Choosing a business advisor
Literally thousands of people offer business advice; some are fantastic and some are dreadful. This article will help you find a great advisor and work with them effectively.
Working with an external business advisor whose perspective isn’t clouded by the necessity of your day-to-day activities can help you crystallise where you need to focus your attention and take your business from strength to strength. Once you find the person to work with, you’ll never want to let them go, but how do you know who to choose? Asking these questions should help.
Do they deliver more value than they cost?
Find someone whose passion is working with you to achieve your goals and deliver more value than they cost. Your advisor should be able to quantify the value outcome you should expect from working with them, and the fees charged should pale into insignificance when compared to the results achieved. A good advisor should be able to help you create improvements that deliver several times their cost onto your bottom line, improve cash flow, and create efficiency. Also consider how much it would cost to hire an employee that delivers this much value. A monthly retainer of two thousand dollars may work out to be a bargain if the cost of hiring such a person is several hundred thousand dollars. (By the way, don’t fall into the high up-front fees trap; instead, agree on a trial period to minimise your risk if they turn out to be no good).
How hands-on are they?
Work with someone who doesn’t just give you loads more work to do. You need someone who is hands-on, and who will actively participate in the implementation of strategies with you. They should also be clear about how you can implement actions and not leave you to figure it out for yourself.
"Your advisor should be able to quantify the value outcome you should expect from working with them, and the fees charged should pale into insignificance when compared to the results achieved."
Are they a clear communicator?
Look for someone who speaks your language – in many cases that means plain English, rather than jargon. Don’t feel stupid if you don’t understand something they’re saying; you’re paying the bill, so you’ve got a right to understand.
Do they understand the key drivers of your business?
Someone who understands the key drivers of your business is a must. Key performance indicators (KPIs) are a fantastic way to measure improvements in all areas of business. The five key areas for you to consider here are product and service development, marketing and sales, operations and finance, human resources, and customer service.
Do you need a specialist or a generalist?
Don’t worry if your prospective advisor doesn’t have any experience in your specific industry. As long as they’re prepared to learn about it without charging you for their learning, they’re still worthy of consideration. A good advisor can be a generalist in all types of businesses.
Want more articles like this? Check out the outsourcing section.
What’s their track record?
Seek someone who has good credentials and a proven track record. Ask them what they’ve helped other clients to achieve and how they did it. Ask for references too, and contact previous clients to discuss their experience.
Do they walk their talk?
Look for someone who actively does what they’re advising you to do. How do they present their service, market themselves and handle sales? How do they operate and handle the financial side of their own business? How do they work with their own staff and how do they handle customer service?
How accessible are they?
If you’re working together as a team with them, you need to be able to communicate effectively and to be able to bounce ideas off them readily. It tends to work best if you’re organised about communication and plan for meetings, but occasional ad hoc calls shouldn’t be a problem either.
Is it all about you or all about them?
Someone who just wants to push their own hobby horse should raise a red flag. It could be that their area of interest is not your problem, yet this is what they want to focus on, because it’s what they know best or are most passionate about. An all-round focus is vital as overlooking key areas that need attention can come at an extremely high cost.
How financially savvy are they?
Getting your financials right helps you understand the impact of changes in other business areas, such as sales and marketing. Top sales are great, but the cash flow at the right time to fund them is critical to success. Regardless of any other credentials your prospective advisor has, financial expertise is absolutely essential.
Can you follow through on your end of the bargain?
As well as expecting professionalism of an advisor, you should reciprocate as follows:
- Schedule set times to meet with them without interruptions or distractions
- Prepare for meetings with notes about what you want to discuss
- Perform agreed actions by the agreed time and be accountable to them – as a business owner it’s easy to get away with not doing things, but it’s far more profitable to stick to the arrangement
- Treat them as part of your team and introduce them to all staff and stakeholders
- Pay them as agreed – it’s very hard for advisors to stay motivated if they aren’t being paid on time
If you work with a trusted business advisor how did you determine who was the best fit for you and your business? What value have they added? Please share your experiences below.