Hiring a business consultant? Eleven questions to ask before you sign the consulting agreement, with the signs of a good answer and a worrying one.
A good meeting, a tidy presentation and a familiar name seem like enough to sign a consulting agreement. They aren't.
A more reliable way to choose a business consultant is to ask questions and pay attention to the answers. This post has eleven questions, and for most of them it says what a good answer looks like and which answer should worry you.
You don't need to ask these questions like an interrogation. An ordinary conversation is enough. Notice, too, which ones the consultant answers before you ask.
I compiled this list from reputable guides on choosing a consultant. The sources are at the end of the post.
Before you hire a business consultant: do you know where you want to go, and why?
In A stagnant business becomes a marsh, I wrote that motion means knowing where you are going, why you are going, and how. If you know the "why" but not the "how", someone can show you the way. But no one can show the way to someone who doesn't know where they want to go.
The consultant is the person who shows the way. The destination is something you have to know.
There is also one mistake that is better avoided before any contract: having already made your decision and only wanting someone to confirm it. Business owners who go to a consultant with that intention often end up with a bad experience of working with one.
1. Before you propose anything, what will you do to understand our problem?
The real cause of a business's problem is often different from what its owner thinks. A consultant who doesn't ask good questions is like a doctor who writes a prescription without an examination.
- Good answer: They meet with you before writing a proposal and ask a lot of questions to understand what you need.
- Warning sign: They offer a solution before gathering information.
2. When this work is finished, what will be different about our business?
This question is after the result, not a list of the things the consultant will do.
- Good answer: They name a specific result for the business, one that can be measured.
- Warning sign: Instead of a result, they explain their method and its stages. Or they promise overnight change.
3. What exactly will you deliver, and what is not part of the work?
Many consulting projects fail because their scope is too broad or too vague.
- Good answer: Specific deliverables, the things that are not part of this contract, and a realistic timeline.
- Warning sign: General phrases such as "support on strategy", with no specific deliverable.
4. Who will do the work?
In consulting firms it happens that senior people sell the project and less experienced people do most of the work. A team with both senior and less experienced people only works when the senior people stay involved.
- Good answer: The names and backgrounds of the people who will do the work are in the proposal.
- Warning sign: The presentation is strong, but the team that will do the work is weak, or it isn't clear who they are.
If you are paying for a particular level of experience, write that level into the contract.
5. Who have you achieved this same result for, and who can we talk to?
A good reference has four qualities: they are real, their work is relevant to what you need, they worked with this same team, and the work is from the last few years.
- Good answer: They give several references who talk about the consultant personally, not only about the firm.
- Warning sign: They avoid giving references.
Ask the reference whether they would hire the same consultant again if the need came up.
The references a consultant gives are the ones the consultant has chosen. So also ask colleagues you trust who they worked with for a similar need, and what the result was.
6. How is the fee calculated, and what happens if the scope changes?
In my view, everyone has the right to get value equal to the money they pay. The code of ethics of the Institute of Management Consultants USA also asks its members to agree the basis for fees and expenses with the client in advance.
- Good answer: The basis for fees and expenses is clear in advance, payments are tied to the stages of the work, and if the scope changes, the change is recorded and the contract is updated.
- Warning sign: They don't say on what basis the fee is calculated.
There are two views on hourly fees. One says that hourly fees create a conflict of interest, meaning they separate the consultant's interest from yours: the longer the project runs, the more the consultant earns. This view recommends a fixed price, or at least a cap on the hours. The other view says hourly fees are appropriate when the scope can't be defined in advance.
If your budget is small, make the scope smaller. Don't go to a weaker consultant.
7. What do you need from us?
If employees don't get behind the work, the consultant's recommendations are carried out badly or not at all.
- Good answer: The proposal states what your commitments are.
Your part is clear too. Don't hide information from the consultant. Tell your employees why the consultant is there, and keep them informed of how the work is going.
8. Do you only advise, or do you stay with us through implementation too?
Some consultants diagnose the problem and give you a plan. Others carry out the plan. No consultant is good at everything, so you need to know which one you need.
- Good answer: They state their specialty precisely and narrowly, they stay available for a while after delivery for corrections and advice, and training your employees is one of their deliverables.
- Warning sign: They describe their specialty with a long list. Or you want implementation from them too, but they have no record of implementing their own recommendations.
9. Do you work with a direct competitor of ours? Do you benefit from anything you recommend?
The code of ethics of the Institute of Management Consultants USA asks its members to disclose early anything that might affect their judgment.
- Good answer: They say clearly whether or not they work with a direct competitor of yours. If they have an interest in a product or service they recommend, they say so in advance, and they take no commission without your agreement. They also sign a confidentiality agreement.
- Warning sign: They talk freely about the confidential information of their previous clients. They may do the same with yours.
10. If you disagree with us, will you say so?
A consultant who agrees with everything you say is not worth much to you.
- Good answer: They have their own view and defend it.
- Warning sign: They agree with whatever you say.
You learn the answer to this question more from how they behave than from what they say.
11. How can the engagement be ended, and who owns the deliverables?
Make the end of the work clear at the very start.
- Good answer: It is clear how much notice each side must give to end the engagement, what is paid for the work done up to that day, how confidential information is returned, and who owns the deliverables.
The same code of ethics asks the consultant to offer to withdraw if their impartiality is put at risk.
What the consulting agreement should spell out

- The goal and scope of the work
- The deliverables, and the things that are not part of the contract
- The start and end dates, and the stages of the work
- The experience level of the people who will do the work
- The basis for fees, the expenses, and when payments are made
- How a change in scope is recorded
- Confidentiality of information
- Work with direct competitors, and disclosure of conflicts of interest
- Ownership of the deliverables
- The terms for ending the engagement
This list comes from sources in other countries and is not legal advice. Before you sign, show the text of the contract to a lawyer.
Three common mistakes when hiring a business consultant and working with one
- Paying for a big name. Specialist firms may have deeper expertise in that same subject, and be cheaper too.
- Choosing the cheapest offer, or the best-written proposal. Some firms spend a lot of time writing proposals and are weak in delivery.
- Dropping the recommendations. A signed contract doesn't mean the problem is solved. If you leave the recommendations half done, the consultant's work doesn't lead to a result.
Sources
All of the sources are in English.
- David A. Fields, 10 questions you should always ask before hiring a consultant, IndustryWeek
- Code of ethics, Institute of Management Consultants USA (IMC USA)
- Hiring a business consultant: how to maximize your return, Business Development Bank of Canada (BDC)
- Hélène Laffitte, A guide to buying consulting, Consulting Quest
- Alan Weiss, How to choose a consultant
- Gordon Sheppard, 5 steps to hiring the right management consultant, Canadian Association of Management Consultants (CMC-Canada)
- The dos and don'ts of hiring a consultant, Management-Issues
- Seven mistakes clients make when choosing a consulting firm, Consultancy.uk
- A guide to hiring a consultant, Purdue Extension
- Consulting agreements, Ironclad
- Six main clauses of a consulting agreement, LegalVision
Before you hire a consultant, do you know where you want to go and why?
Write back to me