CHALLENGES IN MANAGEMENT CONSULTANCY BUSINESS IN KENYA
Having been in consultancy for some time now I wish to share about some of the challenges you should anticipate if you are considering doing consultancy. Often when getting into a new venture we focus excessively on the good side and ignore the challenges hence frustrations. Below are some of the challenges you are likely to encounter in consultancy;
1. Disagreements on deliverables
– this can arise if the objectives of the consultancy as outlined in the Terms of Reference (ToR) have not been fully or properly satisfied. To avoid this ensure you have a common understanding of the objectives with the client and how each of them will be realized
2. Disputes on methodology
– this can arise if the methodology is not agreed beforehand. Always ensure you have done a thorough inception report. This is a document that outlines your understanding of the objectives and the methodology to be used, the tools to use such as questionnaires and even the timelines. In case of research this is important to avoid disputes about things like research design, sample size, sampling methodology and framing of questions
3. Project finance challenges
– without proper financing you may end up doing shoddy work e.g. failing to meet sample size targets or having poorly filled questionnaires. To avoid such insist on a deposit before commencing work. If that is not possible, ensure you have sources of funds to do the work. Preferably, such should not be borrowed funds as the project can fail because of many reasons and you are left licking wounds. Avoid mixing project funds e.g. financing another project with funds from another unfinished project. This can cause financial stress leading to unfinished projects with disastrous consequences. It is better to refuse an assignment if client insists on paying less than is required to do the job than accept and fail to deliver putting your reputation on the line. In consultancy, you are just as good as your last completed project. Good reputation is the currency in consultancy
4. Personal finance challenges
– consultancy is one business that requires strict personal finance discipline. Stick to a constant monthly budget and save or invest surplus funds instead of overspending when paid only to suffer later. Also, think about the future when you retire from consultancy. In case you do not subscribe to a pension fund ensure you have invested in assets that will guarantee you reasonable returns when tired or retired
5. Payment delays
– consultancy work is a two-sided coin. Side one is doing the job and side two is pursuing payment. Payments can drag for ages and in some cases can even fail to materialize. You should be prepared for such outcomes. Plan with cash in hand rather than with expected cash. To avoid disputes ensure you have a signed contract before taking up an assignment detailing the deliverables and the payment schedule
6. Timeline challenges
– meeting deadlines is always an issue. Ensure you agree on sufficient time in the Work Plan outlined in the inception report. Keep the client updated in writing on all developments including delays and challenges. Clients will insist on few days so that they pay less. You need to separate the paydays with the workdays. For instance, an assignment billed for 30 days may actually stretch even for 90 calendar days.
7. Assignment drought
– consultancy is not a fast moving consumer service. This means you may find yourself with long times without work to do. You can solve this by having small constant jobs/engagements to do provided that they do not interfere at all with your consultancy work either by distracting you or competing for your time. Use the free time to read and recharge so that you are ready for the next assignment and remain abreast with developments and current affairs in your field. Plan your finances on a 12 month cycle to avoid cash flow surprises when an assignment drought kicks in unexpectedly. Remember consultancy is not easy to do on a part-time basis hence should be your main thing not the side hustle
8. Aborted projects
– this can happen due to many reasons. Someone can involve you in a project only to change later leaving you hanging high and dry. To avoid heartbreaks only celebrate an assignment upon signing the dotted line and only monetize it when cash hits the account. Premature celebration and anticipatory spending can send you into depression if a project you had placed so much hope on aborts unexpectedly.
Ephraim Njega is the Managing Consultant at ProfitZone Consultants, a Nairobi based firm.