When It's Time To Hire A Consultant

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QUESTION From: Lincoln in NJ

“Consulting.....When should you bring someone in? What to look for? What to expect? I'm often worried about initial investment and not getting results (it's usually pricey), how to make sure you don't get hosed? What’s a fair rate? Can you send me a sample contract? We've got a pretty good/successful restaurant company going here (6 different concepts and 8 locations), how do I make sure they are qualified to teach us something? etc. etc.”


HH ANSWER

Every contract, while containing common elements and terms that are non-negotiable, is unique to the specific scope of work and individual interests of the client(s).

As far as a “fair rate” goes: I take a lot of time and effort to structure creative blended fees (the bulk of which is either hourly or fixed-fee) that are in line with the Client’s budget, contain provisions to ensure adequate compensation for scope creep and offer recourse for the Client in the event their expectations are not met.

I structure anything expected to last 30days or longer (including ground-up development) as a fixed fee base with a non-refundable retainer.

What’s equally if not more important than the rate structure is how the scope of work and approval processes / benchmarks are defined. Not trying to be purposefully vague but structuring and negotiating contracts (for me) is as much a part of my consulting work as developing and implementing operational and administrative systems...and as such, require some degree of customization. In my experience, inflexibility with boilerplate agreements only seems to result in losing out on too many opportunities or starting projects with some degree of unnecessary friction.

As far as when it’s good time to bring in outside help, I’d say that whenever you want to: revamp a revenue center, hire staff, reprogram/train staff, update collateral, evaluate & improve efficiency, implement new cost controls or evaluate the root causes of declining morale but simply don’t have enough time or staff to do it yourself…then it’s a good time.

If you’re looking for someone to help you open a restaurant because you lack the experience to do it yourself, a consultant isn’t your answer. No matter how experienced a consultant might be - they are never a substitute for experience. A partner is the only solution / substitute for experience…so unless your consultant is willing to stay on as a partner - I’d look to a consultant to do all of your hiring or to arrange a partnership between you and another party who can help you execute your vision.

When I’m approached by individuals or groups who are looking for me to “teach them the business”, I don’t usually take the job.

I can’t speak for all consultants but I tell every one of my potential Clients that I’m nothing more than an extra set of experienced hands & experienced eyes. Most of the people I work for don’t want people to even know they’re hiring an advisor / consultant or even considering it… so unless I’m partnering with an owner; they just tell staff I’m a friend who’s “here to help them out with xyz” or to pick up some slack with X...while they’re busy with Y…”

I like working for people who have similar backgrounds and realize they just need help until they’re more properly staffed or finished with a project that is occupying a majority of their time and attention.

Unless I’m engaged to provide a business plan and/or road map for a new venture or reposition of an existing asset, I typically find that inexperienced Clients don’t want to bring on another partner and then either want me to stay longer than I can - or they don’t and then they fail to follow-up with the basics we’ve outlined together once I’m gone…and honestly, who wants to be known as the consultant to a failed project when so much of our work is based on word of mouth referrals?

As far as vetting a consultant goes: Talk to them about their philosophy. Ask to see any articles or guides they’ve written or been featured in. Look at their CV. You don’t want theory - you want someone who has learned on someone else’s clock and dime - preferably with some independent AND corporate experience. That’s where you’re most likely to find someone who’s not only knowledgable when it comes to policies, procedures and systems to maximize efficiency...but will also understand that while standard procedures and systems keep larger / multi-unit organizations running smoothly; integrating them into smaller independent restaurants almost always requires a certain degree of adjustment and finesse.

It probably goes without saying...but because of some of the things I’ve seen, I’ll say it anyway - just in case: If an “expert”, consultant or advisor has never actually ran a restaurant before, I wouldn’t want their help or their advice.

Hope my perspective is helpful,

Josh