Startup Consultancy: Brief Guide

90% of startups are doomed to failure. Recent research by the US Bureau of Labor says that 20% of startups fold in their first year, while 33% stall during the second year. 

As for the UK startup market, 20% of newly established companies go bust during the first year, and 60% of others give up the ghost after three years of functioning with variable success. 

Although the figures are scary and indisputable, they are quite avoidable. In this article, we will explain how to avoid or mitigate startup failure. And the solution is startup consulting. 

The goal of a startup consultancy is to make companies productive and profitable through a range of optimizations and new tech trends. As follows, a technical consultant is a so-called “hired gun” for your business. 

Therefore, hiring a startup consulting firm will save you a lot of time and money, but most importantly, it will keep your business from reaching a stalemate. Find in this article what startup consulting is all about, what benefits it provides, and how to define whether your startup needs this thingy thing called a consultancy.

Reasons to Hire a Startup Consulting Company

As a startup founder, you may encounter various challenges that drag you down and your will to continue developing your idea. That is why it’s a wise decision to work with somebody who has already been in your shoes and possesses the knowledge you may use to navigate when you face uncertainty or difficulties. 

If you are unsure whether it’s worth hiring a startup consultancy or wonder whether you still need it, there’re a few reasons: 

1. You cannot keep up with new development trends and emerging technologies. If you try to get into technology and you feel as though you’re in over your head and anxiety eats you from the inside, it’s time to ask for help from someone knowledgeable in this sphere. Right, startup consultancy!

2. You are in need of an impartial opinion. Sometimes, your partner or team cannot agree on some important things. In this case, an outside and impartial view can save you a couple of nerve cells. Startup consultancies add perspectives that your partner or team might have missed and navigate you to develop sensible solutions. 

3. You feel a lack of inspiration. Change management, fresh ideas, and inspiration - it’s all you can get from your startup consultant. Due to the exponential exposure to different cases in your industry, technical consultants can help you substantiate a gut feeling that you’re on the right path and use all the resources to build the best solution. 

4. Your project is time-sensitive. It’s not easy to build a brand-new product or create an out-of-the-box design if you’re unsure where to start. The business start-up consulting buys you much-needed time and makes sure that your first attempt to finish a time-sensitive project is successful. 

5. Your startup isn’t growing, and you have no idea why. Something is pretty wrong is you’re working well, and financial records do not show this. Consultants are experts in finding out why businesses fail or do not work properly. 

6. You suffer from tunnel vision. If you experience tunnel vision from working on an issue for too long, then engaging with a startup consultancy may be transformative for your startup. Getting a fresh set of eyes to solve ongoing and unsolvable problems can be your cure. 

7. You’re getting into an area outside your expertise. Any startup founder has their strengths and weaknesses, and the most productive way for your business is to focus on strengths. At the same time, you let someone else as experienced as a startup strategy consulting professional focus on the weak points and things that lie outside your own area of expertise. 

8. You cannot meet your goals. If your current sales, development, or any other strategy is not paying off, it’s a good idea to rope in an expert who has achieved these goals thousands of times. 

9. Your in-house team is not enough. Hiring a staff augmentation consultancy might be useful if you lack in-house resources. This maneuver will save you both time and effort as staff augmentation consultancies can provide you with the needed staff faster, and everything you do is just wait for the cool CVs to come in.  

10. You’re stalling on the startup idea. Starting a new business or developing a brand new idea requires a lot of time, resources, and expertise you cannot have. As a result, you put off the idea on a shelf for a long time and waste the opportunities. Startup consultancies exist not to let this happen. So, when you feel ready to implement the idea and lack a team, expertise, or just a professional push, turn to tech startup consulting, and they will ease your pain and make your startup road smooth. 

Pros and Cons of Startup Business Consulting Services

Benefits

1. An Outside Point of View and Unbiased Feedback 

Startup technology consultants perceive your company as a part of a larger ecosystem that contains your whole industry, target prospects, and competitors. However, consulting services for startups are not a natural part of this system. Thus, they have an objective outside perspective on your company’s operations and business model. It helps them point out the external and internal threats, issues, and opportunities that startup founders may not even think exist. 

Moreover, due to their external position regarding your market, they can provide honest and unbiased feedback. Their comment on work execution, operations, practices, the organization as a whole, and other important aspects sheds a light beam on the actual state of your startup and points you in the right direction of improvement. Lastly, business and technology consulting can offer you non-standard ways how to overcome unintentional bias throughout your organization. 

2. Access to Precious Resources

Technology consultancies have an exit to a pool of precious resources that may provide your company with the crucial edge it requires at the start of its development. In addition, these resources can be the backup that empowers you to make important decisions. 

The range of these valuable resources includes target audience and expensive competitor analysis suites, detailed white papers and exclusive market surveys, and competencies and benchmarking tools. Besides, technology consultants are most frequently part of Research and Development projects. So, it means that they may have some extensive experience in the use of technologies you can only dream of. 

3. Industry Expertise and Insight from the Specialist

You will not be surprised that many business and technical consultants are investors or serial entrepreneurs with a huge track record in building million-dollar businesses. They are the people that spent their whole careers in specialized roles in world-known companies. 

Therefore, startup consultants are jack-of-all-trades in know-how and have ample knowledge of determining and guiding the business potential in a particular market. The specialized insights gained through failures and success put these experts in a position to give you advice on management, finance, marketing, tech, and other facets of leading a startup. An extra set of experienced eyes has never harmed anybody!

4. Avoiding Costly Mistakes

Every startup founder sleeps and dreams about cutting costs without cutting corners. And this is the thing that a startup consultancy can grant you. 

For instance, you can avoid a costly mistake by not scaling your non-core operations disproportionally with core ones. Besides, startup consulting companies know how to keep your taxes as low as legally possible. They can also advise you on a feasible budget for your next service or product development, or launch. 

Finally, startup consultancies can point to where you can reduce your budget and save money. For example, they easily define ineffective day-to-day work that leads to bigger budget expenditures and deadline issues. They are the people who have been there and seen this. 

5. A Results-Oriented Approach for Achieving Goals

A professional startup consultancy always takes time to get to know your business specifics, challenges, and goals. It is not because they try to play for time. Instead, they opt for the results-oriented approach to boost your startup by setting realistic and feasible objectives and KPIs to measure startup market performance.

A results-oriented approach is not a one-size-fits-all. This approach prospers with a professional who knows how to tailor the business strategy and action plans to the actual goals of every specific client. 

For instance, you want to develop a telemedicine app that helps people with diabetes and their doctors to control their condition. To connect with potential leads, you need to find a way to communicate with hospitals, doctors, and people with diabetes. Moreover, they will need to understand why they should use your app and how exactly they will benefit from it. 

And this is where business startup consulting firms come in hot! They help you to perfect all your angles of strategy, find an entry point to your ideal customers, and develop a cohesive marketing approach and all other promoting materials. 

A consultancy expert is also capable of evaluating your budget and making sure that your money is allocated most effectively to different sectors, judging from the challenges you encounter and the sales strategies of your competitors. 

6. Reducing Time to Get to Market

This benefit is sometimes the most critical for startups and a pushing factor why they decide to start working with a technical consultancy. Startup consultancy is brought in as a game-changer that facilitates and accelerates product design, development, and release. 

Since marketing technology consulting experts have a cross-industry perspective, independence, and wide experience in building and deploying out-of-the-box solutions, they can assist newly established companies in driving change and delivering solutions and services faster. 

Without a doubt, startups come up with great ideas, and they can implement them without a tech startup consultancy. Yet, they often struggle with idea execution, and startup consultancies help to streamline the process and ensure that all investments are effectively coming with the highest ROI. 

Drawbacks

1. Lack of Personal Interest

The objective and outside look at your startup business is what you can enjoy when hiring a startup consultancy. However, there’s another side to this coin - the absence of personal interest or investment. Technology consulting companies don’t put their businesses at stake and don’t have much skin in the game. So, they are not so committed to the success of your startup and can view you just as another client. 

The lack of personal investment can result in less-than-stellar achievements and not-so-fast success. 

2. Risk and No Guarantees

Although business startup consulting may seem good on paper and be proactive in the meetings, it gives you no guarantees that they will fit your startup vision and culture. It is always a risk to bring on a third-party person or company to help your business prosper. Therefore, before deciding to take the plunge, weigh all your options and prepare yourself for no safeguards. 

Types of Consultancy for Startups

You would be surprised by how many niche startup consultancies exist. Let’s review some of the common types of services and roles the technical consultants offer:

Strategy

Strategy consulting for startups works with long-term objectives and strategies for business development. Although many startup founders hesitate to opt for strategy consulting, thinking that it is only applicable to established enterprises, this doesn't seem right. As soon as you come up with an idea for a startup, it would be best if you had a strategy. 

The strategy covers the approach to promoting and deploying the product, and strategy consultants know an easy way to do it. 

To understand the value of strategy consulting, let’s imagine a real-life situation. You have an MVP version of your product, but you struggle to find a way to access the market, partners, investors, and potential clients. At the same time, if you have plans for scaling, a strategy startup consultancy can develop a specific growth strategy for you. 

As follows, strategy consultants envision the startup's future and formulate and convey the company’s values and ideas. 

Marketing, SMM & PR

90% of startups that fail owe it to mismanaging marketing. That is why marketing, social media, and PR experts are crucial. They help promote and sell your solution, create a marketing strategy, engage with customers, and improve the brand’s visibility.

SMM and PR consultants assist in boosting your social media presence and bringing more traffic to your website by optimizing it with SEO and the right keywords. Moreover, such startup marketing consulting experts support you in setting the right tone of voice, making photoshoots of your team, and writing content plans for the next months. In other words, they free your hands for pitching investors and executing the development of new product versions. 

Tech\IT

Startups widely use technical consulting services when they want to build and scale high-performing digital products. The services of tech consultants include analyzing software development technologies and ways to optimize and streamline the development with the use of specific frameworks. Besides, tech consultants can cut off unnecessary features from the functionality list and, hence, save you money. 

Financial

Money and spendings worry all people, not just startup founders. Yet, for them, it is often a pain point, and financial consultancies handle all their issues related to money. They create an effective financial plan, scale up sales, and spruce up documentation. 

It is not a surprise that all investors expect startups they invest in to have a transparent and successful cash flow and sales. So, financial consultancies also help with this: they put all financial records to order. 

Lastly, many countries have reduced the amount of taxes startups have to pay. There is no other person in the world like a finance consultant who can help to choose an appropriate tax plan, make your taxes as low as legally possible, and maximize your tax return. 

Compliance & Legal

A legal consultancy’s responsibility is to determine, prevent, and mitigate all judicial issues. Law problems cause headaches and expenses. That is why it is always safer to find a legal startup consultancy to envisage legislation with hiring contracts, financial operations, and client information. The main task of a legal consultant is to prevent the problem till it becomes a court issue. 

Apart from legal issues, such consultancies can also provide compliance help. They ensure that you are aware of government rules and regulations and your vision aligns with the state laws. 

Best IT Consulting for Startups and Why You Need It

The world is transforming fast, and it changes everything around us. We are right in the middle of a technological boom. In 30 years, even toddlers will know how to code and set up the production server for deployment. So, technology matters, and marketing, financial, or legal consulting is not enough today. 

Tech consultancies for startups function as an additional IT department and research & development team rolled into one. 

The main reasons why startups need tech consultancies are lack of expertise or advice for proper analysis of a project, creating a plan of execution, cost analysis, quality control, setting up infrastructure, and all other tech-related headaches. But how to find this consultant shining in technical armor? 

How to Find the Best Business Start Up Consulting Services

You would be surprised, but the perfect startup consultant is the one who has failed once and learned all the lessons the hard way or the company that has helped various startups not to be doomed. It may sound controversial because how can someone who has failed help you not fail? Yet, it turns out that only these people can. 

As per Paul Graham of Y Combinator, a startling 93 percent of companies that get into the accelerator program eventually fail. It means that a company accepted by Y Combinator has less than a one-in-ten chance of achieving success and making profits. 

But it’s not the ideas that lead to failure. Companies have no fortune surviving in the business world due to lack of experience and expertise, poor and inaccurate market research, wrong implementation, absence of funding, and brutal competition. 

As you can see, the reasons can be various. According to CB Insights, startups fail due to lack of cash, wrong choice of a market, strong competitors, flawed business model, legal and regulatory challenges, cost and pricing issues, not the right team, mistimed delivery, poor quality product, disharmony among team or investors, gone bad pivot, and lack of passion. In addition, 65 percent of startups are doomed because of disagreements between the co-founders. 

Although the news about failures may sound shocking and negative, they are indeed good. Failure is not the end of the world for startups. It leads to bigger heights and makes smart and ambitious professionals out of frightened wishy-washy entrepreneurs. Later, they offer new business consulting services to offer their valuable experience and problem-solving skills to others. 

Therefore, to find a technical consultant, open LinkedIn, YouTube, Quora, rating websites like Clutch.co or GoodFirms, and start looking. When you feel like you have found the right guy, consider these aspects: 

• Communication skills. Strong communication during the intro meeting shows how consultancy experts deliver their advice in the future. Be attentive to how they convey their suggestions, discuss problems, and ask questions. You should not choose this partner if they fail to do it clearly, concisely, and in unambiguous terms. 
• Case studies. Portfolio and case studies demonstrate the part experience of the technical consultant and sectors they’ve worked with. Case studies show both the success of the project the startup consultant was working on and the applicability of their expertise to your startup. 
• Client reviews and references. Sometimes, a portfolio can only display what the service provider wants you to see. Client reviews are social proof that confirms the consultancy’s credibility, professionalism, and expertise. Past customers provide you with insights on how the startup consultant communicates during force majeure and how flexible they can be. 
• A personalized approach. Startups consulting services have to provide you with solutions that are tailored to your goals and product specifics. They have to demonstrate an interest in your area and experience in overcoming difficulties you face. 

Conclusion

Startup consultancies possess industry-specific expertise and can help a startup founder not go bust with a snap of a finger. Consultants help aspiring entrepreneurs navigate through barriers in the market and build a strong presence in the competitive environment. Lastly, technical consultants give you the necessary backup and consultation on the newest trends and technologies. 

To find a proper startup consultant for your business, check their communication skills, client reviews, portfolio, and approach. And be ready to skyrocket at a crazy pace then!