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What Is the Real Difference Between a Business Coach and Consultant?

Let’s start with why either of them exist: Were you aware of the fact that over 20 percent of small businesses fail within the first year? You know, there's a proverb that says, "Good advice is beyond all price." Whether you're someone who's thinking about starting a business (or looking for ways to keep your company successful), truer words have never been spoken.

Small business owner sitting on the top of a mountain looking out.

That said, there are plenty of articles and videos that you can watch online to help you. At the same time, nothing replaces the insight and expertise of a reputable business coach or business consultant.


But how do you figure out which one, coach… or …consultant, will be more effective for you and your personal business needs? That's a good question, one that we hope to answer for you today.

 

First, What's the Main Difference Between a Business Coach and Business Consultant?

By the time we're done, we're sure that you will be well-versed on this topic. But if you happen to be skimming through, there is one thing that business coaches and business consultants have in common: they're both invested in helping you find solutions to your business-related problems.


business advisor at a white board helping some business owners with their problems
Finding Your Solutions

Where they differ is their overall approach to your situation.


While a business coach is interested in helping you to become a better leader in your company as well as aiding you from a comprehensive level, a business consultant typically tackles improving specific challenges that your business may have.


TLDR: Business Advisors focus on the bigger picture, while consultants home in on direct issues.



Now that you know what coaches and consultants have in common let's branch off to dive into their differences.



What Exactly do Business Consultants Do?

Let’s dive in a bit deeper into how business consultants operate and how they view their role in helping businesses. A good way to help communicate their roles is to recite the number one question that a consultant fields: “What is your specialization?”


laptop sitting open with some website statistics on the screen
Business Data Consultants for Example

There is not a better way to summarize their fit within the business space than that question. While it is not universally true, most consultants have a few niches, and they stick to them almost exclusively.


Think something along the lines of someone that has a ton of experience in setting up the sales process specifically for boutique shops. If you wanted to start a boutique and you knew just about everything else (marketing, accounting, etc.) but were not sure how best to implement the sales / checkout experience you would hire this consultant to come in, set it up, and then exit.


Business consultants rarely stick around more than their established project. In our example above, they would be around just long enough to help set up the sales process and then that would be the end of their obligation and service. Their niche focus allows them to dedicate their experience to one specific need and deliver results based on their unique knowledge.



How Do Business Consultants Fit with Small Businesses?

How a consultant fits within “small” business usually comes down to their specialization and the actual ‘smallness’ of the business. As we saw in the example in the previous section, there was a distinct need for a business just getting its footing, but that same business had everything else in check. In a case like that, the fit is quite clear.


Business consultant meeting with a client in a board room

However, each small business’ need for a consultant really comes down to their specific need. Or rather, HOW specific their needs are.


Business consultants generally thrive in small businesses that are in the very early stages of growth. This is the time when an entrepreneur has holes within their skill sets but lack the funds to hire someone full time to plug the hole.


Small Business Consultants exist almost exclusively to plug these holes for the fraction of the cost of hiring someone: $15,000/one time versus $60,000/per year.



What Are Some of the Examples of the Holes Consultants Fill?

Let’s change up our example to be a small biz that has been around for a few years. Let’s say that you've got a small sales company. You had some initial success, but now the business isn't generating the kind of revenue you would like.


In that case a business consultant might do some the following things:


members of the 501st cosplay standing around for a photo on a mountain
This image came up when we searched for a "Team" photo so we went with it!

Business Analysis:

Research and analyze your company’s data to find roadblocks and opportunities.


Improve your business plan:

There are countless consultants who do nothing but review and write business plans. (For the record, we rarely support the creation of business plans here at Out of the Box. See why: The Business Plan Fallacy)


Process Improvement:

What is your sales process in this example? Perhaps it hasn’t adapted to the change in your customer demographic.


Prepare your business for an audit:

Accountant based consultants are crucial in this area. Having someone on your side that does nothing but audits can be make or break for your business.


This list is but a mere sampling. There are consultants that specialize in just about anything you can imagine. One example: We know of a consultant who does nothing but go around to retail stores and monitors and adjusts their lighting. Hiring a business consultant is sort of like shopping, you find specifically what you need and you buy only that need.


Importantly, many of them have a master's degree, accredited certifications, and years of specific experience. All this expertise means that they are more reliable than some video that you decided to check out on YouTube.

 

However, that doesn't automatically mean that a business consultant is your best bet. Let us explain what we mean by that.



So, Why Should a Business Coach Be Up for Consideration?

Say that your life was currently in total disarray, and you considered booking an appointment with a life coach. They wouldn't just listen to you talk about how your spouse is driving you up the wall or that you hate your job. They would ask the kind of questions that would help you get to the root of why things seem stressful.


Life coach working with a client to figure out their career path.
Life Coach in Action

They do this by encouraging you to look at the overall picture. Then they would help you to create some strategies and set goals that will help you to overcome obstacles in all areas of your life. In many ways, a business coach does the same thing. In fact, the overlap between a life coach and business coach is astounding.


While business coaches do practical things like help you gain clarity about where your company is now vs. where you want to see it go in the future, their assistance goes deeper than that. See, a business consultant may tell you what, specifically to do for a given problem. Meanwhile, a business coach works with you to figure out what is best overall for your business.


In coaching, it's not about giving outright directives so much as asking you the right kind of questions so that you can experience your own "ah-ha moments." Ones that can improve the quality of your life across the board. Business coaches are great at this because many of them are successful entrepreneurs themselves.


A lego superman made to look like he is flying through the clouds
Business Coaches Are Heroes!

If you read all of that and said, "Gee, a business coach sounds a lot like a therapist," to a certain extent, you would be right. By the time you're done meeting with a reputable business coach, you will feel like both your professional and personal life makes much more sense. We are told regularly that our business coaching sessions have improved a client’s personal lives as much as it has their business.



As the Dots Start Connecting, Let’s Dive in a Bit Deeper.

A business coach is basically a type of professional advisor. If there's one word to describe why they're so good at their job, it's because they are empathetic. That's because they've usually walked in your shoes before. In fact, for our business we refuse to bring on a coach unless they have personal experience starting and running their own business before coaching.


To them, helping you is about more than simply coming up with a fix for a temporary problem - consultants. Business coaches want to encourage and support you on a holistic level. How do they do that?



A computer on a clean desk with the words Do More on the monitor
Be Inspired to Succeed

A Business Coach Will Teach You Self-Accountability

Any type of reputable executive coach is going to bring up accountability right out of the gate. That's because, unlike a business consultant, they aren't looking to do all the work for you. Instead, they want to provide you with tools for you to do the work yourself, which makes them the ultimate accountability partner... or accountabilibuddy as one friend of ours calls it.


They make themselves available to you, on-demand, to guide you through the speed bumps and trouble spots of tackling projects within your business. They apply the necessary pressures upon the business owner to make sure that they are moving in the direction and conquering their tasks.


To put it in a clichéd way: Your business coach will help keep you working ON the business rather than getting stuck working IN the business.



A Business Coach Teaches You the Skills You Need

A stark difference between a coach and consultant is that coaches strive to literally teach you the skills you need to accomplish your objectives. In other words, where a consultant will come in and set up your Point of Sale or Lighting for that boutique, your coach will teach you how to do it yourself while guiding you through the process.


An engineering consultant giving a short coarse on engineering methods
A Good Coach Teaches You Skills

On the surface that can sound awfully tedious especially for a small business owner wearing many hats. However, once you learn what needs to be done to take your business to another level, you won't have to rely on others as a "crutch." You will know what to do because a coach provides tips to help you figure it out.


A business coach aims to empower the business owner with the skills, knowledge, and experience for them to remain successful year after year.



A Business Coach Will Show You How to Cultivate Goals… Then How to Manage Them

Regardless of the reason why you reached out to a business coach, they're going to make sure that you end up with short and long-term goals to keep you committed for years to come. It is highly common for a small business owner to stay with their coach year after year.


A goal planning sheet laid out onto a desk
Set Goals , Then Manager Them

Most of them will want to meet with you on a weekly or monthly basis to make sure that you stay on task… that accountability we spoke of above!


This is helpful because if your company has you feeling overwhelmed, a business coach will have you set time aside to work on your goals — so that you don't get distracted. One of our core tenants here at Out of the Box Advisors is to reduce the stress on the business owner.



A Business Coach Will Help You Remember Your Passion

You started your business for a reason. You didn’t make the sacrifice to your personal time, financials, and mental health because you were bored. You had a dream and you started taking steps to achieving that dream.


Girl jumping up passionately on the shore of a lake with a mountain in the background.

Unfortunately, somewhere along the road of small business ownership is a pothole of despair. Something akin to the wall that marathon runners say they hit at some point along the run.


Coincidentally, most business coaches started coaching based on a passion to help you move past that pothole or wall and to move forward closer to official success. In a sense, our passion is to help you remember and stay focused on YOUR PASSION.


A simplified example of how they help might be in assessing your business’ mission statement. Your mission statement is a few paragraphs about why your company exists. Most companies, even the large ones, fail miserably at creating a mission statement that defines the passion.


A business coach can help you to create a business mission statement that will truly define your passion as well as helping you inject that passion into the culture of your business.



A Business Coach Is Concerned About More than Just Your Business

Although a life coach plays a bigger role in helping you with your personal affairs, a business coach will touch on that if necessary. For instance, if your company is in chaos and it has something to do with what is happening in your home life, a business coach will absolutely address it.


beautiful forrest picture during a sunset and fall with light coming through the trees.
Nurture the Root of Your Tree

The reality is that negativity, toxic patterns, or even feelings of fear or anxiety can affect all areas of your world. A business coach knows that sometimes your personal life is the "root" that causes your professional life to be the "tree" that it is. And again, since most business coaches are also business owners, they can relate and offer perspectives that you might not get anywhere else.


Our entire ethos within our business advisors is to care for the business owner as much, if not more, than the business itself.



Sometimes a Coach Can Also Be Your Consultant

As we have mentioned a few times above, your coach is likely a small business owner themselves. Which means they already possess the knowledge to tackle many of the small business problems for which you might hire a consultant.


They also likely have certain areas where they have exceptional proficiency. For example, your coach’s business before coaching could have been as owning a CPA firm. In this case it is easy to see how they could also be your consultant for solving a specific accounting issue. Saving both time and money of hiring that consultant.



Choosing Between a Business Coach and a Consultant

The end game here really comes down to the specificity of your problem. Choosing between one of the other can usually be handled with a simple test:


small business owner thinking about what they need to do while looking out over a mountain range.

Think of the problems facing your business. List them out verbally.


If you find yourself saying things that are a bit nebulous such as “I need to find a way to get more customers” rather than specific like “I need a new website” then you should be looking for a business coach.


Consultants excel at that specific, one-off problems whereas advisors can help you navigate all the intricacies of ‘getting more customers.’


For most small business owners that test leads you to looking for a business coach. Which likely just leads to more questions along the lines of “now what?”


How Do You Select the Ideal Small Business Coach?


Are you now hyped about hiring a business coach? We certainly hope so. Just make sure you know the right questions as you're in the process of selecting the best one. Here are few solid examples to get you rolling on your search:

  • What kind of small business experience have you had?

  • What do you feel is the best reason to hire you as our coach?

  • What other skills do you bring to the table?

  • Are you willing to provide references from your existing clients?

  • How do you view your role within our company if we hire you as a coach?

  • How do you define a successful company?

  • Why are you better poised to help us over another coach?

Confident business man walking down a sidewalk
Look for that Confidence

Some of these are a bit poignant and direct. Part of that is so that you can genuinely assess their answer, but also you’ll want to see how they react. As you're in the process of interviewing potential business coaches, reputable ones will be able to answer these seven questions with both confidence and class.



How Long Should I Meet with My Business Coach?

Now that you know a little bit more about what a business coach does, you might be wondering if they're someone you should meet with indefinitely.


two people standing in front of lettering on a sidewalk that says passion led us here.
Passion Drives Your Business and Ours

It varies by coaching firm, but our recommendation is to have at least one 30 min. meeting with your coach per week. You can get by with every other week or so, but the more the better. Of course, if budget is a concern you can adapt to maximize your gains within your cost limitations.


Of course, this partially depends on how many challenges or obstacles need to be addressed. Expect to maintain your coach for at least a few years of working with each other. But a solid business coach isn't out to drain your business accounts — they want to do the opposite.

 

Let Us Help You with Your Business Coaching Needs

At this point, you can probably teach a mini course on business coaching vs. consulting. But if you have any other questions, comments, or concerns, or you'd like to hire a business coach, don't hesitate to reach out.


Nothing makes us happier than to see companies flourish and thrive!


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