Most people take friends' referrals, call a company in an advertisement or hire someone they meet at an event. But that shouldn't be the full extent of a service-provider search.
Selecting the wrong professionals can cost money and credibility. Management needs to be selective and thorough in its choices.
Most companies need four types of professionals: an accountant, a banker, an insurance broker and a lawyer. The following are 10 questions you should ask service providers.
1. Do they have experience working with Internet companies?
All too often, business people hire outside professionals based on personality or a friend's recommendation. That's a good start, but management needs to know if they have they ever worked within its industry or a similar type of business. Do they understand how much money it takes to be successful on a regional, national or international basis? Do they have contacts that can speed up the time it takes to get to profitability?
2. How many years have they been in the business?
Experience is important to any business, but it could mean the difference between success and failure in a startup. Management wants professionals who have been around long enough to have personally experienced the unavoidable ups and downs of business. Management should look at professionals with 10 to 15 years of experience because those people have been through enough hiccups and learned most of the tricks of their trade.3. Have they ever worked with a startup e-commerce company?
Any manager who has been in involved in a distressed company knows the psychological and financial issues that management has to deal with. Management needs professionals who are calm and experienced at advising and servicing troubled companies.
4. Are their fees reasonable?
Management shouldn't be shy about asking for service providers' fees up front. Make sure the charges are comparable to those of other companies in the area. Right now, anyone with cash to spend dictates the price. No need to pay retail when wholesale is the rule of the day in these rough economic times.