The festive season is often a time of reflection for business owners and the prospect of returning to work in January to a repeat of whatever last year brought can trigger all sort of emotion.
But 2017 doesn’t have to be Groundhog Day for you. A favourite quote of mine goes: “The definition of insanity is doing the same thing time and time again but expecting a different result”.
What are you going to do differently in 2017?
I have written previously about the benefits of planning (read here: http://www.procfo.com.au/business-planning/) and I strongly encourage all business owners to take some time to each new year to make some decisions about what they will do to improve their business in the coming year.
There is enormous value for a business owner from working with an external advisor or coach to assist them to improve the business and this can be one of the best decisions you will make in 2017.
Whilst there’s countless professionals who offer this help, sadly there are a lot of charlatans and ‘snake oil’ salesmen amongst them. To help you decide who to work with I’ve listed some guidelines below on how to select the right one for you and some tips on the most effective way of working with them.
They use plain English.
If you can’t communicate effectively with your adviser you will struggle to see results – and it will be a waste of your money. Find someone who can explain things in a way that is easily understood. If you don’t understand something keep asking for clarification until you do.
They get results – quickly!
A good advisor will make tangible improvements in your business that generates multiple times their cost in increased profits. The best advisors will find quick ‘wins’ that improve cash flow early on in the engagement. This extra cash flow can then be used to implement other profit generating ideas that in turn further improve cash flow; the compounding effect of this is significantly higher profits and more cash in your bank account. As a bonus, a more profitable business is that it is also more valuable. For the business owner who sees their business as their superannuation, this is probably the greatest advantage.
They help you to get the work done.
Hire someone with broad experience in actually ‘doing’ the work they are recommending. It is very easy for someone to make recommendations such as ‘collect your accounts receivable more quickly’ or ‘write a business plan’. The best advisors are proactive and will explain exactly how to do this in your industry and then roll their sleeves up and work alongside you to do get it done.
Key Performance Indicators (KPIs)
Monitor your results by tracking appropriate KPIs. You should only work with an advisor who has a track record of success in improving all strategic and operational areas of your business and implementing appropriate KPIs is the best way of measuring improvements.
For more information on what and how to measure KPIs, download this easy to read seven minute guide.
- Look for a good track record. Don’t risk your success on someone who doesn’t have a track record. Formal qualifications may be helpful but nothing beats real world “in the trenches” experience.
Look for an advisor who has a proven track record and testimonials to support it. Ask for references and get confirmation of exactly how they’ve helped previous clients.
They’re also eager to learn from you.
It is not necessary for your advisor to have direct experience in your industry – in fact it can be an advantage if they don’t have any because they may bring insights from other industries that are quite innovative and can give you a competitive advantage. However, they must show willingness to learn about your business and industry to really understand the unique challenges so they can help you to overcome them.
Are they available when you need them?
Whilst it is unreasonable to expect your advisor to be on call for you 24/7, you need to be certain you can reach them if you need to. Your advisor should quickly become the right hand you share and bounce ideas around with.
Your business needs are their priority.
Advisors with a narrow field of expertise have the potential to want to fix ‘problems’ that your business may not have. For example, an advisor with a bias towards sales and marketing may believe increased sales is the answer to all your business problems. The exact opposite can be the case and increased sales could sink your business.
They really ‘get’ numbers
It is crucial to work with an advisor who understand business numbers. Numbers and KPIs are the only way to know whether you are achieving results or wasting your money. A good advisor will insist on having reliable financials every month so they can demonstrate the value they bring.
Even if numbers are a strength of yours there is no harm in seeking a second opinion. We are all subject to a phenomenon known as confirmation bias.
Like finding a good accountant, you will know when you have found the right advisor. They will become a highly-trusted part of your inner circle. The fees they charge will seem like peanuts compared to the value they bring to your business. Paying a monthly retainer of $3,000 is a bargain compared to the cost of employing all that expertise in-house.
The most effective relationship is a two-way street so in return for expecting these things from your advisor, you need to commit too.
- Plan and set times regularly to meet with your advisor without any distractions. The best way to avoid distractions may be to meet before or after normal business hours or away from your business premises altogether.
- Come prepared to meetings with notes and an agenda of what you wish to discuss. You will get far better results from your meetings if you know what you want to get out of them.
- Follow through with action items as agreed. Only commit to what you can – and then deliver! It’s too easy to make excuses for why you can’t/didn’t do something. But understand, it will be far more profitable and personally rewarding if you follow through on what you commit to.
- Treat your advisor like one of your team. Encourage their interaction with everyone in the business.
- Respect their work and pay their invoices on time.
The right advisor has the potential to make your business seriously profitable and by committing to the five things above you will ensure they stay motivated and focused on helping you grow your business.
Being in business for yourself can be very lonely and at times we all get bogged down and lose sight of what is important. A trusted advisor will give you clarity and focus on what truly matters and the encouragement to do it.
I highly recommend working with a trusted advisor/mentor. I do it. It would be hypocritical of me to suggest you do this and not practice what I preach. But that isn’t the reason I have a trusted advisor. The simple fact is it has made a world of difference to my business.
About David Officen
David is the Founder and Managing Director of proCFO.
David combines an accounting and consulting background with commercial experience both as a manager for large commercial businesses and as the owner of private and family businesses.