Before we proceed to the benefits of external consulting services for a business, let’s briefly see who consultants are and what they do.
A consultant diagnoses problems, offers practical solutions based on his expertise and experience, or provides critical analysis for business development.
There are two types of consultants, internal consultants, and external consultants. Internal consultants are employed by the business. However, external consulting professionals are independent and are hired on a need-based.
Therefore, whenever a firm or company is suffering from a problem and can’t handle it, they hire independent external consultants for practical solutions.
Some business owners follow Lance Lindon‘s theory that consultants would borrow our watch to tell us what time it is, but I have a different opinion. Among the top reasons for which so many businesses fail, #1 is lack of knowledge, and consultants have knowledge advantage that doesn’t businesses get down.
I believe that there are huge benefits of employing internal consultants, but there are some extra advantages of using external consultants that we have discussed below.
All these extra benefits will definitely make you realize the importance of external consultants.
Additional Benefits Of External Consultants
Here are the top 7 obvious benefits of hiring independent external consultants.
The top reason for which one should hire external consultants is expertise and great experience. Actually, external consultants are the ones who work with different organizations at a time or parallel to time, and it enhances their creativity to solve the problems quite easily. Moreover, they have met many problems in their careers and have already solved them, and it has a great chance that they have already worked on your issue somewhere else.
Basically, when the market trends change, most companies face the same problems. Of course, the path could be different for each business, depending on business plans, financing problems, and labor, but the solutions are always the same.
For instance, due to COVID-19, every physical business was disturbed, and they reacted differently, but later on, all realized that people could work remotely and follow companies’ SOPs.
Most of the time, organizations’ problems require an objective approach. You might already have an internal consultant, or if things aren’t going great, that means the consultant isn’t objective.
For example, if a company suffered financial issues, and downsizing is essential, the internal consultant might get influenced by politics, but an external consultant can get you out of this crisis with an objective approach and fresh eyes.
#3 Fresh eyes
“My greatest strength as a consultant is to be ignorant and ask a few questions.” – Peter Drucker
As a human is an emotional animal, a business owner can never be emotionally detached or objective. Emotional attachment can blur the crystal clear solutions to problems. As a result, business owners might not see the solution on the table or not be ready to accept it.
In all such situations, an external consultant, who has no emotional attachment to the business, but with business growth, will not only diagnoses the problem to solve it but also convinces owners to implement them for business success.
For example, it’s human nature that we see our problems microscopically and don’t see the bigger picture for which we started. So consultants hold our hands, remind us of the bigger goals for which we started, and turn our eyes out of the specimen slide.
This might not be the problem of startups because they don’t have long sheets to read or complex problems to solve. Otherwise, a business owner looking at all the business departments might require 50 hours a day to keep an eye on all the departments, or otherwise, they might not work correctly.
For instance, you are running a laundromat business or the car dealership business. There are too many things that you can’t improve without appropriate guidance. Secondly, it isn’t good to hire an internal consultant for such businesses. So hiring an external consultant could be an excellent choice for all such businesses.
An external consultant, let’s say a business analyst can assist the business owner in checking out if things are working fine, and the company demands improvements for internal productivity or competition with the market.
It’s assumed that external consultants could be expensive because of their high fees, but that’s not true every time. Some consultancy firms may charge a lot, but you might not necessarily need them. Any independent consultant who has worked with different companies and has a good profile can be a good fit for you.
An independent external consultant can solve your problem and leave.
It’s cost-effective in many terms. Such consultants aren’t sticking to your company and charge you every month, and they can even get you some huge benefits from the market because of their market research.
Let’s take an example of a technology consultant. Suppose your business wants to adopt advanced technology. In that case, you can either train someone to learn the advancement and implement it in your business or hire an external technology consultant to get your business the advanced technology, implement it, and go away!
48% of UK executives who used independent consultants said that flexibility was the most significant selling point. Flexibility gives freedom, peace of mind and lowers stress.
So hiring an independent external consultant can bring magical business results because of the consultant’s energetic mind that no one can get from the stressful political environment of an organization.
#7 Keep the organization running
Some companies often don’t tend to hire external consultants and want their employees to meet the situation. However, this is not a great idea for SMBs.
No doubt, anyone could be a consultant because there is no specialization required to secure the title. Still, if a business starts investing in employees to become consultants, there are three disadvantages a company can suffer.
- It will disturb the running business. It will daily disturb routine work.
- It will cost a lot of money to train them.
- There are still chances that they won’t become much creative to meet the challenging situations.
It’s clear that from where you take your employees, either you find alternatives to do their jobs or hire new employees to replace them, or you might overburden the other colleagues. All these situations will surely disturb the organization, and the slightest disturbance will displeasure a guy you overburdened.
So if you don’t want to disturb a running business, it’s far better to hire experienced external consultants.
There are huge benefits of hiring a consultant in the business. The reason is that consultants are the experts of their fields; they have invested much time and spent their lives alleviating the problems before harming business. There are different types of consultants: strategy consultant, management consultant, operations consultant, financial advisory consultant, HR (human resource) consultant, IT consultant, tax consultants, and OD consultants. They all work in their fields to keep their eyes on the market – even on the future.
The biggest benefit of hiring consultants, internal or external, is knowledge advantage. But not every business or not every time a business needs an internal consultant.
Here comes the importance of external consultants that we have briefly discussed above.
While talking about the importance of external consultants, we have discussed all the benefits of external consultants. But if I have to emphasize the importance of external consultants in a single word, then it’s their fresh eyes.
It’s a fact that when we are in trouble, we can’t figure out the problem ourselves, so the external consultants do. That’s enough to realize the importance of external business consultants.
However, all other benefits we discussed above have their importance in business.
Frequently Asked Questions (FAQs)
What is the difference between internal and external consultants?
The business employs internal consultants; however, external consultants are self-employed independents who work with organizations, businesses, and business owners and provide them their professional critical opinions covering business growth.
What does an external consultant do?
An external consultant is an independent advisor who analyses the business with objective and fresh eyes to find the problems affecting business growth and provide solutions.
Keep in mind that internal consultants also have the same duties, but there are some extra external consultants advantages we discussed above.
What is the role of an external consultant?
The role of an external consultant in the organization is the same as an internal consultant. Both provide professional coaching to keep the growth of a business sustainable and get it to the next level. However, external consultants are not members of the client organization.
What is an external advisor?
There is no difference between a coach, consultant, or advisor. We can say that an external advisor is an independent professional who provides experts opinions on a matter.
Why do companies hire outside consultants?
The top reason for which companies hire outside consultants is their specialization in the field. An outside consultant who has worked with many companies has met hundreds of situations and has excellent exposure to getting results can be eye-catching for companies to bring them to the next level.