Should First Time Entrepreneurs Pay for a Startup Consultant or Not?
“A journey of a thousand miles begins with a single step” — famous Chinese proverb
With entrepreneurship becoming so popular nowadays, it is certainly overwhelming to know which resources are right for you (ie. investor platform, incubators, accelerators, startup consultants, etc..)
As our business who mainly targets startups, we devote a lot of time keeping our ears to the ground and finding interesting startup problems, solutions, and ideas to explore. Here is a post that inspired this post. It was from a popular Facebook group.
This post was from a first time entrepreneur who received 54 comments in 24 hours from startup consultants, entrepreneurs who have used consultants, people who have not used consultants, etc.. (This post has been edited several times and we cannot find the original post.)
The most detailed and interesting comment was this one:
“I started my business with $100 and a hunger to create freedom in my life.
At the time I couldn’t afford coaching or programs and guess what?
I didn’t buy any.
I did market research by talking to people (that costs me nothing).
I then created a membership program (in the B2C space) on WordPress (had to learn how to use WordPress) — that costed me the $100 of Siteground hosting and nothing else.
I had a Facebook group I was running the community in. That cost me nothing.
I then went on and started doing live videos and promote my membership (costed me nothing).
I sold 60 memberships, that replaced my banking job. So I quit.
I then with the money I made bought a new MacBook so I can work faster.
I then sold more memberships and more memberships and here I was making $5000 a month.
And that’s when I decided to invest $2000 in the 90 Day Year.
This year (1.5 years later) I am on track to have a 7 figure year by the end of 2018.
You see… all these programs you see.. you don’t have to buy them.
Also.. the people that sell them.. they don’t need to change their pricing to accommodate “people who can’t afford it”.
Coaching IS NOT a right.
It’s a privilege.
Programs and courses are NOT a right.
They are a privilege.
And Iike any privilege, you either
1) make money and work to deserve it (and reward yourself with it)
2) don’t make money and don’t buy it.
3) look for organizations that offer free mentorship for startups (lots of them in the World)
I don’t understand what the issue is.
THEN invest.” — Anonymous
There were also other comments from the post explaining how startups who are new to the world of entrepreneurship have reservations about investing because of these following reasons.
Why People Don’t Pay for Startup Consultants
- Insecure feelings about their business- or the consultant
- Not 100% sure about their own ROI from the business enough to pay for a consultant
- Lack trust in the consultant
- Feel that there are enough free resources about certain areas on the internet
- They do not understand the long term value of the business and how a consultant can make a difference (ie. spending $1000 to make $20,000)
- They cannot find the right fit for the exact field of expertise that they need
You Don’t Know What You Don’t Know
This famous saying rings true in entrepreneurship. This boils down to whether this million dollar idea is worth the risk you are taking or not. For most first startups who come to our team and ask for investment money, it tends to stop right here and they will tend to go back to their full time jobs or take our advice to ponder about whether or not they go forward for another 4–6 months.
Since we run a startup platform, VenturX, that helps prepare and connect early stage startups for investments, we have the opportunity to see with our own eyes what success and failures within startups look like everyday. Even though they come from diverse backgrounds, the checklist of startups we can accept in order to maintain a high level of successful launches and investments are still the same. We can quickly tell a) if they are in our target market and b) what their next step would be in order to best be prepare for big investors like ours.
Time VS Money VS Quality
From working with over 300 startups and hearing their stories of successes and failures, there are only so many things you can invest into your business if you don’t have the luxury of quality. Quality stems from knowledge and experience. Every investor who has been an entrepreneur in a previous life always talks about getting your hands dirty. That is where your “je ne sais quoi” value comes from and therefore enhancing your overall “quality.” If it is your first time, you really only have the options of investing your time (known as sweat equity) or your money (known as hiring people or purchasing resources).
Even though we have a platform where potential clients can already see there are startups using our platform and getting investment, they have valid questions before signing up or hiring our consultation services. Their questions are ones that all startups should consider when investing any amount of money into their business.
Why Should First Time Entrepreneurs Hire Startup Consultants? (What do potential clients ask?)
- What is your field of expertise? Why should I choose you?
Answer: Helping prepare you for your first big round of funding and helping get to you launch with business intelligence. From working in the startup industry, we get to see the ingredients of success and failures on a daily basis that we use to benefit our consultation clients so they don’t have to suffer with their time and money in the long run.
2. Do you have referrals from other startups?
Answer: Yes — some are on our website: www.venturx.ca and others can be sent to you privately. We strongly recommend our best practices such as developing good positive relationships with clients in order to collect those success stories!
3. How does the consultation services work?
Answer: You can purchase specific packages such as “Review my investor’s pitch deck” or purchase a set of 5 or 20 hours of consultation. We meet on a call to help you with specific goals and come up with a structured plan of implementation and we make sure this plan is executed in the best manner possible.
4. Do you connect us with contacts?
Yes! As an added bonuses are connections and contacts when applicable. We know that not all consultants, coaches or mentors do that; however, it is part of our practice. There are some that are exclusive to only VenturX platform users.
4. Can I get a discount?
Answer: Discounts are available to all VenturX platform users or those who purchased larger set of consultation hours (ie. over 20 hours).
There you have it! The reasons why first time entrepreneurs opt to hire or not hire help. We hope this article helps you make informed decisions that can help your startup in the future years to come! For more startup tips, check out our other blogs!
VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.