5 Things to Expect from Your Business Advisor
There used to be a TV ad with a pumpkin farmer leaning on his Ute talking with his business advisor. Picture the farmer in scruffy clothes and dirty boots, and the advisor dressed up in a smart suit. The farmer says, “I don’t know what I’m doing wrong. It costs me $1 to grow each of these pumpkins. I take them to market in the Ute and sell them for $1 each. Even though there’s no middle-man, I just don’t seem to be making any money.”
The advisor ponders. Eventually he comes up with a suggestion. “Maybe you need a bigger Ute.”
I loved that ad. At the time it was running on TV, I was working for one of the big accounting firms as a business analyst. It’s always tickled my fancy.
What was the advisor doing wrong (apart from calling himself an advisor and wearing a suit to visit a farmer - duh!!).
Here are Five Things to Expect from Your Business Advisor
1. You want an impact player, not someone on the side-line
It’s easy for anyone to wax eloquent about what you should be doing. You see that performance when watching kids play their weekend sport. There’s always one parent on the side-line who cannot resist giving loud and persistent advice to the ref and the players. You want someone who will come in and work on site with you, and not simply give you heaps of work to do then disappear ‘until next time’. You’re already busy enough!
2. They have to listen and ask questions more than they talk
There’s a whole species of people who are genetically wired to think they know all the answers. (My wife says they’re called men!) Seriously, advisors have to ask pertinent questions before they suggest any solution. I was in a meeting with a director and their trusted advisor discussing a bottle-neck around invoicing. What’s crucial here is the number of invoices and the team of people involved in getting each invoice done and emailed. Clearly 400 invoices for $1,000 each will take a lot longer to process, review and approve than 4 invoices at $100,000 each. But the advisor wasted time, fixated on tracking targets and invoices being GST inclusive or not. I guess that was his thing. At best his interests were incidental to the topic. Don’t be afraid to tell ‘the expert’ they don’t know what they’re talking about if it’s clear that they don’t.
3. They have to demonstrate they know your business
It’d take anyone months to understand the nitty-gritty of how your business works. As with the example of an invoicing bottle-neck above, whilst all businesses are essentially the same, and tracking targets and GST is important, in each case, the devil’s in the detail. Test your advisor. Without being silly, deliberately throw in issues that are important to your business. If they’re not understood nor pursued by your advisor then don’t pursue them. Say bye-bye!
4. They shouldn’t keep returning the conversation to a promo for a product
It’s fair enough that people are trained in and use methodologies and software as their tools of trade. But if the tools themselves are the product the advisor is selling, then they’re not there to help you. They’re there to help themselves; to your money. You’re looking to buy expertise and assistance to make your business better. No tool will deliver that. It’s how you use them that makes the difference. Don’t buy new tools unless the advisor shows you how to gain some improvements with the ones you’ve got.
5. If they’re as good as they say, ask them to work for you on a contingency basis
I receive a constant stream of emails and phone calls from people wanting to take my money. Some are from people wanting employment and others are from consultants promising me increased sales, easier marketing, or faster debtor recovery. It’s easy to promise things hoping to gain some followers. Like promises of returns they’ll never have to deliver on made by religious zealots, consultants and advisors will apply their own GST principle (grab snatch and take) to woo you into thinking they know what you need and what will make you happy. You know what debtor recoveries you’re achieving right now. You have a history of marketing and sales results. Offer the advisors a percentage of revenue and profit improvements from a base of what you’re currently achieving. See how they respond. If they’re good at what they say they can do, they should be prepared to consider a significant contingency component in their fee. If they don’t have faith in themselves, you shouldn’t believe in them either.
How do your advisors measure up?
Ed is the CEO and Founder of Abtrac. He’s passionate about helping professional service businesses streamline their processes and achieve a stronger bottom line.