I Hate 'Consultants' — Part 2

In the previous post, I was talking about the difference between a ‘coach’ and a ‘consultant’.

I mentioned that I really dislike the word ‘consultant’ since it now so overdone and everyone calls himself one, so the word is almost meaningless.  It's like telling someone to "…have a nice day…" Meaningless.

Now, let’s move on to how to pay them…

One thing I do agree with is how you pay them; and that is never by the hour. Personally, I have never earned revenue by the hour: that’s for accountants, lawyers and taxis.  They drop the flag and start charging regardless…in tenths of a mile, or tenths of an hour, your pick.

I was taught to charge by the flat fee for the assignment. (I always added a slippage figure of plus or minus 5%; and usually came in at no more than 98% of my original quote). How I worked out what that flat fee was is my secret; but I can tell you this: it related immensely to the VALUE of the solution to the client’s problem – and a few other pertinent factors.

I would never hire someone by the hour; or someone I thought was going to charge me to learn my business. Hence I would look for advisers (there, isn’t that a much better word?) that have relevant education, a demonstrated track record of achievement in this restaurant field; and with whom I know I can work well.

Recently I read one ex-restaurateur who had written a book slam ‘consultants’ while suggesting that if the consultant was not prepared to take part of his/her compensation in a commission or slice of the improved profits…he was probably not worth having on your business.

Bulldust!

I was taught by one of the best that this NEVER is a good idea.

Here’s why: there are far too many ‘variables’ out there that no consultant will ever have ‘effective control’ over. These variables include:  the client; the restaurateur, his wife-family, his employees, the weather and road construction/detours, to name just a few.

Each of these non-controllable factors can have a bearing, often negative, on the outcome of the adviser’s suggested moves for the client.

If it does not turn out the way he hoped, it is not necessarily his fault. So why should he lose money because of the actions of the client or other factors over whom he has absolutely no control? He is not a shareholder.  Unless you want to convert your expertise and experience in this venture into “equity” in the firm – and not minority equity either – why should you be treated as an owner?

Moreover, if they are wildly successful, most clients deeply resent the amount of money they will have to pay out…after the fact.  It’s just human nature. Remember all those stories about the crackerjack sales person who started making more money in commissions than his boss, the sales manager? You know how that one turned out.

‘Better to just offer your services, quote a fixed flat fee for them; come in under budget, do a great job, under-promise and over-deliver; then hope for the best; and a glowing testimonial from the client.

Using an adviser is not easy. You should understand that you are essentially buying another set of eyes that are not motivated the same as you; they do not own equity or interest in your operation. They are objective in that regard. This is a good thing, since they can bring a fresh new way or approach to your business.

A truly great adviser will never kiss your butt, just to keep you happy. His or her job is to tell you what you need to know, not what he thinks you want to hear.

Finally, realize that even though you think you have it down pat…you may not be asking the right questions. Additionally, you may think you have most of the answers; but they may be answers to the wrong or irrelevant questions. Knowing the difference is key.

Always consider: objectivity, transparency and honesty and you won’t go wrong.

What do you think?  I’d love to hear your two cents’ worth. Give me your comments below…