It is quite common for people to confuse business coaching with business consulting. I wanted to spend some time on this blog post talking about how these two services differ so that you understand which service may suit you best.
A business consultant is usually hired for a specific skill or expertise they posses for which their client is lacking. The client can use a consultant in one of two ways. The client can learn expertise from the consultant. For instance, if you want to learn sales skills, you can either attend a sales training course; or you can employ a consultant to invest time teaching you how to sell. Or, you can hire a sales consultant to critique your current sales operation and staff and advise you on what you need to do differently.
In most cases, consultants will invest a substantial amount of their time evaluating, recommending and then helping you implement whatever you have hired them to do. The entire consulting process is called an “engagement”. Most consultants will quote a fixed price for their engagement; or you may pay them by the hour they invest with you on a “retainer” basis. After all, it is difficult to predict how much time it will take to help you if the consultant is unsure about how much help you will need.
When hiring a consultant, you have to know that your consultant knows enough to help you in your situation. The problem with this is that if you need help in a certain area of your business, chances are that you will not be in a position to know if your prospective consultant actually knows more than you; and can help you advance in your business. In order to know that your consultant is good, you may want to get references from others he/she has helped.
Cost: A consultant will charge from $100/hr to $1,000/hr depending on their expertise; but will often charge $10,000 to $1,000,000 per engagement. An engagement will typically cover a specific deliverable that a business owner client wants resolved. A business owner client will be able to quickly gauge whether the fee for the engagement will be worth the benefit of that engagement.
A business coach works differently than a consultant in many respects. First of all, a coach works with his/her clients on a weekly, semi-monthly or monthly basis in a coaching session with his/her client. A coaching session is comprised of three components: 1) 10-minutes to check in with homework from previous session; 2) 40-minutes to talk about any new concerns; and 3) 10-minutes to summarize and assign homework to be completed prior to next coaching session. In the entire coaching session, a professionally trained and certified coach will ask strong open-ended questions designed to get their client to shift their thinking and dig deep for answers they have to their challenges.
While it helps if a coach is experienced in business ownership principles, the coach can usually help a broader group of business owners than a consultant. For instance, if you are a restaurant owner, you will want to hire a consultant who has direct experience in operating a restaurant like yours. However, you can hire a business coach who has general business experience. In a coaching engagement, the business owner will resolve his/her own problems with the assistance of the coach. The business owner will do all of the work and will use the coach as a guide.
A coach will focus on whatever aspect of your life you’d like, including personal challenges that may be affecting your business ownership performance. They will be more in tune to your attitude and perspective with people and your business where consultants will dismiss most of these extraneous factors.
It is extremely important that, if you hire a coach, you hire a certified professional coach. Coaches are certified through coach training programs that differ in how they train coaches; and also through the International Coaching Federation (ICF). Beyond this certification, most coaches focus on a niche. If you are a business owner, make sure that the coach you want to hire has helped other business owners.
Cost: Coaches will charge between $100/session to $1,000/session depending on their level of experience as a professional coach. Coaches often offer group coaching sessions that allow their clients to pay a dramatically reduced fee of $30/session to $300/session. The return on investment is somewhat less definable for business coaching because the specific opportunities for improvement are not as evident as they are in consulting. However, the value of coaching can be much higher than consulting because the business owner is doing the work themselves. A consulting engagement for a month can cost $20,000 while the same business coaching service in that same month will be $800 for four sessions.
Example of the Different Approaches
Let’s take an example of a business owner named Joe. Joe was able to sell his services to prospective clients quite well when he was working for himself. However, now that he has hired three sales people to sell for his company, they are not performing as well as he’d like.
Sales Consultant Path
Joe hires a consultant, Jane, to improve his sales team to become more productive in selling. Jane will evaluate Joe’s sales team, train his team on professional selling techniques, and then implement a sales tracking system for Joe. The cost for Jane’s services will be $10,000 for the evaluation, training and system; and then an additional $10,000 to show Joe how to conduct sales meetings with his team for the next six months.
Jane does everything she said she would. She evaluates Joe’s team and recommends that he replace one of his sales people with a person who would be better suited for Joe’s company. She then conducts training for the sales team, teaching them how to obtain customer needs before they start selling products. Jane then holds Joe’s sales force accountable through weekly sales meetings. Joe watches how Jane does sales management and picks up some good tips on how to manage his sales people better. At the end of Jane’s 6-month engagement, Joe is ready to manage his sales team on his own.
Sales Coach Path
Joe hires a coach, Emma, to help him improve his sales team to become more productive at selling. Emma proposes to coach Joe to become a more effective sales manager with his team. The cost for Emma’s services will be $200 per weekly coaching session for an initial term of 12-weeks for a total cost of $2,400.
Emma works with Joe to uncover why his team isn’t selling and how he can better manage his team to achieve the results he wants. Joe responds well by doing his weekly homework and builds his own sales management system based on issues that emerged in coaching sessions with Emma. Emma helps Joe understand how to evaluate whether or not each sales person is a good fit to sell for his company. In the process, Joe decides he needs to replace one of his sales people; and he needs to hold his sales staff more accountable for results. Joe also changes his sales compensation system as a result of coaching sessions with Emma.
In this brief example, Joe has achieved positive results in both cases. Joe spent more money ($20,000) with Jane the consultant, but he also spent less of his own time on homework assignments while Jane did all of the work of straightening out his sales team. Joe spent less money ($2,400) with Emma the coach, and learned how to be a better sales manager and had ownership of the processes that resulted after the term of his coaching agreement had ended.
If you are a business owner wanting help on moving your business forward in an area you feel ill-equipped to handle, please ask a professional for help. If you want to grow yourself personally and do the work of moving your business forward, you ought to employ a coach. If you want to outsource your challenge of business growth to an expert, then you should hire a consultant.
I originally provided both business consulting and business coaching in my practice, but have now focused primarily on business coaching because I feel it allows me to serve more business owner clients; providing them with more sustainable results than business consulting. If you are interested in obtaining my business coaching services, I encourage you to complete the contact form below to schedule a free initial consultation.
Note from the Author
My name is Jeff Schuster. I am a certified Life and Business Coach serving small business owners, corporate executives and others who want to transition from “expert” to “entrepreneur”. I have been a small business owner for most of my 30-years in the workplace. I grew an energy efficiency and renewable energy engineering and construction company from nothing to over $10-million/year and sold it in 2013. I now help other business owners make amazing progress toward their own dreams of business ownership independence and success.