10 tips for choosing a great business advisor

1st January, 2015

Financial Advice

It can be extremely valuable for a business owner to have someone externally, who helps them work on the business. Finding one can be a minefield as there are literally thousands of people offering business advice — some are fantastic, some are dreadful. Here are some tips on how to find the best and how to work with them:

1. Impact must be bigger than cost

A good advisor should be able to help you create improvements that deliver several times their cost to your bottom line, add to cash flow and create efficiency. They should also be able to quantify the value outcome of your work together.

2.  Being hands-on

Work with someone who doesn’t just give you loads more work to do. You need someone who is ‘hands-on’, who will actively participate in the implementation of strategies with you and your team. They should also be clear about how you can execute the strategies and not leave you to figure it out for yourself.

3. In plain English

You need someone who speaks your language — ‘plain English’ rather than jargon. Don’t feel stupid if you don’t understand what they’re saying. If you’re paying the bill you’ve a right to understand.

4. Understanding KPI

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. Most businesses can be segmented into five main areas:

• Product and service development
• Marketing and sales
• Operations and finance
• Human resources
• Customer service

5. Eager to learn

Find someone who is prepared to learn about your industry, but not charge you for their learning. They don’t necessarily already need to have knowledge, as a good advisor can be a generalist in all types of businesses.

6. A good record

Seek someone who has good credentials and a proven track record. Ask them what they’ve helped other clients achieve and how they did it, and get references.

7. Walk the talk

Look for someone who ‘walks the talk’ and have demonstrated what they are advising you to do. Look at how they present their service, how they market themselves and handle sales, how they operate and handle the financial side, how they work with their own staff and how they handle customer service.

8. Available for you

Make sure they are accessible and available for you. If you’re working together as a team, you need to be able to communicate effectively and bounce ideas off them readily. Having said that, it’s best to be organised about communication and plan for meetings, but occasional ad hoc calls shouldn’t be a problem.

9. More than a hobby

Find someone who doesn’t just push their own ‘hobby horse’. It could be that your business issues are not in their area of interest, yet this is what they want to focus on, because it’s what they know best. An all-round focus is vital, as key areas needing attention can be overlooked at high cost, but …

10. Make financial sense

You need someone who understands the impact on all areas of business, especially the financial side. 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.

Once you find the right advisor, you will never want to let them go, because they can help you grow your business from strength to strength. The fees charged should pale into insignificance when compared to the results achieved.

A monthly retainer of $2,000 can work out to be a bargain when compared to the cost of employing such a person, who may command a salary of several hundred thousand dollars. Don’t fall into the high up-front fees trap. Agree on a ‘trial period’ to minimise your risk if they turn out to be no good.

As well as expecting professionalism of an advisor, you should reciprocate as follows:

  1. Schedule set times to meet with your advisor with no interruptions or distractions
  2. Prepare for meetings with notes of what you wish to discuss with them
  3. Perform any agreed actions by the agreed time and provide information required by them
  4. 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 agreed plans
  5. Treat them as part of your team and introduce them to all staff and stakeholders

I can highly recommend working with a trusted advisor, because I do. It can really help you crystallise what’s important in your business. It’s easy to get bogged down with everything you’re responsible for. Someone who comes from the outside, whose perspective isn’t clouded by the day-to-day activities, can help you to see the clear way ahead.

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