I Consulted a Small Business Without Consulting Experience
By: Kevin Lee
Tags: Startup, Consulting, Freelancing, Work, Entrepreneurship

I Consulted a Small Business Without Consulting Experience

Photo by Austin Distel on Unsplash

Earlier this year, I decided to try something new. I wanted to see if I could become a freelance business consultant for small businesses. My rationale was that the bigger consultants would avoid the smaller end of the market as they can’t charge as much for the same amount of hours.

But for an individual like me, it had the potential to be a viable business.

This is a real-life case study which will outline the following:

Sourcing the Opportunity

Creating a Win-Win Scenario

What I Managed to Accomplish for the Client

What I Gained from the Experience

Potential Opportunities and Issues

Key Takeaways

Sourcing the Opportunity

I’ll be very honest and tell you that I wasn’t sure what services I would offer, what clients needed and how much I would charge.

Not a great start. But I wanted to try something.

There is often a gap between perception and reality that can only be bridged through experience. So, I decided to get some by offering my services for free.

Consulting is such a broad term that it could involve almost anything. Among the possibilities are streamlining processes, reviewing best practices, improving reporting and analytics, finding ways to cut costs and providing strategic guidance.

I think it’s important to give some context of my skill set and prior experience. I have a background in economics, finance, and investing. I was an investment analyst by profession. So I am quite comfortable working with data and spreadsheets. I also have a strong grasp of business but I lack experience in business consulting.

I contacted people I studied with, former colleagues, and friends to see if there was an opportunity to help out in any way for free.

If you are interested in how I approach my network for opportunities, you might find this article quite useful.

In the end, I managed to find an opportunity in a small, privately-owned fashion brand. The business was growing rapidly and they were expanding the team to run the day-to-day operations.

But as I suspected with many small businesses, they didn’t have a dedicated resource for data analysis or ongoing reporting. It’s usually something that is just tacked onto another job. The company was building their team of salespeople and creative staff but none of them had a background in data analysis.

This made me more confident that I could add value in some way.

In a very honest discussion about what I wanted to do, I told them what I could bring to the table and what I couldn’t. I never took an authoritative stance and I set expectations pretty low as a free resource. I told them I was exploring this as a potential business in the future and wanted the experience.

Given my lack of industry knowledge, I wanted to focus more on streamlining their data reporting. Rather than provide strategic opinions I couldn’t back up with experience.

I’d like to mention that the fashion industry is something I am not particularly interested in. But that was just the opportunity available at the time.

Creating a Win-Win Scenario

Needless to say, there has to be something to gain for both parties involved.

The business would get me as a free resource. I could provide an alternative perspective and offer insights they otherwise wouldn’t have considered. I also agreed to ad hoc requests to make sure that whatever I did for them was as useful, practical, and timely as possible.

For me, there was everything to gain from offering my services for free. I could understand how transferrable my technical skills are to business consulting in a live environment.

More importantly, it would help me understand if this was something I could and wanted to pursue longer term.

If they were happy with my work, it could lead to paid opportunities. The owner is extremely well connected in the industry. So the potential for referrals and building a client base around that network was attractive.

What I Managed to Accomplish for the Client

I spent a couple of weeks going through their data. I got to understand the business and the industry much better. In the end, I identified several areas they could improve upon . . .

Here are the 3 main things I managed to accomplish for them.

More in-depth and timely sales reporting

I consolidated their sales data across multiple wholesale and retail channels. This allowed them to get a clear macro view of how much each of those contributed to their business.

I also dissected and compared their sales by geography, category, style, etc. including relevant returns data over multiple time periods.

To be very honest, I was a little surprised they didn’t have these insights already. But they were growing quite quickly and didn’t have the resources to conduct this type of reporting or analysis in a timely manner.

Cleaned up their product database

I helped to re-categorize and tag products on their system more precisely so it would make for easier analysis, later on, no matter who took over.

They had multiple listings for the same products under different names for no particular reason. Given that they have sold hundreds of products over the years, it was a bit of a mess to say the least. But now that headache is gone.

Analyzed existing sales to optimize future orders for production

One of the things that the business was uncertain about was how many units of each size they should manufacture for each product type.

There was a general rule of thumb that they followed but they wanted something a little more refined.

So I went through their sales data for previous collections for equivalent products. This data wasn’t without limitations though. For example, if you only stocked 10 small shirts, you can only sell 10 even if the true demand is far greater.

Going through sales data meant I could see which sizes were consistently selling out or overstocked. This helped them to identify sizes they should order more and less of in the future.

Overall, the client was very happy with what I managed to do for them in such a short period of time.

What I Gained from the Experience

Although I worked for free, I gained a lot more than money.

I was able to ask questions about their business and I learned a great deal about the nuances of the fashion industry.

While I didn’t contribute to every part of their business, I was able to observe their marketing, sales and production processes. This was necessary to identify where I could add value.

I gained invaluable, first-hand experience as a consultant. That’s something I can leverage for future opportunities.

By offering my services for free in this way, I was able to structure the experience more on my own terms. Arguably, you could say I managed to gain experience in a shorter time than it may have taken to apply for a job in the more traditional sense. I got to work on what I found interesting and avoid the more menial tasks I would have in an internship or entry-level position.

It was a real eye-opening and practical way to learn about what matters to clients. And it helped me understand the bespoke services I could offer as I leveled up my skillset.

Potential Opportunities and Issues

Opportunities

There are many paths that I could go with this. I could try specializing in one particular part of the process or I could keep it broad and offer a more holistic range of services.

This could range from monitoring and reporting to more nuanced strategy consulting as I gain more industry knowledge.

There are also opportunities to recommend useful IT solutions to streamline other parts of their business.

If I decided to go forward with consulting in the future, it’s likely that the work for the next couple of clients would be just as unpredictable. But over time, I could define my services more concretely and find a desirable rate that is mutually agreeable.

Issues

There is a significant amount of educating clients on how they should interpret data. It’s a big part of the value you bring.

But personally, it’s not something I particularly enjoy. You need to make sure the client understands the limitations of the data and how much they can base their decisions on it. This was a single experience so it’s possible other businesses would be more used to this type of insight.

When you aren’t particularly experienced, it can be difficult to get a desirable rate or fee for your services. Given the bespoke nature of individual businesses, it can be difficult to scale without adding more complexity.

Overall, it was an interesting experience and I’m glad I tried it. But I don’t think having multiple clients (and ultimately bosses) across different businesses is something I could enjoy.

Key Takeaways