Question from Maria C.:
Can you please provide examples of outsourcing through consultants that makes the most financial sense?
Each startup's circumstances differ. So it is hard to be specific, without specific information about financial resources. Generally, though, consultants may be cost-effective ways to supply expertise without the costs associated with traditional employment relationships. Later in the startup's development, though, it may make better economic sense to convert these consultants to employees.
If you would like to chat on the specifics of a situation you have in mind, I would be glad to.
All the best,
Based on my personal experience as a consultant in chemistry and materials science for clients ranging from 2-person startups to mid-sized multi-million-dollar companies to Fortune 500 corporations, my clients tell me the same thing. Clients hire consultants when they lack the in-house expertise/experience or simply don't have the time or the human resources to entirely meet their needs. Consultants can be quite cost-effective, especially when consulting is done off-site or via e-mail, phone, etc. This eliminates costly travel and associated overhead expenses; many consultants offer substantially reduced fees for this type of off-site or 'distance consulting.'
Clients specifically use consultants for: serving as an information resource (keeping clients updated on the competition, identifying/describing new products, new technologies, technical literature searches, etc), developing IP (idea generation/brain storming, assistance in writing patent applications, doing patent/literature searches, proposal writing, etc.), assisting in R&D (interacting with technical staff, developing formulations, solving technical problems, etc; note that even these activities can be done via 'distance consulting') and many more projects. Typically, consultants (especially sole-proprietor consultants) can offer the above-cited services at a fraction of the fees that clients would pay if they sought similar services from some of the 'big name' commercial search firms, patent law firms, or even some of the larger multi-person consulting firms. Of course, those larger businesses also have their own unique advantages when it comes to offering specialized and perhaps more extended services in a variety of different areas. It all comes down to what the client really needs; the client then deciding what is the most cost-effective way to meet those needs.
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