Achieving business growth is quite a challenging task in today’s highly competitive market. Many businesses fail to achieve the desired outcome due to their refusal to hire external consultants and expect internal employees to handle the role of consultants.
Based on the clients’ survey, Management Consulting firms significantly contributed to the ROI generated by the businesses after taking consulting services; some clients even reported an 8 times ROI increase.
Before we get into the benefits of hiring external consultants, let’s first understand what consultants do and how they can help your business grow.
Let’s start by identifying the business consultants.
A consultant is a professional with specialized knowledge in a specific industry. They work closely with businesses to identify challenges, recommend solutions, and provide strategic guidance to support growth and continuous improvement.
Along with their expertise, consultants bring a fresh perspective to areas like operations, marketing, financial management, or strategy.
Whether you’re a small business, a growing startup, or a large corporation, consultants offer expertise to help you tackle specific challenges and improve performance.
There are two main types of consultants: internal consultants, who work for the organization itself, and external consultants, who are independent and hired for specific projects or needs.
When a company faces a challenge that can’t be resolved internally due to a lack of expertise, resources, or time. In such cases, hiring a consultant is often the best way to find practical solutions for your needs.
Large corporations regularly bring in external consultants to optimize workflows and streamline business processes. However, small businesses often hire consultants on a short-term basis to address specific needs.
Now, the real question is: if you’re facing challenges in your business growth, should you hire an external consultant to help improve operations?
For example, if your sales are stagnating and you’re not sure why, could an industry expert provide the insights needed to turn things around?
Business owners tend to have different views on this. Some believe in Lance Lindon’s theory that consultants merely “borrow your watch to tell you the time,” offering nothing more than basic advice.
However, I take a different stance on this.
Among the top reasons 45% of new businesses fail, #1 is lack of knowledge, and consultants definitely have a knowledge advantage in the market that helps businesses target the right kind of customers and experience significant growth.
Experts and consultants are key players in driving business growth and success, among many other factors.
While internal consultants bring significant value by providing constant oversight and being deeply embedded in your business, external consultants offer unique advantages that can complement and enhance your internal team.
Even if you already have internal consultants, still, bringing in external expertise can provide a fresh perspective and valuable insights.
Below, we’ll explore the key benefits of hiring external consultants and why they are an important asset to any business.
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Hiring external consultants is cost-effective:
Many business owners believe external consultants could be expensive because of their high fees, but that’s not always true.
Some consultancy firms may charge a lot, but you might not necessarily need them.
Any independent consultant with a sound background and profile can be a good fit for you. Independent consultants often charge much less than agencies.
Moreover, there is a huge demand for On-Demand external consultants in the market nowadays. A study by Business Talent Group found that on-demand consultants can cut consulting costs by around 48–63% as compared to traditional firms.
For example, a growth-strategy project can cost $75,000 with an independent external consultant versus $272,000 with a traditional firm, yielding around 72% savings while maintaining or improving quality.
This also removes you from the obligation of hiring a full-time consultant at your firm and continuing to pay them, decreasing operational costs.
Consultants are industry experts:
The top reason to hire external consultants is their expertise and extensive experience.
External consultants work with multiple clients and projects before yours, offering hands-on experience and a honed skill set.
They bring a wealth of best practices that have been tested and refined in real-world scenarios.
Many large enterprises and government organizations have put their faith in consultancy firms to achieve
their organizational goals. For example, the United States Postal Service, which is a government organization and employs more than 600,000 people, trusted McKinsey to optimize its delivery network and implement automated sorting systems.
This experience means there’s a good chance they’ve solved a problem similar to yours before.
While every business has unique dynamics, whether it’s related to financing, workforce, or business strategy, the core solutions to many challenges remain the same. Thus, they can provide you with practical solutions and proven strategies.
Their fresh perspective and experience can lead to lasting improvements, no matter how complex the issue may be.
External consultants have an objective approach:
When businesses face complex challenges, objectivity becomes essential for effective decision-making and sustainable solutions.
Even internal consultants, though valuable, can struggle to remain impartial due to existing ties within the company. External consultants, in contrast, stay untethered to internal politics or personal relationships, allowing them to provide unbiased, clear-sighted guidance.
External consulting provides objective insight and innovative solutions to complex problems.
For example, if a company is facing financial difficulties and downsizing is necessary, an internal consultant may be swayed by company politics or relationships.
On the other hand, external consultants look at things objectively. They focus on your business goals without getting involved in internal politics, personal interests, or relationship building.
They use fresh eyes:
“My greatest strength as a consultant is to be ignorant and ask a few questions.” – Peter Drucker
As humans, we are naturally emotional creatures, and business owners can’t be completely emotionally detached from their companies. This emotional attachment can cloud their judgment and prevent them from seeing clear solutions to problems.
As a result, they might overlook the solution or hesitate to implement necessary changes.
An external consultant, on the other hand, is not emotionally tied to the business. Their focus is solely on business growth.
They don’t just identify the problem—they also guide business owners through the process of implementing solutions, even if those solutions involve significant change.
For example, it’s common for business owners to focus on the immediate issues and miss the bigger picture.
Industry commentary emphasizes how leaders often get trapped in reactive “firefighting,” addressing short-term disruptions while sidelining long-term strategic objectives.
Take the case of a retail business owner struggling with declining sales. They may be overly focused on cutting costs in the short term, such as reducing staff or limiting inventory, without considering long-term strategies like improving customer experience or investing in digital marketing.
An external consultant can help refocus their vision by reminding them of the broader objectives—like customer loyalty and brand growth—and guide them toward solutions that address both immediate concerns and future success.
According to McKinsey research, businesses that outperformed their peers in terms of growth generated 30% higher total shareholder returns, which is indicative of striking a balance between immediate fixes and long-term change.
An external consultant Uses Agile Methodologies:
Agile methodologies employed by consultants have been reported to drive productivity during project management and save a considerable amount of time.
In the USA, 71% of companies today use agile methodologies, and 98% say it has significantly improved performance and project success rate.
Let’s say you’re running a small retail store or a service-based business like a consulting firm. There are many areas where you might need expert guidance to improve efficiency.
From managing bookkeeping, implementing digital marketing strategies, attracting new customers, to overseeing inventory management, these tasks can quickly become overwhelming.
Trying to handle everything on your own can stretch your resources thin. This is where an external consultant can step in, saving you time and allowing you to focus on more productive aspects of your business.
They get an edge of flexibility:
48% of UK executives who used independent consultants said flexibility was the most significant selling point. Flexibility gives freedom and peace of mind and lowers stress.
So hiring an independent external consultant can bring magical business results because of the consultant’s energetic mind, which no one can get from the stressful political environment of an organization.
External consultants already have the expensive equipment you need:
Many business tasks require specialized and costly equipment, which can be a significant barrier for small businesses looking to compete with larger corporations.
Large organizations use these advanced tools to maintain a competitive edge in the market. However, for smaller businesses, the upfront cost and maintenance of such equipment can be a major challenge.
This is where hiring an external consultant can be a game-changer. Independent industry experts often already have access to these high-end tools, which means your business can leverage the latest technologies without the hefty investment.
One such overlooked advantage of hiring consultants is that they already come equipped with the necessary tools and technologies that may be needed for deeper insights into the industry.
For example, Salesforce Marketing Cloud and HubSpot Enterprise CRM may cost between $150 to $500+, depending on features and licensing.
Or when you need SEO services to attract inbound leads, they already have access to premium SEO tools like Ahrefs, Google Analytics and Semrush, etc.
This helps you get optimal results without the burden of purchasing and maintaining expensive equipment yourself.
They will help you keep the organization running:
Some companies don’t tend to hire external consultants and want their employees to meet the situation.
70% of the companies reported a measurable growth in revenue within the first 12 months after working with an external consultancy service provider.
However, this is not a great idea for SMBs.
Undoubtedly, anyone could be a consultant because no specialization is 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 routine work and several business operations.
- It will cost a lot of money to train them and provide them with advanced equipment.
- There are still chances that they won’t be creative enough to meet the challenging situations.
So if you don’t want to disturb a running business but need a cost-effective solution to identify and resolve the issues, it’s far better to hire experienced external consultants.
Frequently Asked Questions (FAQs)
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.
Why do companies hire outside consultants?
The top reason why 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 that can be eye-catching for companies to bring them to the next level.