Sunday, April 25, 2010

Consulting in Small & Medium Business Sector in India - Part 2 of 3

The decision to start a new business can be one of the most important steps that anyone ever takes, and involves far more than straightforward business and management issues. It is extremely important that the client alone makes the final decision. Consulting is about empowering people to take fundamental decisions of this sort for themselves rather than simply advising them what to do.

Several studies show that many people launching their own business for the first time do so because they have been jolted out of their normal career path by a shock such as redundancy, or by a personal “determining event” such as bereavement, divorce or a forced move to an unfamiliar country. Such an experience can marginalize people, and may encourage them to look beyond the ordinary and expected courses of action to new and unfamiliar fields, such as starting a new business. People in this position are often unsure and need support but, because they are marginalized they may not have access to friends and family who might normally help on such occasions. The professional consultant can thus fill an important gap.

Consulting usually goes beyond business issues. An entrepreneur starting a new business has necessarily to involve the whole family, since lifestyles and financial security are almost certainly going to change and the family may also have to work in the business. Some marriages break up, while others may be straightened and enriched by the experience of starting a business. A consultant has to ensure that would-be entrepreneurs think through all such implications.

The consultant neither encourages nor discourages clients but only helps them to look at the situation from every angle and to make their own decisions. Some people may be over-confident or even blind themselves to possible difficulties, while others may lack the confidence to think clearly about the options facing them. The consultant must judge whether the clients needs a “wet blanket” of realism, or a “firecracker” of enthusiasm. The client should not be pushed in any particular direction but should be helped to be in the proper frame of mind to make the right decision.

Potential entrepreneurs often expect consultants not only to be sympathetic listeners but also to provide them with useful contacts, particularly to bankers and sources of finances, or to potential customers. Successful entrepreneurs are, above all, good net workers and the consultant should be happy to play this role. However, there should be no offer to recommend a particular contact or collaborator to the client. Names can be provided and introductions made, but the consultant should not play the role of a “marriage broker”, which could seriously prejudice his or her effectiveness as a consultant if the two roles are confused. This is even more important when a third a third party, such as business support agency or even a bank is not paying by the client but the consultant. The consultant must be scrupulously neutral in every respect.

Entrepreneurs often have to produce business plans, either as part of a course or to submit an application for funding to a bank. While preparing these plans can be somewhat barren and automatic exercise, an effective consultant can help clients to produce plans, which not only satisfy external requirements but also provide a valuable contribution in deciding whether or not to start all. The various components of the business plan can be used as assignments to structure the counseling process.

Consulting people starting new business can be an extremely demanding task, because the whole future of the client and family may be involved. It can also be most rewarding. The contribution of the genuinely effective consultant may well be forgotten or even denied by the client, particularly if the business becomes successful, but the consultant can take satisfaction in assisting someone through a critical stage of life.

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