Consulting for Opening a Business

Consulting for Opening a Business

What Does Opening a Business Mean?

Consulting for Opening a Business - Entrepreneurs who want to open a business in a particular sector do so for many reasons, such as the following:
They were told the field is profitable, friends and acquaintances including family work in the field and they are drawn to the sector, they are interested in the sector because it allows them to express themselves, they seek standing and status, they want "to show" everyone they know that they are capable, they feel that in their current field of work they are not fulfilling their potential, they heard in the media that the field is profitable, they have nothing else to do besides this, and many other varied reasons.
In other words, even before we turned to business and economic analyses, consulting for opening a business needs to examine what drives the entrepreneur, what their skills for the business in the field are, and their potential to succeed in the type of business they chose.
This task is the responsibility of the business consultant, and it is the entrepreneur's responsibility to examine the business consultant's conclusions.
There are countries where entrepreneurs are required to take a course or acquire suitable education that will prepare them and help them sense their degree of suitability.
In Israel, we witness a particularly high rate of business closures due to the relative ease of opening a business.

Consulting for Opening a Business - What Needs to Be Checked

As written above, it is necessary to examine the entrepreneur's personal abilities, the reasons they want to open the business, and what awaits them at the start of their journey.
Therefore, it is of great importance that the business consultant knows the field and has suitable education and experience.
For example: if an entrepreneur wants to open a restaurant in a commercial center in a large city, it is important that they choose a business consultant who knows the specific city, the sector, the type of business, its reputation, and their connections. This is true for both the entrepreneur and the business consultant.

1. Bridging Gaps - Experienced business owners know well what is happening with the business and what its advantages and disadvantages are.
   The situation is different for an entrepreneur who is new to the field.
   They can get an idea from friends and colleagues who know the field, but "there is no substitute for experience".
   Consulting for opening a business is meant to bridge this gap, since the business consultant knows many businesses in the field, has been through difficulties and obstacles, and has managed to assist entrepreneurs in the businesses they have handled and are handling.
2. Another important point is financial resilience.
   A business consultant is required to examine the entrepreneur's financial soundness.
   An entrepreneur who relies mainly on external debt is at a higher risk level than an entrepreneur with adequate equity that supports the business at the start of its activity.
   Therefore, a business consultant must take the entrepreneur's financial soundness into account in their considerations.
   It should be remembered that an entrepreneur is usually full of enthusiasm, and there is no one-to-one correlation between their enthusiasm and their chances of success.
3. The experience of the business consultant is a substantial matter. It is not enough that they have handled and advised businesses; it is very important to know what the results were and whether they can obtain recommendations from other businesses.
4. Reputation of the consultant is important, but even though the consultant has an impressive reputation, one should check whether they have guided new businesses from their inception and not only in their advanced stages.
   The reason lies in the emotional and mental difficulties the entrepreneur experiences and the consultant's ability to be a kind of "psychologist" who supports the entrepreneur.
5. The business consultant's familiarity with the "Cowley Model" - According to the model, a business consultant can calculate with a high degree of probability the entrepreneur's chances of success.
   It is important that the consultant calculates the chances of success by setting certain variables, but the very fact that they can calculate and estimate variables according to the model shows that their approach is systematic and little is hidden from their eyes.
   This fact will allow the entrepreneur to feel confident and assured that they are in good hands, at least on the planning level.
6. The World of Tax – A business consultant does not have to be a tax advisor or an accountant, but it is advisable that they guide the entrepreneur on what to expect and how to choose their accountant.
   An accountant for "new businesses" needs a greater degree of patience in order to instill in the business the right habits for how to prepare the ongoing material, as well as what is required of it in terms of bookkeeping regulations.
   A business consultant who accompanies a new business should preferably accompany the entrepreneur in the early stages, so they can request from the accountant reports in a format that allows them to better analyze the business activity.
   As a rule, a good relationship between a business consultant and the accountant is a recommended matter, and the mutual contribution can greatly assist the entrepreneur, the business consultant, and of course the accountant, who will gain a stable business for many years.
7. Interpersonal Chemistry - Beyond all that has been written, it is important that the entrepreneur trusts and believes in the business consultant.
   The interpersonal chemistry, which is examined after several introductory conversations, allows the entrepreneur to decide whether the consultant before them suits their character and "their quirks" and whether they will be able to advise them effectively.

The Type of Consultant

In order to examine a venture or business activity, entrepreneurs turn to professionals to assist them.
The advantage of professionals is that they know the sector from their experience and can advise the entrepreneur at the start of their journey or on other issues on the agenda.
When approaching a new venture, one must examine the professional, marketing, engineering-operational, taxation, and financing domains.
In fact, all chapters of the business plan are relevant.
If the entrepreneur lacks some of the skills and needs help preparing a business plan and/or carrying out ad hoc tasks and/or a business coach to improve winning traits, a frontal consultant, and so on and so forth, it is important that they seek the help of a business consultant. 

In the first stage, focusing on planning is important, and therefore the use of economic and business models such as the Cowley Model is relevant to making a fundamental decision about opening a business.
The entrepreneur needs to decide whether they want a strategic consultant-marketing and/or financial consulting and/or an expert in preparing business plans.
Sometimes the entrepreneur compromises on a certain average of specializations, since they cannot afford to hire a consultant for every field, but it is also important that they consult with several business consultants in order to discuss their dilemmas with them.
Business consultants who specialize in consulting for opening a business specialize in issues concerning establishing a business, but they do not necessarily specialize in advising mature businesses.

Continuity

Business consultants for startup businesses specialize in guiding a business at the beginning of its journey. Do they carry the same weight later on, after the business has managed to stand on its own feet, or will their ability to assist further not be as high as before?
It is important that the entrepreneur choose a business consultant with whom their relations are open and direct, so they can consult with them on this matter as well.
Business consultants with integrity can recommend colleagues they know who specialize in solving the issues of a maturing business.
The entrepreneur should examine this and see the consultant's degree of openness regarding continuity based on the consultant's relevant skills.

In summary – the relationship between an entrepreneur and a business consultant is a substantial matter.
Since the field of specialization of business guidance at the start of the journey differs from its continuation, it is advisable that the entrepreneur choose a business consultant suited to the start of their journey, and later consider hiring consultants with specializations suited to mature and/or maturing businesses.

Topics to Examine for a Startup Business:

• The professional field and the entrepreneur's level of skill in the type of business they want to open
• Examining the entrepreneur's personal factors for wanting to open the business, as well as their degree of perseverance and commitment
• Choosing suitable consultants such as: business consultants, brokers, professionals, and so on
• The business field – strategy, marketing, operations, financing, and taxation – preferably examined by means of the Cowley Model or a detailed business plan
• Choosing an accountant and opening files with the Income Tax Authority, National Insurance, and withholdings in the case of employing workers
• The entrepreneur's financial resilience
• The investment payback period or the break-even point, as relevant
• Analyzing the need to bring in additional investors for various reasons at the start of the activity or during its continuation