What are the benefits of hiring a small business advisor?
How a small business advisor help me to grow my business? How do I find a result oriented advisor? Do they charge upfront fee?
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Feb 6, 2014
I would look up the nearest SCORE group versus hiring a small business advisor first. SCORE is a group of successful Business Executives that volunteer their services to small business start-ups.
The other possibility is use the local university small business management department and see what they can provide.
Feb 6, 2014
I agree with John about Robert's suggestion on contacting SCORE in your area. I used them 10 years ago when trying to determine whether to keep my business open, and moving in the same direction.
The benefits of having an experienced advisor/consultant are enormous, especially if you are a sole owner as I am. As Monika says, outside perspective is a key to success. Just having someone to bounce ideas off of is crucial.
I also agree with John about a pay per hour advisors vs. a "Shark Tank" approach. It's your business. You need ideas & advice, but in the end you have to make your own decisions. LinkedIn would be my first place to look for a consultant in your area. Review their websites... who knows, you might find free answers without paying a dime. Good Luck!
Feb 6, 2014
Note when I say "they" I often mean "me" here...
1) They know more than you. Golden rule: you don't know what you don't know. [so how can you know you need to learn it?]
2) They've got more experience than you. You can learn from their failures instead of paying for the failures yourself
3) they're often well-connected
4) they'll offer lots of constructive criticism, which is especially important if your surrounded by overly-positive people
5) They'll keep you motivated when times are tough
6) they'll more likely be able to help you identify when to pivot and show you how
THEY WILL NOT save your business, or steer you clear of a wall you're hell-bent on running into. They advise, they don't direct - big difference.
As for fees: it all depends. Personally, I've done it all. I've taken equity, I've done volunteer, and I've invoiced them. Payment structure is really personalized from one consultant to another. If you want more info, message me.
Feb 6, 2014
The benefits depend on your needs and the stills of the advisor.
Insignificant problem + expensive advisor = low value
Big problem + expensive advisor = potential for higher value
You and your issue are the main determinant of value.
Then the advisor needs to really contribute to justify the investment.
I find the trick is in finding a real advisor, rather than someone who's just looking to complete some cookie cutter task. A real advisor will dig into your situation and help you determine what you need, rather than pitching you on some cookie cutter task.
Feb 6, 2014
Robert gave you solid advice unless you have a specific area you need assistance in. If you need that I would try to find others in the same industry on Linkedin and try to pick their brain a bit.
If all that does not work then a local adviser might be the answer. In most cases they will charge by the hour. It is hard to find someone to work of revenue or profits because they will not have a say in day to day operations. Besides why give up revenues when you could get the advice in a few hours.
Best of luck
Feb 6, 2014
Outside perspective! It's key to success. We all love our business like our children, but only if you have an outside perspective will you be able to determine the potential.
Feb 6, 2014
Again I agree with Robert, you will get very little more other than time and a big bill than if you speak to local auth or SCORE. Both are really good also talk to the bank and see what they can provide regarding support.
Other alternative is look at a general business consultant the will be able to apply focus, direction and structure if that is what you need at this point if not keep your money in the bank.
Feb 6, 2014
Hi Tony
When it comes to consulting which I myself do for marketing and sales, you need to ask a lot of questions. Often we can't just post who we work with on our websites. But if you ask 'Can you show me work you did for a business like mine and how that went' is a good start.
As for costs and terms. Costing more doesn't always mean better results. There are a lot of hucksters out there. But a solid consultant will require certain fees upfront depending on the work. It is is piece work like 'help create a business plan'. Typical terms are half up front half upon delivery.
If it is on going work usually there is a deposit, a minimum time length, and they bill to start the month and you have 30 days to pay from there'.
I have done business on trust before and been screwed before. A good consultant will be fairly rigid on terms.
Feb 6, 2014
Hi Tony. if you get the right advisor and if there is chemistry he results could be immense. They can save you time and money. You gain leverage and a good one will put you miles ahead had you gone it alone. A good one helps you unpick and unpack where you are and helps guide you in the right direction. and no im not referring to a mentor but a business advisor. There are many growth strategies but a good advisor will understand you and your business but still knows you make the final decisions. As for pay i agree with Howie. All the best
Remi.
Feb 6, 2014
Tony, when looking for an advisor it is important that you develop a series of questions to ask so you can validate their experience and success with assisting other companies and what success criteria will be used to measure success.
Payment can vary and you should be able to drive a fee structure that is a win for you and the advisor. You are looking for a strategic partner not a "vendor".
Feb 6, 2014
Depends what you mean by "grow your business". If you mean "manage cost structures and help build financials for the loan officer at the bank" then any decent small biz accountant will do. If you mean "perform the growth activity called Business Development" that is a completely different kettle of fish.
If by "results oriented" you mean accountable for revenue growth of $xx or xx% then you will may have to consider a non-voting equity slice along with some cash, especially if you are very small and cannot afford a retainer of some sort.
There are lots of ways of approaching a "growth advisor" but you need to understand your industry's metabolism and sales cycle first. I hope this helps.
Feb 6, 2014
I see two main reasons to hire a small business ad visor, the first is to find an advisor that has skills to round out or compliment yours. This will give you insight to areas that you may not have enough experience with. The second main purpose is to leverage their experiences to validate your business strategy, it is nice to have someone to bounce ideas and plans. Before you do hire an advisor you have to ask yourself are you willing to take input and advice, if not then don't bother you will just waste their time and yours.
Feb 6, 2014
An advisor for a small business is typically good for one of two reasons: 1. To bring knowledge of target customer/client prospects, or 2. To give guidance/coaching on effective business processes, such as team leadership, sales or planning, etc. To find a results oriented advisor check their testimonials, case studies and references. When you talk to a potential advisor listen for good questions rather than sales pitches. If they prescribe a plan before they really know your situation they are not likely to be results oriented. Fee payment terms are typically negotiable.
Feb 6, 2014
Experience. That's it, that's all. Of course, it helps to have any separate set of eyes and a wholly different perspective. I charge a retainer others don't. If the capital objective is clearly defined you can do a percentage of revenues generated, capital raised or some combination. 'Results-oriented'? Well, we all talk a good game. I've been a second adviser and even batted clean-up. This is where your research and instincts come in - you decide.
Feb 6, 2014
This is what I do for a living. I tell you what you need to hear rather than what you want to hear. There is a big difference. By not being emotionally or financially involved in your business, I am very objective and see things that those more closely attached to you or to the business may not see.
As mentioned earlier, SCORE might help, but I do not recommend an academic solution as many in the academic community have never run a business and cannot give you a real world view.
Feb 6, 2014
I tend to define the role as a business mentor. A mentor does not advise nor tell as that takes away the learning. I have always benefitted and created contribution by transferring the knowledge so that the person receiving the information can apply it across a lifetime.
So by going to a "Small Business" mentor, I see some advantages, where you can:
a - Seek testimonials and references and check them out (phone, email, meeting if local).
b - Set terms and conditions such as advance and final payment.
c - Engage in a pilot effort and then increase the scale of economy.
d - Have a direct link to interact and develop an acceptable mental chemistry.
e - More flexible terms and conditions on payment. If you want a break and they know you came through some references, you might even get away with a delayed payment without exploitation of their time and knowledge.
f - Your testimonial of their work when project is completed or milestones successfully accomplished is vital to them and so it is more than likely much more than the fees you pay to them. They wish to get a good result and a nice testimonial.
g - In some situations, if you bring customers to them, you are likely to get a break in pricing.
Good luck with this effort of yours.
Feb 6, 2014
If possible, try to find a business advisor in your area who has had experience in your type of industry. Usually an advisor works on a fee basis with a retainer up front. It is important to find someone who listens well and provides feedback based on your input and need before giving advice. There is never a cookie cutter solution. The results can't be guaranteed because the advisor is not running your business, but an objective opinion and a roadmap for growth can help put you on the right track. The benefit is a fresh set of eyes analyzing your business.
Feb 6, 2014
Using a business advisor can provide several benefits which include:
1- Provides you with an objective person to provide you feedback on many specific topics regarding your business
2- Help you avoid the pitfalls of running small business. They've been there!
3- Act as an Accountability Partner to keep you focused on the business.
4- Help you work 'ON' the business and not 'IN' it. This is one of the most common traps business owners who fail, fall into.
5- Providing you advice, guidance and mentoring that will give you the confidence that you are moving in the right direction.
6- A business advisor typically knows who in your local market can provide you the best websites, CPA/Bookkeeping services, business insurances or marketing materials and most other vendors that you'll need to help you grow your business.
I would contact 3-4 local business advisors and interview them to find out how they think they can help you. Be sure they can clearly express the outcome they would provide you whether they work with you on a Project-Based relationship or a long term growth and business development relationship.
Wishing You the Best....
This person must be someone you feel comfortable with and you believe you can trust as a confidant.
Require that they sign a Non-Disclosure Agreement. I've seen so many advisors take someone's ideas, products and services and use them to further their own business or even create a competing business.
Feb 6, 2014
Tony,
That is a great question. It really depends on what you are looking for in a small business advisor. I would suggest before you being your search, consider what your objectives are for your business, what is the "ideal situation" you are striving for and then interview them, just like you would a new hire.
Ask for referral letters for similar businesses and make sure you CONTACT those referrals to see what working with the business advisor will be like.
Finally, try to tie your payments to the success of your business. If they are as good as they say you are and believe in your business than they should be willing to commit to their compensation to that objective.
Feb 6, 2014
I also looked up the nearest SCORE group in Phoenix and did not hire an advisor since my budget did not allow for one when I first started. They can help you set up a business plan and outline a budget. They are executives who have had vast experience and are willing to help out start-up businesses. I found their perspective invaluable.
I will look for it. Thanks Robert.