The Gamble of Consultants

“A consultant is only as good as the owner.”

That's a saying of mine.

And before somebody gets offended, understand what I'm actually saying.

You can hire the most qualified consultant in the world. Someone with twenty years of experience, impressive clients, a collection of case studies, and enough industry acronyms to make you question whether you're still speaking English.

Wonderful.

Do you understand what the fuck you're paying them to do?

Because if you don't understand your own business, the problem you're trying to solve, or the recommendation being presented, how exactly are you supposed to determine whether the consultant is any good?

You can't evaluate expertise simply because somebody sounds like an expert.

You can't measure success when you haven't defined what success means.

And you certainly can't expect an outside consultant to assume responsibility for every decision you don't understand or don't want to make.

But here's the other side.

Even if the consultant knows exactly what they're doing, even if the owner understands the recommendation, and even if the business executes the strategy correctly, the entire thing can still fail.

Why?

Because theory and reality are not the same fucking thing.

That's the gamble of consultants.

And far too many business owners don't understand what they're gambling on.

Who's Trying to Take Advantage of Whom?

Let's begin with something nobody selling consulting services particularly enjoys discussing.

Consultants are running businesses too.

They need clients.

They need revenue.

They need to cover payroll, software, overhead, and whatever else it costs to operate their companies.

And depending on their business model, they may have a considerable financial interest in keeping you as a client for as long as possible.

There's nothing inherently dishonest about that.

A consultant who provides ongoing value deserves ongoing compensation.

But the incentive deserves examination.

Your objective as the business owner might be to solve a particular problem.

The consultant's financial objective might be to maintain a profitable client relationship.

Those objectives can align.

They can also conflict.

Imagine you hire a consultant to fix a broken customer acquisition process.

The consultant identifies the problem, recommends changes, helps implement them, and the operation begins functioning properly.

Excellent.

Now what?

Does the consultant conclude the engagement because the original problem has been solved?

Or do they discover another six months of optimization, another collection of deliverables, and another reason you should continue paying?

Sometimes the additional work is justified.

Sometimes it isn't.

The point is that the person recommending additional consulting work may also be the person financially benefiting from your decision to approve it.

That's not proof of dishonesty.

It's a conflict of incentives worth understanding.

And it's the owner's responsibility to recognize it.

You Can Be Sold Something You Don't Understand

Suppose a business owner wants to implement artificial intelligence.

Why?

“Because AI is the future.”

Fine.

What are we automating?

“Our operations.”

Which operations?

“Our workflow.”

What workflow?

“The way we do business.”

Wonderful.

We have successfully said absolutely fucking nothing.

Before integrating a new technology, somebody needs to understand how the existing operation functions.

Where does information enter?

Who receives it?

What decisions are made?

What systems are involved?

Where are the delays?

What tasks are repetitive?

Which decisions require human judgment?

What is the expected economic benefit of changing the process?

And what happens when the technology produces an incorrect result?

If nobody can answer those questions, what exactly is the consultant supposed to integrate?

Now imagine a technology consultant arrives with a polished presentation.

They discuss AI agents, orchestration, automation architecture, language models, APIs, machine learning, and digital transformation.

The owner nods.

It sounds sophisticated.

It sounds expensive.

It sounds like progress.

But the owner still hasn't defined the business process.

So the consultant may be proposing an elaborate technical solution to an operational problem nobody has properly investigated.

And because the owner doesn't understand the underlying requirements, they may have no practical way to challenge the proposal.

A sophisticated solution to an undefined problem is still an undefined investment.

The U.S. Small Business Administration emphasizes understanding customers, competitive conditions, resources, costs, and the business model when evaluating opportunities. Those fundamentals don't disappear because the proposed solution involves fashionable technology. [1]

A consultant may be able to help establish the missing operational requirements.

That can be a legitimate engagement in itself.

But it should be identified and priced as diagnostic work—not sold as though implementation requirements have already been established.

You don't need to understand every technical detail better than the consultant.

That's why you're hiring expertise.

But you should understand the business problem well enough to know whether the proposed work addresses it.

Otherwise, you're purchasing confidence.

Not necessarily competence.

Case Studies Don't Pay Your Bills

Consultants love case studies.

“We increased revenue by 200%.”

“We reduced acquisition costs by 40%.”

“We helped a client generate seven figures.”

Congratulations.

Now tell me what that has to do with my business.

What industry was the client in?

What was their starting position?

What resources did they already possess?

How much did they spend?

How long did it take?

What happened to profit?

Were those results typical?

And what part of the outcome can reasonably be attributed to the consultant?

A 200% revenue increase sounds wonderful.

But increasing revenue from $10,000 to $30,000 is a very different undertaking from increasing revenue from $10 million to $30 million.

Neither result tells you whether the business made more money after accounting for the cost of producing that revenue.

A case study can demonstrate experience.

It cannot establish that the same strategy will work for you.

The Federal Trade Commission has warned that some business coaching and opportunity sellers use misleading success stories, questionable earnings claims, and promises of proven results to persuade buyers. The FTC has also brought enforcement actions involving deceptive business coaching claims. [2][3]

Those cases do not establish that consultants generally operate dishonestly.

They establish something more specific and useful:

Impressive claims are not a substitute for verifying what you're being sold.

And that brings us back to the owner.

If you're impressed by a collection of numbers you don't understand, that's a problem.

If you approve a proposal because the consultant knows more acronyms than your employees, that's a problem.

If you hire somebody because they're charming, belong to your social circle, share your background, or were recommended by someone you like, without evaluating whether they can perform the work, that's also a problem.

Relationships can help establish trust.

They don't establish competence.

And trust doesn't eliminate the need for accountability.

The Consultant Isn't the Only One Who Can Be Full of Shit

Now let's turn the conversation around.

Because business owners can be terrible consulting clients.

They hire somebody to solve a problem.

The consultant investigates.

A strategy is developed.

The owner approves it.

Implementation begins.

Then two weeks later:

“I'm not seeing results.”

Or:

“I've been thinking. Let's change direction.”

Or:

“Can we stop doing that and try this instead?”

Or my personal favorite:

“Why isn't this working yet?”

Maybe because you keep fucking changing it.

Businesses operate through processes, dependencies, people, budgets, and time.

A change in one part of the organization can affect several others.

A marketing initiative might require months to generate enough useful information.

An operational restructuring may require employee training and adjustments to existing systems.

A new product may need development, testing, distribution, and customer adoption.

None of those processes becomes instantaneous because ownership is impatient.

Now imagine a consultant who correctly identifies a problem and recommends a reasonable solution.

The owner agrees.

But halfway through implementation, the owner changes the objective.

The consultant adjusts.

Then the owner changes it again.

The consultant adjusts again.

Eventually the project exceeds its budget, misses its timeline, or fails to deliver the original objective.

Who's responsible?

Maybe the consultant managed the changes poorly.

Maybe the owner repeatedly undermined the approved strategy.

Maybe both parties failed to establish how changes would be evaluated and authorized.

But it would be absurd to assume the consultant is automatically responsible simply because the owner paid the invoice.

Hiring expertise does not transfer ownership of the business.

You still have to manage your decisions.

You still have to provide accurate information.

You still have to make resources available.

And you still have to understand the consequences of changing direction.

If you hire a consultant, refuse to follow the agreed process, and then blame them because the outcome wasn't what you expected, you may be the reason the engagement failed.

The Working Relationship Is Part of What You're Buying

A consultant doesn't operate in a vacuum.

They depend on information from the business.

Financial records.

Operational processes.

Employee knowledge.

Existing technology.

Customer behavior.

Management decisions.

And an understanding of what ownership is actually trying to accomplish.

Suppose a manufacturing company wants to reduce production costs.

It hires an outside consultant.

The consultant reviews expenses and recommends reducing staffing.

Sounds straightforward.

Except the consultant never speaks with the production supervisor.

They don't investigate why certain employees are assigned to particular shifts.

They don't examine maintenance downtime.

They don't understand which employees possess specialized skills.

And they don't account for what happens when the proposed reductions slow production.

The recommendation may lower payroll.

It may also reduce output, increase overtime, delay customer orders, or create additional expenses elsewhere.

Now, whose fault is that?

The consultant should investigate sufficiently before making a recommendation.

But ownership also has a responsibility to ensure the consultant receives access to the people, records, and processes necessary to understand the operation.

If the owner restricts that access, the consultant should identify the limitation and explain how it affects the reliability of the findings.

If the consultant proceeds as though the missing information doesn't matter, that's a professional failure.

If the owner deliberately withholds relevant information and expects an accurate recommendation anyway, that's a management failure.

You cannot demand an informed recommendation while preventing someone from becoming informed.

And you cannot reasonably expect a consultant to understand your organization better than the people operating it if you never let those people participate.

Sometimes the Consultant Is Doing Exactly What You Asked

Here's another uncomfortable possibility.

The consultant may not be incompetent.

They may not be dishonest.

They may be doing exactly what the contract requires.

And the work may still be worth very little to the business.

Let's take a hypothetical warehouse that hires an inventory-management consultant.

The consultant reviews stock reports, prepares weekly variance dashboards, documents procedures, and conducts recurring management meetings.

Every month, the agreed reports and meetings are completed.

The consultant sends an invoice.

The business pays it.

The relationship continues.

But what is the business trying to accomplish?

More accurate inventory records?

Fewer stockouts?

Lower shrinkage?

Faster order fulfillment?

Fewer picking and shipping errors?

If nobody established the objective, how does ownership evaluate the work?

The consultant can demonstrate that every dashboard, procedure, and meeting required by the contract was delivered.

Wonderful.

Did that work improve inventory accuracy, reduce operating costs, or make fulfillment more reliable?

Maybe.

Maybe not.

Some inventory problems require time, employee participation, systems changes, and repeated measurement before an improvement becomes visible. That doesn't excuse the absence of a defined operating objective or a reasonable measurement framework.

The owner may be satisfied because something is being produced.

The consultant may be satisfied because the contract is being fulfilled.

And neither party may be asking whether the expense makes economic sense.

Activity is not automatically value.

A business can receive every deliverable it purchased and still have purchased the wrong thing.

That's not necessarily a consulting scam.

It may be a purchasing failure.

And if ownership keeps renewing the arrangement without examining its purpose, the problem is no longer limited to the consultant.

You Can Spend More Money Trying to Save Money

Business owners love talking about reducing costs.

Nothing wrong with that.

A business should examine its expenses.

But there's a difference between cutting costs and improving economics.

Suppose a company operates a customer support department.

The department costs $180,000 annually in salaries and related expenses.

Ownership believes outsourcing will be cheaper.

An outside provider offers to handle the work for $120,000 annually.

Excellent.

That's $60,000 in potential savings.

Except the company hasn't examined the entire operating arrangement.

The outside provider charges additional fees for certain services.

Internal employees still need to supervise the vendor.

Customer issues take longer to resolve.

Some work must be brought back in-house.

And the company incurs one-time transition costs.

Let's put hypothetical numbers to it.

Under these assumptions, the supposedly cheaper arrangement costs $12,000 more annually.

Add a hypothetical $25,000 transition expense, and the first-year cash cost of switching rises to $217,000.

That's $37,000 more than maintaining the existing operation for the same period, before considering any change in service quality or customer retention.

These figures are illustrative, not evidence about a particular business.

The example demonstrates a basic financial principle.

The cheapest-looking invoice isn't necessarily the cheapest operating decision.

Now, outsourcing could still make sense.

Perhaps it provides specialized expertise, better coverage, lower long-term risk, or capacity the company couldn't otherwise obtain.

Those benefits should be evaluated too.

But if ownership never calculates the full cost, how can it know whether the decision saves anything?

And if a consultant recommends outsourcing without understanding the existing operation, how reliable is that recommendation?

The question isn't whether an expense is large.

The question is what the expense produces, what alternatives cost, and what the business gains or loses by changing it.

Sometimes the most expensive decision is the one made in the name of saving money.

Even the Best Consultant Can Be Wrong

Now we arrive at the part that makes consulting a genuine gamble.

Let's assume the owner is competent.

They understand their business.

They define the problem.

They provide the necessary information.

They hire a qualified consultant.

The consultant conducts a reasonable investigation.

They develop a commercially plausible strategy.

Ownership approves it.

The company commits the necessary resources.

Implementation proceeds as planned.

And the strategy fails.

No fraud.

No obvious incompetence.

No dramatic management interference.

It just doesn't work.

That can happen.

Because business strategy is not a mathematical guarantee.

A consultant can examine existing market conditions and develop a reasonable expectation about future demand.

But customers are not obligated to behave according to the forecast.

Competitors can respond.

Suppliers can raise prices.

Economic conditions can change.

Technology can alter the market.

A new product can arrive too early.

An otherwise promising opportunity can arrive too late.

And customers may simply decide they don't want what the company is selling.

The SBA's market-research guidance explicitly treats research as a way to understand demand, competition, market saturation, pricing, and risk—not as a guarantee that an opportunity will succeed. [1]

A strategy can be reasonable when approved and unsuccessful when executed.

Those statements are not contradictory.

They're the reality of making business decisions under uncertainty.

Which means we need to distinguish three very different outcomes.

A consultant can fail because the work was incompetent or deceptive.

A consulting engagement can fail because ownership or management undermined the implementation.

Or a properly evaluated and competently executed strategy can fail because its assumptions did not survive contact with reality.

Those situations should not be treated as interchangeable.

And an owner who doesn't understand the difference is going to have a difficult time evaluating any consultant.

Good Decisions Can Produce Bad Results

Let's say a consultant recommends entering a new market.

The company conducts research.

There is evidence of customer demand.

The expected contribution margins are attractive.

The required investment is within the company's financial capacity.

The downside risk is understood.

The company proceeds.

Six months later, a competitor introduces a significantly cheaper alternative.

Customer demand shifts.

The original revenue forecast becomes unrealistic.

The expansion loses money.

Was the original decision bad?

Not necessarily.

We would need to examine what information was available when the decision was made, whether the risks were reasonably evaluated, and how management responded as circumstances changed.

Now consider the opposite situation.

An owner hires a consultant because they liked the sales presentation.

Nobody investigates the market.

Nobody evaluates costs.

The company launches an initiative without a serious plan.

And somehow it becomes profitable.

Was that a good decision?

The outcome was good.

That doesn't mean the decision-making process was sound.

Luck can make a bad decision profitable.

Uncertainty can make a reasonable decision unprofitable.

Results matter. But results alone don't tell you whether the people making the decisions knew what the fuck they were doing.

A competent consultant should be evaluated on the quality of their analysis, the reliability of their representations, the work they agreed to perform, and how they responded to changing information.

The business outcome matters too.

But no consultant can responsibly promise that every commercial variable will behave as expected.

If they do, you should probably ask what they're basing that promise on.

Follow the Fucking Money

Let's return to the financial relationship.

Suppose a consultant charges $5,000 per month.

That's $60,000 annually.

The owner sees a manageable monthly expense.

The consultant sees recurring revenue.

But what does the business receive?

Maybe the consultant helps improve operating profit by $150,000 annually.

That could be an excellent investment, depending on the costs, risks, and sustainability of the improvement.

Maybe the consultant provides specialized expertise that prevents a far larger loss.

That can also be valuable, even when it doesn't create a new revenue stream.

Or maybe the consultant produces presentations, attends meetings, and delivers reports that nobody uses.

The invoice looks the same.

The economics don't.

Now imagine the business keeps the consultant for three years.

That's $180,000 in fees.

Was the engagement worth it?

You cannot answer that question by looking at the consultant's invoices alone.

You need to understand the original objective, the work delivered, the costs incurred, and the value reasonably attributable to the engagement.

And you need to consider what would have happened without the consultant.

Perhaps the business would have achieved similar results internally.

Perhaps it would have failed.

Perhaps the consultant prevented an expensive mistake.

That alternative outcome is often uncertain, which makes precise attribution difficult.

But difficulty measuring value isn't permission to stop asking whether value exists.

If you don't know what success looks like, how will you know when the consultant has earned their money?

And if you can't answer that, why are you signing another contract?

Stop Hiring People Because They Sound Smart

Here's what I would tell a business owner considering a consultant.

Before hiring anybody, understand what you need.

Not necessarily how to solve the problem.

That's why you might need the consultant.

But what is the actual business problem?

What is happening now?

What would you like to happen instead?

What are the relevant costs?

What does the current operation produce?

What resources are available?

What risks are acceptable?

And how will you evaluate whether the engagement was useful?

Then have the consultation.

Ask questions.

Ask the consultant to explain the recommendation without hiding behind technical terminology.

Ask what assumptions the proposal depends on.

Ask what information they need from your business.

Ask what happens if the strategy doesn't work.

Ask what they're responsible for and what remains your responsibility.

Ask how additional work is authorized.

Ask what would justify ending the engagement.

And please, for the love of your bank account, stop being impressed simply because somebody knows more acronyms than you.

If a consultant can't explain the business purpose of a recommendation in terms you can understand, you need more explanation before approving it.

That doesn't mean every complicated subject can be made simple.

It means the business consequences should be intelligible to the person paying for them.

Use the Tools Available to You

Here's something business owners can do today that wasn't nearly as accessible in the past.

With the participants' consent and in compliance with applicable recording and privacy laws, record the consultation.

Transcribe it.

Then use a tool such as ChatGPT to help examine what was actually discussed.

Not to automatically decide whether the consultant is good.

Not to replace legal, financial, or technical due diligence.

And certainly not to upload confidential business information into a service without understanding its privacy and data-handling implications.

Use it to ask better questions.

What did the consultant recommend?

Which terms need explanation?

What assumptions were made?

Which costs were discussed?

Which costs were omitted?

What information would be needed to evaluate the recommendation?

What parts of the proposal address the company's stated objectives?

What questions should be answered before signing?

You can even compare multiple proposals against the same business requirements.

That doesn't eliminate the possibility of being misled.

AI can misunderstand a transcript, miss context, or produce incorrect analysis.

But it can help an owner organize information and identify questions they otherwise might not think to ask.

The objective isn't to have AI run the business.

It's to improve the owner's ability to understand the decisions they're making.

A sophisticated tool cannot define your business objectives for you.

And neither can a consultant without your participation.

The Consultant Has Responsibilities Too

None of this gives consultants a free pass.

If you sell expertise, you should possess the expertise you're selling.

If you recommend a strategy, you should be able to explain the reasoning behind it.

If you don't have enough information to reach a reliable conclusion, say so.

If the client is asking for something outside your competence, acknowledge the limitation.

If the proposed work is unlikely to solve the client's problem, don't pretend otherwise just to secure the contract.

And if a project requires more money or time, explain why.

A good consultant should be willing to challenge a client when the client's assumptions are unreasonable.

But challenging a client is different from treating the client as an unlimited source of revenue.

Likewise, a business owner should be willing to hear uncomfortable findings.

But being open to criticism doesn't mean blindly accepting every recommendation.

The relationship requires competence on one side and informed accountability on the other. Ideally, both parties bring both.

The consultant is responsible for the quality and honesty of the professional work.

Ownership remains responsible for deciding what the business will do with it.

And both parties should understand where their responsibilities begin and end.

Sometimes the Right Answer Is Not to Hire a Consultant

This might be the least exciting recommendation in an article about consulting.

Sometimes you don't need one.

Maybe the problem is already understood internally.

Maybe your employees have identified a practical solution.

Maybe management simply hasn't authorized the necessary changes.

Maybe the business needs to document an existing process before investing in technology.

Maybe ownership needs to decide what it wants.

Or maybe a consultant would genuinely provide expertise, independence, capacity, or an outside perspective the business doesn't possess.

The point is to make that determination before spending money.

Hiring a consultant should not become a substitute for listening to employees.

It should not become a way to avoid making management decisions.

And it should not be an expensive exercise in finding somebody who agrees with the owner.

Independent verification can be valuable.

But an independent opinion isn't automatically a better opinion.

And paying somebody to repeat information already available inside the organization does not necessarily improve the decision.

Sometimes the business needs outside expertise.

Sometimes it needs better internal management.

Knowing the difference can save a considerable amount of money.

So, Who's Responsible When the Gamble Fails?

That depends.

If the consultant misrepresented their expertise, concealed important limitations, or failed to perform the agreed work, the consultant should be held accountable.

If ownership withheld information, repeatedly changed instructions, refused to commit necessary resources, or ignored reasonable warnings, ownership bears responsibility for those decisions.

If both parties acted competently and the strategy failed because market conditions or customer behavior differed from reasonable expectations, the loss may be a legitimate commercial risk.

And if both parties contributed to the failure?

Then both should be examined.

It's tempting to blame whichever party is easiest to blame.

The owner says the consultant wasted the company's money.

The consultant says the owner didn't follow the recommendations.

Maybe one is right.

Maybe both are right.

Maybe neither understood the business well enough to recognize the real problem.

That's why the relationship must begin with defined objectives, clear responsibilities, a realistic understanding of the costs, and an agreement about how progress will be evaluated.

Not because those precautions guarantee success.

Because they make it easier to understand what happened when success doesn't arrive.

A Consultant Is Only as Good as the Owner

Let's return to my saying.

“A consultant is only as good as the owner.”

It doesn't mean every consultant is competent.

It doesn't mean owners deserve to be deceived.

And it doesn't mean the owner must know more than the expert they're hiring.

It means the owner cannot surrender responsibility for understanding the business simply because somebody else has been paid to provide advice.

A consultant can bring knowledge.

They can bring experience.

They can bring an outside perspective.

They can identify opportunities and problems that management has overlooked.

They can help develop and execute strategies.

But they cannot guarantee that customers will buy, competitors will cooperate, costs will remain stable, or the market will behave according to a presentation.

And they cannot make an owner understand something the owner refuses to examine.

So before you hire a consultant, ask yourself:

Do I understand the problem?

Do I understand what this person is proposing?

Do I understand what it will cost?

Do I understand what I am responsible for?

Do I understand what could go wrong?

And do I understand how I'll know whether the investment was worthwhile?

If the answer to those questions is no, you might not be ready to hire the consultant.

You might first need to understand your own business.

Because at the end of the day, consulting is a gamble.

You can improve the odds by hiring competent people, conducting due diligence, establishing clear expectations, and managing the relationship responsibly.

But you cannot eliminate uncertainty.

You are paying for expertise, not purchasing a guaranteed outcome.

And if you don't understand the difference, you're not just gambling on the consultant.

You're gambling on your own ability to run the fucking business.

Continue Reading on anuhlest

• Should I Hire a Marketing Agency, an Employee, a Consultant, or Build It In-House? — how the work, economics, accountability, and institutional knowledge should determine the working arrangement.

• There Are No Five Fucking Ways to Improve Your ROI — why the investigation must determine the recommendation rather than defend a predetermined service.

• “We Need to Take Things to the Next Level.” What the Fuck Does That Mean? — why ownership must define the direction before assigning responsibility for growth.

• Your Business Made a Million Dollars. Where the Fuck Is It? — why understanding the money is part of understanding whether outside expertise created value.

• Everybody Did Everything Right. Did Any of That Shit Produce the Outcome You Needed? — why completed work and improved metrics do not automatically establish business value.