“Sleeves off a vest” – advice for small businesses
Every small business needs help. The owners know it, the employees know it, and business consultants know it. The challenge for these all-knowing, all needing small businesses is how to pay for this expertise.
While there are many well intentioned and talented volunteer organizations with much needed expertise in addition to talented, fee based consultants, there are two cold hard facts which have to be addressed. The first is that at the end of the day, these talented volunteer individuals and groups are going to sleep well whether or not their advice works for the small business. The financial success of these unpaid advisors is of no consequence for these same advisors. Unfortunately, the very same can be said for the majority of paid consultants. These folks know only too well that, as a group, these small businesses have no money for their services. The angst of a paid consultant, if he or she is lucky enough to land a client, stops once their payment check clears the bank. Compare this with the daily, weekly, and monthly concerns and fears every small business owner and manager deals with on an ongoing basis. Every program they undertake has to work, they cannot absorb (afford) any significant failure. Oftentimes, this means that any great idea, with its associated risk, will in all likelihood be avoided.
There is, however, a proven process that will provide a guaranteed solution for any small business with its inherent lack of funds to address this need to pay for expertise. It boils down to basically asking three questions of any prospective paid consultant.
The first question is based on the small business clearly understanding its most pressing need. It could be in sales and marketing, it could be production, it could be human resource issues, whatever—it must be clearly understood by the business principle(s). Following this internal analysis, the first question becomes, “Is (whatever the discerned weakness is) a specialty of yours?” If the answer is no, the business conversation is over. If it is “Yes,” then the next request is a list of folks you can contact who can verify this implied expertise. The final question is based on an assumptive statement that goes something like this, “As we are both assuming that your advice and recommendations will improve my bottom line, are you willing to base your compensation on this improvement?” If the answer is “No,” again the conversation is over. If “Yes,” the following is how you might structure the payment plan.
First, always, always, always, check out the reference customers with a detailed list of pertinent questions. Any less than a glowing recommendation is another show stopper. But assuming that everything checks out, you simply offer to pay the consultant a rich percentage of the gain to your bottom line. This rich percentage is certainly at the owner’s negotiating discretion, but I suggest that the richer the offer, the better the chance of securing the help. The key is you have to trust the consultant enough to share your confidential financials with the consultant and the consultant has to trust you enough to believe that you are being honest with him or her.
The benefits to both parties are quite obvious. From the consultant perspective, this approach might well be the only way the small business can afford the consultant’s services. From the small business’s perspective, the consultant’s fees are all paid from the very real financial improvement and the consultant has a vested interest in staying involved with the business. Some folks like to refer to this as paying with “sleeves off a vest.” In either case, it works for both parties.
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One of Granby’s newest businesswomen may still be in high school, but she has leased a space, spruced it up and will be managing the store this summer.