategic advantages, sales records, and revenue streams.

When you find and screen buyers, you should prepare all your records before a meeting.

You should also hire an attorney to prepare a non-disclosure agreement (NDA) for every potential buyer to sign before you start negotiations since you will expose them to confidential information.

Once you agree, your buyer might also request you to sign a non-compete agreement.

Common Mistakes to Avoid

Common Mistakes to Avoid when selling your business

Not knowing what you can do can land you an unfavorable deal or detract prospective buyers from considering your business. And unfortunately, it's very easy to make mistakes, especially if it's your first time selling.

But don't worry; we're here with the most common mistakes that many business owners make when selling their business. Avoid them, and the entire process should be much smoother.

Neglecting Your Business

We know work is tedious. You might start to slack off once you decide to sell your business. However, this is a crucial mistake because your business will suffer during that period, and it might even start losing money.

Dishonesty or Exaggerations

Honesty is always the best policy. Of course, it's natural to exaggerate when selling anything, but if you blow the favorable parts of your business out of proportion, you'll eventually be found during due diligence.

Dishonesty or Exaggerations

Frequently Asked Questions

How Fast Can I Sell My Business?

Depending on your business and the current supply and demand in the industry, a quick sale can happen in as little as 2-3 months and maybe even less if your company is an attractive prospect.

What Is the Fastest Way to Close a Business?

This depends on where your business is registered. If you decide to close and can't find buyers, it'll take several business days or weeks to finish your dissolution papers and cancel your licenses and registrations.

It could also take months to resolve pending financial obligations like debt and unpaid wages.

How Do You Sell a Struggling Business?

Start the selling process normally by preparing your company's financial records and searching your buyers. Then, when it's time to value your business, set a realistic price, but don't go too low either.

You should also consider your strategic advantages, such as geographical location or brand strength.

And if you're feeling lost, you can seek professional help from a good broker or small business consultant.

The Bottom Line About Listing Your Business For Sale

To sum it up, knowing how to sell a business quickly is key to getting a good deal without draining your energy and time too much. So make sure you plan for the sale thoroughly in advance and prepare your documents and records for the due diligence process.

We recommend most business sellers hire a business broker to do the heavy-lifting because they'll take a lot of strain off your shoulders, especially since you should continue running your business until the sale.

Screening buyers is also crucial for a business sale since you want someone with the means to buy the business but also keep running it effectively.

How to Deal With Cash Flow Problems in Small Business

Business is all about money. As any small business consultant will tell you, you need to maintain a positive cash flow to keep a healthy business that can pay bills. After all, small businesses are especially liable to cash flow problems.

Unfortunately, it's easy to fall into a massive cash flow problem after the slightest oversight, which is why so many businesses hire financing experts to prevent disaster.

Even if your business cash flow has been doing well for a while, you should still watch your cash flow forecast and learn to manage cash flow effectively, especially as a small business owner. Otherwise you'd be risking your livelihood.

But in case disaster strikes, do you know how to deal with cash flow problems in small business? That's what we'll cover in this article, so follow along for more useful tips and information.

What Is Cash Flow?

what is cash flow

As its name suggests, cash flow is an indicator of how much cash goes in and out of the company. More specifically, cash flow is the net between inflows (money coming in) minus outflows (spendings).

A positive cash flow is a sign of a profitable business. But when outflows exceed inflows, then it's losing money.

For small businesses, the most critical factors that affect cash flow are the accounts receivable from sales. If a company doesn't have paying customers, it won't survive.

To clarify some common confusion about cash flow, it's not the same as revenue or profits.

Revenue is the total amount of money coming into the business without factoring in spending or other expenses.

On the other hand, profit is the money left at the end of a fiscal period (month or year) after covering all business expenses.

What Are Cash Flow Problems?

What Are Cash Flow Problems

Cash flow problems emerge when the business doesn't have enough cash (specifically, liquid cash) to pay off its expenses and liabilities.

Having a negative net cash flow for a brief period doesn't necessarily mean the business is struggling financially. Sometimes, a company has to make a large purchase or investment, which overshadows its profits. Other companies like summer resorts experience seasonal fluctuations, which can be deceptive of the company's actual state.

But when poor cash flow continues over an extended period, it's a sign of the company losing money.

How to Overcome Cash Flow Problems

Now for the main course of the article: the solutions to cash flow issues.

As there are many causes of business cash flow problems, some of which could be unique to your situation, we can't cover every possibility. But we'll talk about the most common ways to solve cash flow problems. Understanding how to deal with cash flow problems in small business can drastically increase the businesses likelihood of survival.

Encourage Early Payments

Early Payments

Small business owners should always encourage their customers to pay faster, especially if they experience cash flow problems. Also, an early payment can improve your cash flow and give you more options throughout the month.

And we know no one likes to send invoices. So you'll also be saving yourself and your employees a lot of hassle that usually goes into invoice factoring, waiting for clients to pay the invoices, and dealing with late payments.

If you have clients that pay you a fixed amount monthly, you can set up auto-billing so that the amount is consistently paid.

You could also let clients choose their payment day. Not everyone gets paid on the first day or even the first week of the month, so some might prefer to pay on a day of their choosing. So when you give your clients this option, you incentivize them to pay on time.

Lastly, you could offer discounts or other incentives to early-paying customers, especially long-term ones.

Set up Electronic Payment Systems

Paper cash is old-fashioned nowadays since digital and online payments are more convenient for most clients.

Accept credit cards in your store since it encourages customers to buy and can speed up payments. But make sure the credit card fees are worth it for your business.

You should also accept online payments. Clients find it easier to pay with their credit card from home than at the store. So encourage them by giving them that option.

Take a Short-Term Loan

Short-Term Loan

Short-term loans for working capital are easy to dismiss because of their higher APR. However, they can be a helpful lifeline to balance out your cash flow statements during a rough patch since they're easy to get approval for and can be paid out as quickly as one day.

Besides, they can be a cheaper option than long-term loans against your bank account with a lower APR because of their shorter length.

Remember that a sudden cash inflow won't magically solve cash flow problems. You'll still need to work, and borrowing money should be a helpful tool rather than a solution.

That's why we recommend you establish a solid plan before taking a business loan, though, since otherwise, you'd only be delaying your problems instead of solving them.

Also, read the terms of your loan before finalizing it to make sure you're OK with all the caveats. One of the ways how to deal with cash flow problems in small business can be with outside financing.

How to Avoid Cash Flow Problems

Now that your numbers are solid again, it's time to explore some cash flow management techniques to avoid problems in the future.

Create a Cash Flow Budget

Setting a budget is a standard solution to financial problems in many aspects of life, not just business. It's a good way of tracking your expenses and staying within a reasonable spending limit compared to income.

Calculate how much cash goes into your business and try to set a monthly budget that doesn't exceed it. Then, as your day-to-day business operations go, add your accounts payable to a spreadsheet that tracks how much you spend compared to the budget.

And if you run a seasonal business, you can set an annual or seasonal budget for up to six months. Also, try to save money earned in high-traffic months and allocate it to low-traffic ones.

Furthermore, a cash flow budget can give you an idea of which months to expect more cash and which might have a deficit. You can also estimate how much money you need to survive the year, which is essential when making certain decisions. With a solid cash flor budget you won't find yourself asking how to deal with cash flow problems in small business.

Reconsider Overhead Costs

Overhead Costs

High overhead costs, like rentals and bills, are always an annoying part of running a business. And while you'll always have to pay them, you need to be mindful of the options you choose.

You don't always need the fanciest office or the most luxurious cars for your operating activities. Instead, consider the costs you can compromise and eliminate anything unnecessary. Otherwise, you'll be fighting a long battle with them, which could end your business.

Keep an Eye on Your Cash Reserve

Many business operations require liquid cash to complete, and if you don't have enough in your reserve, you'll fall into debt. And if you neglect it for too long, this debt can snowball and have catastrophic events for your business.

So make sure you always have enough liquid cash on the ready if you need to pay some small daily expenses or wages.

How to deal with cash flow problems in small business is all about monitoring your business bank accounts.

Famous Companies With Cash Flow Problems

famous businesses with cashflow issues

No one is safe from cash flow issues, even giant corporations. Just ask Nike, who suffered an almost business-ending cash flow problem in the 70s as suppliers pressured the company.

On the positive side, this shows that facing cash flow problems isn't the end of the world, and you can still recover from it and become a successful business.

However, these problems still need proper management. Otherwise, your company might end up like RadioShack, the renowned electronics store that went out of business after failing to keep up with technology, trying to expand too much, and a few other factors.

Frequently Asked Questions

Why Do Small Businesses Struggle With Cash Flow?

Common cash flow problems include:

You're also likely to fall for cash flow shortages if you don't forecast your cash flow. This often leads to sudden crashes or even business failure.

How Can Small Businesses Improve Cash Flow?

How Can Small Businesses Improve Cash Flow

There are many ways for small businesses to increase cash flow, such as leasing instead of buying, offering customers incentives like discounts, checking your customers' credit scores, buying in bulk to cut down costs, improving inventory management, and if things are desperate, increasing your prices.

You'll also have to study your cash flow on a regular basis and keep an eye on cash flow projections to avoid problems.

Final Words

This has been our tried-and-tested advice on how to deal with cash flow problems in small business. It's important to be familiar with these solutions because cash flow issues can easily lead to the end of your small business.

Also, learning to fix cash flow problems isn't enough. You should also learn how to avoid these problems in the future, or you might fall into cash flow difficulties again.

What Is A Small Business Consultant

Hiring a small business consultant can be one of a business owner's best moves. You went into business as an expert in what you do and offered your customers a fantastic product or service. Still, business involves many disciplines, and we can't always be an expert in all of them. So what is a small business consultant? If you've wondered what one is and what they do, this article will clarify.

Small Business Consultants

Small Business Consultant

A small business consultant is generally defined as someone who gives business owners advice on specific business areas, developing skills, and problem-solving. When hiring a business consultant, a business owner has identified areas of the business that can be improved or where the owner might feel they lack the necessary skills for that aspect of the company.

Sometimes we don't know what we don't know. A small business consultant might also come into a business to look over the company as a generalist and identify areas that deserve a further look or deep dive as improvement is likely.

The result of hiring a great small business consultant will always show on the bottom line. Whether the business becomes more operationally efficient, brings in more customers, or increases employee engagement, it always results in higher profit and happier owners.

What Is A Small Business Consultant

Types of Business Consultants

The wonderful thing about business is that it is multi-discipline, which makes it always interesting, a great challenge, and new ways to improve can always be found. At the same time, the multi-disciplinary nature of business can be a very difficult or even bad thing about being in business. Owners can be outstanding at one thing and struggle in another area that severely impacts the business' viability.

When asking yourself, "what is a small business consultant?" think of someone who can improve the company's specific areas. There are many different types of business consultants, and they can range from an outsourced CFO to the online marketing expert that has created your web presence. Here are the various business areas that business consultants might have as their specialty.

Finance Consultants

A finance business consultant can find things hidden within the company's income statement that owners might not often know exist. If costs are trending in the wrong direction, you are growing beyond your ability to finance it, or company cash flow is tight, your finance pro finds those issues and helps resolve them. This consultant's primary purpose is to identify trending issues before they become big problems and set the company up for continued success. They can be one of the most extraordinary things for your company.

Finance Consultants

Marketing Consultants

Pulling in more customers more efficiently is the name of the game. Not only does a marketing consultant strive to bring in more customers but also higher quality customers that perceive your brand positively and are willing to pay more for your products or services.

Marketing consultants can range from generalists to a specific focus, like online marketing and branding. A great marketing consultant works to up brand your company and capture more business at the lowest cost. You might be currently spending on forms of marketing that are expensive and inefficient that your consultant will replace with more efficient alternatives.

Marketing Consultants

Business Operations Consultants

Operations can almost always be more efficient using methods you might not know yet. Lean operations, just-in-time manufacturing, and statistical modeling are just a few terms you might hear from your business operations consultant. When it is all said and done, they can move things more efficiently through the business, find ways to minimize inventory efficiently, cut costs, and better serve your customers.

HR Consultants

Human capital is one of, if not the most important, part of your business. Employee satisfaction, pay scales, conflict resolution, and management structure can impact you across every function in the company. An HR consultant can help you find and retain the right people, train them, and make sure your business complies with federal and state employment laws.

HR Consultants

IT Consultants

Technology is pervasive in every type of company. It improves the quality of customer service, scheduling, operations, and data analytics are all areas that an IT consultant can change for the better if not add to the business in the first place.

IT Consultants

Sales Consultants

You're always selling. If you have a sales team, training salespeople on workflows, new sales strategies, and new sales opportunities can grow your business and produce happier customers.

These are just some consulting disciplines and are generally the most important for your business. Other business consultants can get as specific as environmental, social media, and risk and compliance consulting.

Business Consultant Skills

Business consultants are usually business school graduates trained as generalists and having a specific discipline in which some additional training, education, or experience has been applied. Many have previously worked in their particular fields and moved to consulting to make a difference for business owners while doing what they love.

While they specialize in one area, they also know its impacts on other business practices within your business and how improvements in what they do can cascade across your entire company.

Business Consultant Skills

Final Thoughts On Small Business Consulting

So what is a small business consultant? Think of them as one of the best investments you can make. Whether you know an area that needs improvement or are just curious about what improvement to certain aspects of your company might look like, great consultants can guide you, institute positive change, and improve the bottom line.

How Can A Solopreneur Build A Team

People tend to start their new businesses small and alone - as a solopreneur - mostly to see if their business plan and strategy work out.

Eventually, when success starts to pour in, and their business grows in revenue and traffic, it gets challenging to handle things alone. And that is when a solopreneur needs to build a strong team that can upkeep the business growth efficiently.

However, the transition from a solopreneur to an entrepreneur is not as easy as it sounds.

Running things as a one-man army makes you selective and habitual in working in a specific way. So, if your team does not conform to your rules and you cannot transform into a delegator from a "control freak," - things can quickly go downhill.

Worry not - there is always a way out.

We can help you learn How can a solopreneur build a team in organic and efficient ways because it takes more than just hiring people to make a great team.

How Can A Solopreneur Build A Team

Plan The Hiring Process Wisely

Understanding how can a solopreneur build a team, you need to identify the number of people you need, alongside their respective positions.

But, how do you do that?

By first learning the labor demand of your business and then carefully planning the hiring process. Here is how to hire the right staff who promise lucrative future business endeavors.

small business owner interviewing a future employee

Identify The Position You Are Hiring For:

First, you need to narrow down how many sub-teams you would require, such as finance and accounting, marketing, content development, sales and revenue operations, etc.

Once you have the basic framework for your team, you can start hiring the leads for each department.

For instance, you can look for the following positions:

These names might seem fancy and a lot to hire, but you need even more hands to create a productive team once your business grows. However, you don't need to hire every one of them at once, and you can start with one or two people and then gradually expand your sole proprietorship.

Hire Smarter People

hire smart people

Moving on to the next step, as a business owner, you need to have people on your team or business partners that are even smarter than you. Now, this can hurt your ego - but it should not. Because when you want to grow successfully and achieve all your business goals, you will have to act like a "team leader" and not a "boss."

You have been a successful solopreneur now to become an effective leader, relinquish your control and accept that you cannot be a pro in every aspect. There will be someone better than you - a better freelance writer, a better virtual assistant, or even a better team rapport. So, hire smarter people than you so that they can come up with better opportunities for your business - in the end, you will still be the owner.

Moreover, you need honest people who can state their opinions while negating those they do not deem fit. Therefore, employees that speak up diligently can save you from wrong decisions and huge losses.

Instead, if you hire "yes people" who nod at every and any of your ideas, your business will lose the innovative edge, and your success curve will reach a plateau.

Avoid Work Nepotism

Avoid Work Nepotism

While many would not believe in you when you start as a solopreneur, the same people will come up when you succeed and are open to hiring. Remember, the people who were not with you in your lows do not deserve to be with you in your highs, be it your friends and family.

And even if they were with you all along, you need to avoid hiring people you know, like your relatives or friends. Because an employer-employee relationship is different than what you may have outside work, professional disagreements can lead to personal consequences and vice versa. We are not saying that it will ruin everything, but there is a great possibility, so avoid it altogether.

Furthermore, build a team with people who have leadership skills, comply with self-regulation, and are open to constructive criticism. You should not hire people who will need micromanagement but those who can take the ball from you and run with it to make the next goal instead of bouncing it back to you.

Another great idea to build a successful team as a solopreneur is to hire people from diverse backgrounds. The business industry is extremely dynamic. Especially if you are planning to expand your business on international marketplaces, having people from different backgrounds, parts of the world and ethnicities can help you with networking.

Ensure That Your Team Believes in Your Business

Team Believes in Your Business

As soon as you put your hiring plan into action by shortlisting and interviewing potential candidates, it is important to know whether they believe in your business.

But how can you do that? How can a solopreneur build a team that believes?

You can ask them to pour in their perspective relevant to your business goals and how they anticipate the future. Moreover, you can also schedule a trial period or test to evaluate their potential and analyze if they are trustworthy and competent.

You also need to analyze and evaluate their potential to grow and adapt to the business strategies. The employee should be futuristic and fit into a flexible "five to ten years" picture that aligns with the business changes.

You can ask for the candidate's samples, and work references and cross verify them to ensure that you hire the right person. A background check will also be a good idea to avoid any con persons on your team. Finally, get in touch with their workplaces and see if they have grown as professionals and benefited the company.

Because at times, people only want the job for the sake of money and not to be an asset to your business. You will have to ensure this to create a team of capable and talented candidates.

Do Not Go Off The Budget Limit

Do Not Go Off The Budget Limit

As enticing as it is to grow your business with newer, smarter people, you need to keep tabs on the process and align it with your budget. Keep in mind that you will have to pay your employees, no matter what, even when your business is lost.

Ensure that you will still profit from your net income after every expense. For example, if you can only afford four people, go for three instead of five. Because if your team does well, you can always hire more people.

However, hiring more people than you can afford can bring a bad name to your business. Because if you cannot pay them on time or have to fire a few candidates, your company can get into trouble.

It will only stir more tension and problems if the employees' costs drain the entire business budget. An easy out of this is to do the basic math and estimate the expected income of your business in the next year that the employee will help you make.

You can always hire part-time employees or freelancers to handle tasks that do not require in-house attention to save some extra money. However, even though full-time employees are a great asset to your business, they are also heavier on the payroll and other additional office expenses.

If you still find yourself in a nook with all the chaos of hiring and managing the finances, you can take help from a small business consultant. They can give you great advice on budget, strategy, problem-solving, and other aspects that will accelerate business growth while allowing you to build your dream team.

Utilize Your Network

use your business network

You have grown in the business world as a solopreneur and created your brand's awareness, which means that you would also have made connections in the industry.

You can spread the word in your network about the potential candidates you are looking for and the specific job positions. It can enable you to find the right fit because the people in your network can link you with potential candidates. The best part is because you get the referrals from people you know, it would be easier to trust them with your business.

For instance, if your fellow business partner is downsizing and have a hard time letting their hardworking and trustworthy employees go, they can send them to you if you are open to the relevant positions for hire.

Take As Much Time As You Want

Hiring employees and building a strong team is not an overnight process. You need to take a thorough, long-drawn approach to create a state-of-the-art team that will not fail you.

Do not rush into making your decisions. Take time to evaluate each candidate and see if they are the right fit for specific positions. You need a team that will grow into a company with over a decade. Therefore, you would want to avoid bad hires, and you will need to let go of your team earlier than expected.

Manage Your Team Effectively

Manage Your Team Effectively

If you think your work ends once you build a good team, you could not be more wrong. Now that you have a team to work with, you need to upkeep and enhance their performance from time to time to ensure an efficient workflow.

Here are a few ways that can help you run your team smoothly:

Upkeep their morale and confidence

The key to business success is happy customers - and the key to keeping your customers happy is to keep your employees happy because they are the ones handling them.

Entice your team members with rewards like bonuses or promotions, keep a check on them, do not overburden or underpay them, acknowledge their achievements, and let them have a say throughout the sales cycle.

Timely booster doses to upkeep the employees' morale and make them feel valued can bring in more business and cash flow a win-win for both.

Navigate transparency and effective communication

Moreover, it would help if you created effective communication with your employees. Respect their honesty and opinions. Because, as a solopreneur, the only feedback you got was from your clients. But, now that you have a team, the feedback and suggestions will come from within.

As soon as you build your team, set clear guidelines that navigate transparency and effective communication for problems. And assure the employees that their problems will be heard and solved accordingly.

Balance individual performance and teamwork

You need to appreciate and trust them as a team and as individuals. Your team is doing great; cheers to you, but it is crucial to acknowledge the individual performance and qualities. Not all fingers are the same; not all employees have the same hard work and dedication.

However, do not ever discriminate or state preferences; it will be the deal-breaker and create conflicts in your team, leading to failure. Therefore, create a balance in how you acknowledge teamwork and individual performance.

small business consultant helping people

Ready To Lead a Team?

You have effectively led and made your business a huge success as a solopreneur, so why can you not do the same with your team?

All you need to do is transition into an avid team leader from a solopreneur - while you have mastered the independent streak, it is time to polish your skills as a delegator. We've hope you enjoyed this insightful article about how can a solopreneur build a team.

Cash flow Vs Revenue

Accounting can isn't the most exciting aspect of owning a small business (sorry accountant small business owners) Why? Because all of these terms and numbers can be difficult. But (yes there is a BUT), these numbers and terms will help you be a better, more insightful business owner! How can you grow your business if you don't understand cash flow vs revenue?

It might be difficult, my friend.

Not to worry, even if you figure this out. You should consider chatting with a seasoned cashflow-revenue-bean-counter, such as a small business consultant.

What Is Cash Flow?

The cash equivalents and net cash that come in or go out of a company are known as cash flow. Inflows are represented by cash, whereas outflows are represented by money spent. The ability of an organization to produce optimized free cash flow or positive cash flow reflects its credibility to develop stakeholder value.

Free cash flow (FCF) is the cash generated through normal business activities by a firm also known as the cash left after spending on capital expenditures

Recognizing Cash Flow

Positive cash flows imply that a company's cash reserves are growing, allowing it to reinvest in its business strategy, pay debts, refund the money to shareholders, provide a cushion against future financial difficulties, and cover business expenses.

The difference between cash flow and revenue is that cash flow is not accrued. Cash flow measures the real cash on hand as well as the cash that comes in and out of the organization. Cash flow is important to a company's capacity to stay operational. Companies must have enough cash on hand to fulfill their short-term financial commitments at all periods.

Statement of Cash Flows

The cash flow statement (CFS) is a financial statement that illustrates the sources of funds and how they are spent. The cash flow statement's top line starts with the period's net profit or income, taken from the income statement.

Revenue is at the top of the income statement; after all costs and expenses have been deducted, net income is the outcome, which is at the bottom. Because of the locations, revenue is generally referred to as the top line, while net profit or income is referred to as the bottom line.

statement of cashflow vs revenue

Operating Cash Flow (Cash Flow from Operations)

Cash flow from operations includes changes in cash from current liabilities and current assets, including short-term items. In this part, accounts receivables, or amounts owed by customers that are collected, are reported as cash. When financial obligations or accounts payables owed to suppliers are paid, they are documented as operating activities.

Investing Activities Cash Flow

The investing activities section records any funds paid or generated from long-term assets. For example, purchases of property, plant, and equipment, such as a new production plant, are noted here.

These activities also include purchasing automobiles, office furnishings, and land. The sale of assets, such as a building or a section of the company, frequently results in credits to investing activities. In a nutshell, any long-term investment buys or sells that has a financial consequence is classified as an investment activity.

Financing Activities Cash Flow

Equity or debt financing are the two most common methods for companies to fund their operations. Cash obtained via the sale of shares, the issuance of a bond, or the borrowing of funds from a bank is accounted for as financing activities' cash flow. Repurchasing stock, Paying dividends, and paying down a loan or bond are all examples of cash outflows in this section.

Cash flow vs revenue is starting to make sense now, isn't it?

Revenue is also a one-way stream of money into a business, whereas cash flow is the sum of cash inflow and cash outflow. As a result, unlike revenue, cash flow has the potential to be negative.

What Is Revenue?

The money generated from normal business operations or core business operations is known as revenue, which is computed as the average selling price multiplied by the number of units sold. It is the top line statistic from which net income is calculated by subtracting costs. On the income statement, revenue is also known as sales.

difference between revenue and cashflow

Recognizing Revenue

The total amount of cash generated through the sale of services or goods connected to the company's principal business is referred to as revenue. Because it appears at the top of the income statement, revenue is commonly referred to as the top line.

The total income produced by a corporation before expenses are removed is referred to as revenue. Understanding the difference of cash flow vs revenue is crucial for small business success.

Although the phrases revenue and cost of sales are sometimes used interchangeably, they are not synonymous.

Revenue is a broad term encompassing various sorts of revenue, such as money gained through bank investments or interest earned from bonds. In contrast, proceeds from sales refer solely to the amount of money made from the sale of a product or service.

Do you think companies would get creative displaying their revenues differently?

On the other hand, companies can present their revenue in various ways, based on the accounting method utilized and the industry. Retailers, for example, announce net sales rather than revenue since net sales indicate sales revenue after goods returns.

Depending on the source of revenue, it can be divided down and listed as various items listed on a company's income statement.

Many businesses, for example, report operating income independently, which is money earned from the company's primary operations. Non-operating revenue, on the other hand, is money collected from other sources, such as profits from the sale of an asset or investment income.

Accrued Revenue

Accrued revenue is income collected by a business owner for products or services delivered but not yet paid for by the consumer.

Revenue is reported when a sales transaction occurs in accrual accounting, and it may or may not symbolize cash in hand. Revenue has a long-term impact on cash flow metrics, although it does not always do so immediately.

accrued revenue for a small business

Unearned Revenue

Unearned revenue is the polar opposite of accrued revenue in that it accounts for money paid in advance by a client for services or goods that have yet to be provided.

If a corporation receives prepayment for its goods, the revenue is recognized as unearned. Still, the revenue is not recognized on the income statement till the period in which the products and services were delivered.

Revenue Sources

Other than the traditional selling of a good or service, some organizations can generate revenue from various sources. The forms of revenue and the sources of revenue vary depending on the firm or organization.

Rental income may be a source of income for real estate investors. Tax collections from income tax expenses or property would most likely be the source of revenue for the local and federal governments. Governments may also profit from the sale of an asset or the interest earned on a bond.

Donations and grants are the most common funding sources for charities and non-profit organizations. As a result, universities could profit not only from tuition fees but also from investment gains on their funds.

How Does Cash Flow Compare To Revenue?

A small business's revenue and cash flow are two financial measures that assess the operation's financial condition. The key difference between the two is that revenue evaluates the efficiency of a company's sales and marketing efforts. In contrast, cash flow is an indicator of the company's liquidity or money flow in and out.

is cash flow or revenue more important

Statement of Financial Health

The financial statement on which cash flow and revenue are presented differs from the two approaches. The top line of the income statement is reported as revenue. As it quantifies items sold during the accounting period, it is reduced to reach the company's net income, which is the income statement's bottom line.

The cash created by the company's operating, financing, and investing activities is referred to as cash flow.

The pleasant and unpleasant changes in the current liability and current asset accounts produce operating cash flow. Modifications in the firm's investment account create investing cash flow. Finally, the long-term obligation and equity accounts create financing cash flow.

Is Cash Flow More Important Then Revenue?

difference between revenue and small business cash flow

It is dependent on the business and the conditions to determine which is more significant.

For example, a company may profit every month, but its funds are locked up in accounts receivable or hard assets, leaving no cash available to clear staff payments.

When a debt is paid off, or the company receives a boost in revenue, positive cash flow returns. Cash flow is more crucial since it allows the business to continue operating while making a profit. Alternatively, a company's income and cash flow may improve, but the company's debt level remains high, resulting in a loss.

But WHY the loss?

The lack of profit margin ultimately has a negative cash flow. Profit is more essential in this case. Another thing to keep in mind when deciding whether to prioritize cash flow or revenue is that cash flow may be purchased.

A business owner can invest his or her possessions in the company as capital spending. Alternatively, they can take out a startup loan from a bank to maintain profitability until cash flow improves.

Both cash flow and revenue are critical financial measures that are equally significant for your company.

This is very interesting, but, in a battle, who wins? Cash flow vs revenue?

For income tax purposes and to generate the income statement, you must monitor your sales of products, which convert into dollars of revenue. Therefore, the cash flow statement cannot be prepared without the income statement.

It's also vital to remember that cash flow and revenue do not increase in lockstep. For example, if your company borrows money, it will have a lot of cash flow, but the debt repayment will have very little influence on revenue.

In contrast, if a company has a lot of loans, it will spend a lot of money servicing that long-term liabilities. Its financial position could be precarious.

Small Business Consultant Can Help With Managing Cash Flows

managing cash flows with a small business consultant

There are a lot of idioms in business finance. One of the most commonly heard phrases is "cash is king". The majority of firms fail to owe to cash flow issues. Profit is good, but cash flow is required to keep the business running.

It's common for startup businesses to struggle with generating and retaining capital. This is frequently due to accumulated debt and the cash required for debt payments and fund operations.

How can you gain a better understanding of cashflow?

Owners can gain a better understanding of their debt and cash by knowing free cash flow as well as some ratios. Cash position, cash flow management, and the link between profit and cash are also crucial to comprehend.

The flow of Cash, Operating cash flow, capital expenditures, changes in working capital, and dividends are all factors that affect free cash flow. So it means that free cash is money you have left off that you could spend.

Is there a whole in your cashflow bucket?

Analyze the concept of money's time worth. A dollar now is devalued tomorrow, but it is more valuable if you put it to good use. The goal of the free cash principle is to discover a way to put your new cash to good use.

Free Cash Flow = Operating Cash Flow - Capital Expenditures - Working Capital - Dividends.

Analysis of Ratios


Financial ratio analysis can assist you in figuring out how liquid your company is and how well it will fulfill its short-term debt repayments. The ability of a company to pay its short-term financial obligations is referred to as liquidity.

Analysis of Ratios for cashflow vs revenue

Budgets in Cash

To keep your money records, you might want to create monthly cash budgets. Cash flow statements can be prepared at regular periods to analyze your cash flow. This will assist you in budgeting the amount of money you have available for your business's numerous tasks.

How to Make the Most of Your Cash Flow

Inventory and accounts receivable, two of your current asset categories, can significantly impact cash flow. The things you sell are usually your inventory. The accounts receivable account represents the credit you offer to customers. Cash flow can be improved by selling items and collecting receivables more quickly.

Accounts payable can also be timed as a short-term strategy. Clear your payments on the due date, not ahead of time. This allows you to put your money to good use while still having it.

The Secrets to Effective Cash Management

The key to successful cash management is to be educated by utilizing the resources at your disposal. Develop an awareness of how your business's cash flows, how to gain financial stability, and build a cash budget to keep your cash balance healthy.

You've got this. Sure, this lingo might be terrifying now, however, anything is possible if you continue to work at it! Now you should have a comprehensive understanding of cash flow vs revenue. If you don't, it can't hurt to read this again, my friend.

How A Small Business Consultant Can Help Your Business

Small business entrepreneurs are business professionals who prefer to handle multiple things on their own. They value their autonomy and find it hard to distribute work. They seek to achieve corporate objectives while also acting as business attorneys. Many of these business owners never consider asking themselves how a small business consultant can help your business.

Almost 60% of a study showed that small business owners have not met a consultant or a financial advisory. This is a bit alarming, at the rate the market is changing and growing, no matter what industry your business belongs to. In this era of consulting business, your small business also needs a consultant; for example, a small business tax advisor who can work on a tax code and make the tax purposes obvious for the business.

Most consultants belong to a certain consulting field. If the decision-maker of the business realizes a problem or a shift in the business, it is advisable to hire a professional consultant.

There's a time when the business growth feels stagnant. Either there is no growth in cash flow, or the business goals are not being achieved on time. What step should the business owner take then? It's a sign that your small business needs business consulting services.

Small business consulting services is a team of outside experts or an independent consultant that the business owner would hire to help them with the business strategy. They also become a way to help achieve the business goals efficiently and cost-effectively. In addition, they help with internal problems that might not be obvious to the business team.

A small business consultant helping a business with structure

Reasons to Hire Business Consultants

A business consultant discusses how a business owner can improve his sales

Why Is It Important to Hire a Business Consultant?

Business consultants are usually a team of consultants specializing in different areas, like; an accounting consultant, a marketing consultant, etc. They can also be an independent consultant.

Business consultants are important for a small size business as it helps improve the business and save from business failure. They are also known as a business mentor as they guide and make strategies that range from capital investment to marketing plans for the business.

They provide the advanced experience required to overcome any or all the hurdles being faced by the business. In addition, they help the business transition and grow over time by providing long-term solutions and a game plan.

They can give financial advice to improve business performance and opt for possible changes to achieve business success. They can be a source of knowing an affordable option or a substitute for something a business needs, such as production.

business consultant helps a female business owner with her finances

What Skills Do Consultants Have?

Small business consulting services are now common and easy to find. However, depending on the type of business, the skill may vary. Commonly, a consultant should have a diverse skill set to help the business acknowledge the problem and then overcome it.

The consultant business doesn't need to have a team of consultants, and there may only be one independent consultant. So, the consultant needs to have certain skills.

office meeting with two business consultants

Types of Business Consultants

Considering there are numerous types of businesses out there, there is a need for different types of consultants. Due to Covid-19, most businesses have made a virtual presence to exist and survive through the pandemic. To meet the customers, suppliers, or even employees in real-time, it is important to have a proper plan and a schedule.

Each type of consultant serves a niche in the business model and management. A few types of consultants are listed below:

It is financially and mentally exhausting to employ a consultant separately for each department. Hence, we advise you to hire a consultant business with a team on board or an independent consultant with diverse skill-sets.

Why Do Businesses Need Consultant Services?

A good consultant brings specialized knowledge skills to the business. They put in efforts to improve the clients' business conditions.

While hiring a consultant, it is important to decide and communicate who the primary person will be. This will clarify who is responsible for what, streamline the decision-making process, and save valuable time.

The main objective for hiring a business consultant is to make the business transition smoothly from one phase to another or to easily adapt to a new product line or a production strategy. For example, the business might want to become a google partner, so to do this, they will have to come up with a set of objectives and a plan to get there.

The consultant gives 40%-60% of the attention and importance to discovering the underlying issue during the consulting period. Next, 10%-30% of attention is given to researching or learning from experience about dealing with the issue. Then 15%-25% of the importance is on the result or findings and implementing the possible solutions.

Finding a Consultant and Hiring the Correct Consultant

Nowadays, finding a consultant is easy. You can look online and search for the /type of consultant you want. The actual problem is, is that consultant the right consultant for you?

For choosing the right consultant, you will have to talk to the consultant on a one-on-one basis. This will give both of you an idea about what the other party desires and about their capabilities.

The consultant has the experience and knows what they can handle and if they can benefit your business or not. So, it will be easy for both the parties to decide if they should work together.

It will be based on a mutual agreement after both ends have been contacted. If both parties agree upon working together, that is when a consulting agreement is drafted.

small business consultant pointing to a bit of paper

Consulting Agreement

This part involves administrative tasks. These are usually a 6-month contract but can also be longer, like a 12-month agreement.

This agreement states the purpose for hiring a consultant and whether the payment will be every month or installments, etc., it will also state who will be the final decision maker and other aspects. Like any other contract, this agreement will bind the parties to abide by the rules that have been mutually agreed upon.

It is not easy to know if the chosen consultant has proven to be beneficial for your business or not. For this reason, we advise you to make a consulting agreement in phases. This way, if the consultant is not benefiting your business or you are not sure about the consultant, you can part ways with them without any legal complication.

a small business owner being instructed on operations by a small business consultant

How Much to Pay a Consultant?

The payment of a consultant is based on a few things. First, it is a service being used, so the payment needs to be determined. Like everything, the price is determined by the value being added.

The payment can be given per hour, or the projects can also determine it. The usual rate is $200-$12,000 per hour for per hour pay. If it is project-based, it depends on the project's complexity, and it can range anywhere between $10,000-$30,000.

Though it can be expensive to hire a consultant, you need to determine its worth considering a few things.

Is It Worth Hiring a Consultant?

It is an expensive investment, especially for a small business owner. So how can you determine if it is worth investing such a big amount or not?

You can determine by looking at the percentage; for example, if you earn $20,000 per month, it is not wise to give $10,000 per month to a consultant. You will have to assume the financial product that will result from this investment.

You can also discuss this with your consultant.

Another way is to determine the worth is by the phases. If the project is complex, break it down into phases and then assume the success rate of this phase. This will also help you decide if you want to take up the project or not. For example, if you are introducing a whole new product line with various products, you will have to see how the launch of the first couple of products will do among your client base.

Final Word On Small Business Consultant

I believe in small business consulting services; the chances of betterment and more opportunities increase multiple times. So, yes, a business consultant CAN help a small business.

The type of consultant and the value they will be adding to the small business is what matters the most. This is a crucial decision, and important to have the right people on board. The business owner and their team should do proper research and know what they want to achieve with the help of a consultant.

The business owner must also be sure about how much time they are willing to wait to see the results. If they want long-term results, it will take time. So, hire a business consultant that is the most suited for your business and the objective you have.