Small Company, Large Lessons
Part 12 of 13 of my series on the profession of management consulting
Every engagement is a challenge and no two clients are the same. However, at least from my experience, I’ve found that there are some commonalities in dealing with smaller companies. Today, I’ll share with you my experience in working for a small company and what obstacles a consultant can expect to face when approaching such a client.
One of my experiences working with a small company
Early in my career, I worked at a very small company of less than fifteen employees – if you included the company dog. The company had its fingers in a few pots, namely: electronics manufacturing, and product design – for which I was the mechanical engineer. Part costs were killing them as many parts were custom-made and the time for delivery for these parts was erratic at best. As a result, it wasn’t uncommon for us to go into firefighting mode trying to fill orders at the last minute, or work late into the night trying to diagnose a technical problem. Furthermore,at no fault of the owner, oftentimes paychecks had to be delayed a day or two because their clients themselves were late on payments. While it was a very exciting time for a young graduate like I was at the time, it was also very stressful. While the company hit a few home-runs with a couple of products, namely the Nova hand-dryers and white-label coffee machines, the company owner felt that it desperately needed to grow.
One day, the owner simply had enough of it and decided to integrate vertically upwards by developing a laser-cutting service to not only produce its own parts but to bring in some extra revenue. If any of you have ever worked in a laser-cutting company you’ll know what an investment they are. Machines that cut up to 3/4″ of steel using a high-powered laser are not cheap and require some specialized skill to operate. The money was secured from the bank and, from what I understood at the time, this was a feat in of itself considering the immense cost of the machine, gas and metal stock. The skill would be developed in-house through training sessions with hired technical consultants.
As you can imagine, taking that next big step, while holding onto older sources of revenue during the transition period was… trying. Tension ran high, business relationships with suppliers were touchy, and staff morale – while supportive, grew tired from covering so many bases and putting out so many fires. Now imagine if you, as an external consultant, had to come in and engage this type of client. I was, in essence, a trusted internal consultant at this company and even I faced giant obstacles on an everyday basis. So believe me when I tell you that you should expect to face a few obstacles before you even came close to preparing your proposal.
Dealing with a small company: a survival guide
- Research your client
I can’t emphasize this enough. Small companies have long memories and heal a lot slower from bad experiences than large companies do. They tend to be wary of consultants and don’t trust people that don’t have a rich background in their industry. So research what you can before the entry phase. Unfortunately, often at times, you can’t find much information. If you are in this situation, fall back to finding a lot about your specific contact (read: use google, linkedin, and pipl). If you can’t speak from knowledge, speak from empathy. Find your contact’s soft spots and find a way to understand their pain and speak to it. - Cut to the chase
Having worked in a variety of different companies of varying sizes, I can say with confidence that big business moves at a snail’s pace as compared to smaller businesses. At small companies, no one has time for a consultant. Yes even if it’s you. So if you are lucky enough to steal some time from your contact, cut to the chase. Front-load your presentations. In all likelihood, your meetings will get cut short more often than not, so get your point across as quickly as possible. Also, remember that your presentations are deliverables that must speak for themselves when ushered you’re out of the room. - More to lose
Above all, you must be sensitive to the fact that small companies have more to lose and are more defensive than larger ones. Your fee will be a larger percentage of a small company’s bottom line than that of a larger company. Also, a smaller company is usually the baby of someone in the building – chances are the CEO or President started it not too long ago. Speak about the company as something precious that has to be defended and nurtured. - Expect payment hiccups and knowledge robbery
Know that many small companies can’t afford you. So expect that while many small companies are willing to hear your initial findings, they may not be interested in hiring you. Often small companies will try to have consultants find the big issues at their company and send the consultant on their way as they use the insights given to them for free. So keep your findings relatively vague until you see some green. Also know that you may have a long-term account receivable with small company clients as they may try to withhold payment for all sorts of odd reasons like their dog ate the cheque or something.
Now, I’m not saying to avoid small companies in anyway. Despite my warnings, they are a great place to learn a lot and gain a ton of experience. You can make a serious impact on small companies and they are very satisfying to help succeed. And hopefully, one day, they’ll re-hire you for another engagement, as a medium-sized company.
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