By Sarma M. Taylor
Would you trust a cardiologist to handle a problem with your feet? Would you go to a sports car mechanic to repair a bus? Why would you hire a corporation vice president to evaluate a small business? One of the greatest problems that we experience as business advisors is that everyone involved in any type of business believes they can diagnose and repair a small business. Motivational speakers are not business advisors. While they may be inspirational and help promote a segment of your business, they do not offer all the core fundamentals needed to guide a small business. These fallacies are at the heart of why small business owners often retain the wrong person to help them work through their issues. Small business is a beast of its own. It requires dynamic individuals experienced with small business that will enable entrepreneurs to maneuver and follow appropriate avenues that lead to success. Like the construction of a building, it is the foundation of a small business that is so vital to find its place in a very competitive market. Of course, this begins with the entrepreneur, who must always be seeking to learn as much as he or she is able in order to gather the ammunition for forthcoming battles that are sure to be experienced.
Too many small business owners attempt to find the answers to questions that they may already know by going to perceived specialists who have many years of success in their respective areas of expertise. However, a corporate vice president of marketing who has little understanding of the fiscal restraints and issues of small business could lead the entrepreneur to a path of failure. This applies to anyone who lacks personal experience in small business. In business school, they teach you that you should never let your attorney or accountant make business decisions for you, as it is the entrepreneur who has a firm grasp of the issues of their business.
My personal experience is that most businesses have insufficient experience and understanding of their own financials. The financial statements, as most successful business owners know, carve the roadmap to success. Therefore, a good business advisor should have a solid understanding of how every activity in the business translates into dollars and cents. Without that ability, there is little chance that a small business would be able to accurately identify its future projections. Small business owners should be careful when they are offered “free” business advice that may involve very experienced individuals that lack the important fundamental criteria of understanding financials. The old adage “you get what you pay for” can also apply to business advising.
Making sure that the foundation of hiring a business advisor is understood, the small business owner should seek the type of individual that will not dictate strategies and action items, but rather draw them out from the entrepreneur. In my experience is most business owners have the ideas and thoughts within them, but need assistance in expanding and refining these strategies. A skilled advisor will help the entrepreneur identify their critical financial metrics and ratios. These financial cornerstones will assist in stabilizing the growth of the company.
Key qualities of a good business advisor must include being a good listener, an empathetic individual who is quick to understand the general concepts of all business. The relationship between a business advisor and the business owner must be cordial and respectful of each other’s contribution to the strategy.
No matter how good a business advisor is, without good communication skills, the small business owner will not be able to adequately absorb the guidance and recommendations.
A simple checklist to use in selecting a business advisor
- Small business ownership experience
- Understanding of financial principles
- Empowers the entrepreneur’s own philosophy
- Communicates effectively and well thought out strategies
By retaining a well-qualified and experienced business advisor, the small business owner significantly increases the potential to reach the dreams and goals they set for themselves when they originally launched their company.
Sarma M. Taylor is a graduate of Boston University, a former vice president of MFS Investment Management, Owner of Santa Fe Music & Piano, Managing Partner of Franchise Innovators International and currently Lead Business Advisor for the Goldman-Sachs 10,000 Small Businesses Initiative in Houston.
