Small Business Consultant vs. Business Coach: Which Advisor is Right for Your Business?

As a small or medium-sized business owner, you're likely used to wearing multiple hats. From big-picture strategy to the day-to-day grind, the demands can feel endless. At some point, you may find yourself wondering: Should I hire a business coach, bring in a small business consultant, or look for more hands-on operational support like a fractional COO?

The answer depends on your specific needs, growth stage, and business goals. In this article, we'll explore the different types of business advisors and coaches available, helping you understand their roles and how each might support your business. We’ll also delve into specialized topics such as coaching for women entrepreneurs and what sets fractional COOs apart.

Understanding the Different Types of Business Advisors

The Unpaid Mentor: A Great Sounding Board, But Limited Involvement

Every business owner benefits from an outside perspective. Sometimes, that perspective comes from an unpaid mentor—a friend or colleague who has sold a business or built something similar. These relationships can be invaluable for gaining directional guidance. However, because these mentors are offering their time informally, they may not have the capacity to provide consistent or deep involvement in your business.

While a mentor can offer insights, their advice often remains surface-level due to limited time and personal investment.

The Paid Outsider: Business Coaches and Consultants

Many business owners opt for paid business advisors, which can range from business coaches to management consultants. These advisors have often spent years studying the theory behind business growth, leadership, and operations. Some may have experience in specific industries or functional areas like marketing or business development.

However, while business coaches and consultants can provide useful frameworks, they typically focus on high-level advice. The challenge for many business owners is translating that advice into actionable steps that make sense for their unique company. And while a business coach for entrepreneurs can help you set goals and refine your leadership skills, the execution of those goals is often left to you.

Paid Insider Advice: More Tailored, But Still Advisory

Advisors with Experience: The Ideal Middle Ground?

Some business advisors or consultants have walked the walk—they've started and scaled businesses themselves. Their advice tends to be more practical and rooted in real-world experience. These professionals offer insights that are actionable and relevant to your business, and they may even assist with high-level planning and implementation.

However, the real question becomes: Do you and your team have the capacity to implement the advice? Even the most tailored, expert advice may fall short if there’s no one within your company with the operational bandwidth to take action on it. This can often leave CEOs and business owners feeling overwhelmed, with more tasks piling up on an already long to-do list.

The Role of the COO: A Hands-On Approach to Scaling Your Business

While business coaches and consultants provide valuable guidance, there comes a point where advice alone may not be enough. This is where a Chief Operating Officer (COO) can make a significant impact. Unlike a traditional advisor who offers strategies, a COO is responsible for executing those strategies and ensuring that the business runs smoothly.

Fractional COOs: An Accessible Solution for SMBs

For many small and medium-sized businesses, hiring a full-time COO is not feasible due to cost. That’s where a fractional COO becomes an attractive option. At ScaleUpExec, our fractional COOs work part-time with businesses, providing operational expertise at a fraction of the cost of a full-time hire.

Unlike most consultants or coaches, we don't just advise—we also implement. Whether it’s refining your business processes, improving operations, or scaling your team, a fractional COO dives into the work to help move the needle.

A COO can bring several benefits to a growing business:

1. Operational Expertise: They can streamline processes and improve efficiency.

2. Strategic Implementation: COOs can turn high-level strategies into actionable plans.

3. Team Management: They often take on the role of managing and developing your team.

4. Complementary Skills: A COO can fill skill gaps in your leadership team as they typically have a wide-range breadth of knowledge and experience.

Business Coaching for Women Entrepreneurs: Unique Challenges, Tailored Solutions

Female entrepreneurs face their own set of challenges, from accessing funding to balancing work and family life. While business coaching for women can help provide support, advice, and encouragement, it’s often the operational challenges of scaling that require more than coaching.

A fractional COO can be particularly beneficial for women-owned businesses by taking on the operational load and freeing up the CEO to focus on vision and strategy. This ensures that the advice offered by a coach or mentor is fully realized and implemented, helping the business grow in a sustainable, manageable way.

Additionally, more than 50% of the ScaleUpExec team is composed of women who have proven experience in the c-suite with scaling both startups as well as larger enterprises. They are able to bring unique insight to help shortcut the path to scaling for women entrepreneurs.

When to Consider a Fractional COO

If you find yourself frequently asking, “What does my business really need?”, it might be helpful to consider the following:

• Do you need advice or execution? If you already have a clear vision but are struggling with the execution, a fractional COO can take that burden off your shoulders.

• Can your team handle the workload? Even with the best business coach for entrepreneurs, implementing advice often requires dedicated operational leadership. A COO provides that focus.

• Are you ready to scale? A coach can help you navigate strategy, but if you're looking to scale, a fractional COO brings the expertise to execute that strategy and manage the growing complexities of a scaling business.

FAQs: What is a Business Advisor?

What Does a Business Advisor Do?

A business advisor provides strategic guidance in key areas like growth, operations, and financial management. Their role is primarily to help identify opportunities for improvement and to offer high-level advice on how to capitalize on those opportunities. However, they typically stop short of implementing those recommendations. In contrast, a fractional COO can complement this advisory role by ensuring that the strategies proposed are executed effectively and fit within the unique operational structure of the business.

Statistic: Businesses that use advisors often see a 20% improvement in profitability, but operational follow-through is critical to fully realizing that potential.

What is Business Coaching?

Business coaching is designed to focus on the personal and professional development of business owners and leaders. Coaches often help refine leadership skills, set goals, and enhance overall decision-making abilities. While this is crucial for personal growth, it often leaves gaps when it comes to the day-to-day operations of a business. Some business owners find it useful to combine coaching with fractional operational support, such as a COO, to ensure that the skills and strategies developed through coaching are carried out within the organization.

What Does an Executive Coach Do?

An executive coach works closely with business leaders to enhance their leadership capabilities, decision-making, and personal growth. The emphasis is on the individual’s development rather than the operational side of the business. For companies seeking a balance between leadership growth and operational execution, a fractional COO can work alongside an executive coach, ensuring that the business remains efficient while its leadership evolves.

What Does a Small Business Advisor Do?

A small business advisor helps with strategic decision-making across key areas such as growth, operations, and financial planning. They typically provide high-level advice on improving efficiency and scaling a business. While advisors can help map out the "what" and "why" of business improvements, many business owners also find it valuable to work with someone who can assist with the "how"—such as a fractional COO who focuses on executing the advice given by an advisor and ensuring operational strategies are put into action.

Statistic: A U.S. Bank study found that 82% of small businesses fail due to cash flow problems, underlining the importance of operational execution alongside strategic advice.

What Is the Role of a Business Advisor?

The role of a business advisor is to provide expertise in areas like strategic planning, operational refinement, and financial management. They offer valuable insights into long-term growth, but they typically do not handle the day-to-day implementation of their recommendations. Some businesses benefit from pairing advisory services with fractional leadership, such as a COO, to ensure that key strategies move from planning to action seamlessly.

Statistic: Companies working with advisors experience a 30% increase in productivity, according to SCORE, but effective execution of those strategies is critical to realizing those gains.

What Services Do Small Businesses Need?

Small businesses often require services across a broad spectrum, including financial oversight, marketing, operations, and human resources. While advisors can identify key areas for improvement, fractional leadership, such as a COO, may offer a hands-on approach to implementing those improvements—whether it’s optimizing workflows or managing complex operations as the business scales.

Statistic: A survey by Small Business Trends shows that 51% of businesses cite managing growth as their biggest challenge, highlighting the need for both strategic guidance and practical management support.

What Do Startup Advisors Do?

Startup advisors assist with early-stage challenges like business planning, product-market fit, and fundraising. While they offer vital guidance, many startups also require someone who can navigate the execution side of the business. This is where a fractional COO can play a helpful role by managing operational setups and ensuring that the advice provided is effectively applied in practice.

Statistic: According to CB Insights, 70% of startups fail within 20 months due to issues like running out of cash or poor market fit. Startups can often benefit from not only strategic advice but also strong operational management to avoid these common pitfalls.

Do Advisors Get Equity?

Some advisors, particularly those working with startups, may receive equity as part of their compensation package. While this helps align their long-term interests with the business, they often remain focused on providing advice rather than direct involvement. Businesses that need more active participation in day-to-day operations may turn to other forms of fractional leadership, such as a COO, for more hands-on support.

Statistic: Advisors typically receive 0.25% to 2% equity according to the Founder Institute, but for businesses that need operational help beyond advice, having a fractional COO ensures that strategies are carried out effectively without needing to give up equity.

Conclusion: Finding the Right Fit for Your Business

Choosing between a business coach, consultant, or fractional COO depends on where your business is and what you need. Advisors and business coaches can provide invaluable insights, especially if you’re looking to refine your strategy or develop your leadership skills.

However, if you're ready to scale and need help managing the operational complexity that comes with growth, a fractional COO might be the right choice. At ScaleUpExec, our team of seasoned COOs have the experience and expertise to implement the strategies that will help take your business to the next level—ensuring that your vision becomes a reality, not just another item on your to-do list.