When a business is faced with new challenges and opportunities, it may find that the skills are missing in-house to sufficiently complete a project. Business advisors can be invaluable when going through a time of change as they can provide the expertise needed to reach your business goals. However, finding the right advisor for the task can be detrimental to whether the project is successful, so understanding what to look for and how to manage the relationship is critical. The key to a positive advisor experience is planning – if you are not clear on expectations and budgets, nor will the advisor.
It does not matter how experienced you or your team are – it is unrealistic to expect to have all the knowledge, skills and experience your business needs. This can become particularly apparent when your business evolves and grows during its life cycle. When your business is going through a time of change and growth, you will be continually facing new challenges and opportunities. Therefore, bringing in expert advice may be just what you require to make the best choices and have some additional support where needed.
Many businesses miss out on the chance to go to the next level due to a lack of knowledge or understanding. Knowing how best to navigate new opportunities can be tricky. Fear of change and being unprepared can hold some business owners back from achieving their goals. However, it can also be simply down to not recognising a chance for growth when it comes along.
The good news is that business owners do not need to go at it alone. There are many different types and styles of business advisors out there that might be able to help but knowing who and how to choose the best advisor is essential. This guide outlines what different advisors may be able to do for your business, how to find them, and tips on managing the relationship.
WHAT DIFFERENT ADVISORS CAN DO FOR YOUR BUSINESS
There are some kinds of advisors which may be a legal requirement. For example, when there is a need for a contract to be drawn up or company accounts need auditing. There are then some advisors who are brought in to help improve your business performance and bring about some positive change. Different kinds of advisors will offer unique skills using unique methods.
A standard business advisor aims to offer broad-based advice and support to help business owners achieve their goals. Some will function as a sounding board for ideas and give their options while coaching you through the process. In contrast, others will be able to provide more specific skills or services for particular industries or areas of expertise – such as marketing consultants, lawyers and accountants. These consultants will be able to take some of the pressure off your workload by carrying out tasks on your behalf.
Depending on your reason for hiring a business advisor, you may want to consider signing them up for continuing support. This can be achieved through signing up for regular monthly meetings or by having them come onsite to help with a specific project.
It is commonplace for businesses to seek out the support of an advisor when something changes – such as you decide to start trading overseas, upgrading your IT systems or looking to sell your business. Rather than having to take on the additional expense of hiring a new permanent employee, an advisor tends to work on a temporary basis. However, if you require a specific skilled professional and support for a more extended basis, it may be better to invest in recruiting or training a suitable employee.
One of the main attractions of a business advisor is that they can provide the sort of independent guidance and fresh thinking that can be hard for full-time employees to deliver. There are some businesses that look to mentor and non-executive directors to provide this kind of assistance.
DETERMINE WHAT YOU NEED FROM A BUSINESS ADVISOR
The first step to finding the right advisor for your business is to have a clear understanding of what you are trying to achieve. Once you have figured this out, you will have a better idea of the skills and knowledge you will need from the advisor to best help you. There are some cases where you will need an advisor for legal reasons – but apart from this, the choice to bring in an external advisor will start with a problem or new opportunity that your existing team is unable to handle without support.
When deciding what you need from an advisor, it is essential to keep your core team involved. Although your employees may not have the skills to complete the job of an advisor or could be too busy with other work commitments, they will still be able to provide some helpful insight. For example, they understand the factors that need to be considered, like existing systems and constraints, plus their cooperation will be vital for new projects to succeed.
You will need to clearly define what you are trying to achieve, and it can be made much easier when pen is put to paper. Use SMART (specific, measurable, achievable, relevant to your overall business goals and time-limited) to define your objectives. This is also a good time to establish a budget by considering how important the opportunity or problem is, and how it will impact your financial resources.
Your notes can then be used to prepare a brief to hire and manage the right advisor. It is also worth including the following points:
- A description of your business - what it does, its size, structure, and core values
- Your business goals and why you need help to achieve them
- The skills and experience you are looking for
- Any specific goals you expect the advisor to reach and the timeframe for doing so
You may also want to consider including a budget outline in the brief to clarify what the business is prepared to invest towards advisor services and the task at hand. This will allow you to ascertain what can be realistically achieved within the allotted budget. If you are unsure of the costs, you can ask potential advisors what approach they recommend, and their cost estimates.
FIND AND HIRE THE RIGHT ADVISOR
If you have a strong business network, ask your contacts for personal recommendations. It can bring a piece of mind to hiring an advisor when you know a friend or business associate has had a positive experience with them. Your local chamber of commerce or relevant trade associations can also be great sources for recommending suitable advisors.
Whichever route you take to find an advisor, it is essential to check that the individual suits your particular circumstance and business. You will ideally want an advisor who:
- Has an understanding of your industry
- Some experience working with companies of your size
- Is familiar with any particular issues you want to be dealt with
- Holds any necessary qualifications to complete the job
- Is a member of the appropriate professional body or trade association if needed
Once you have compiled information about potential advisors, you can create a shortlist based on what you feel is the most important criteria. It is then time to send them a copy of the brief and set up an initial meeting to discuss it in more detail.
A key component of choosing an advisor will also be going through the brief you created. Ask them to review it and provide feedback. Experienced advisors may have suggestions on how to improve it or point out any areas that have been overlooked.
The questions you will want to consider asking the advisors during the initial meeting include:
- What similar projects have they worked on, and can they provide references?
- How would they recommend approaching your project?
- Who would be needed to do the work (existing employees or subcontractors)?
- How would the advisor fees be calculated, and what would be the estimated overall cost?
Apart from finding out how qualified they are for the job, the first meeting is also a good time to get a better feel for their personality. You will want to try to find an advisor that both you and your employees will be able to get on with. Having someone that is a good personality fit will help the project go much smoother.
Once you have found the advisor you feel is the best person for the job, it is time to formalise the agreement. It is essential that you get everything written down and confirmed in a contract. The contract should contain the following details:
- Objectives and specific deliverables
- Any key milestones and deadlines
- How the relationship between you and the advisor will work
- Who will own any intellectual property created during the contract
- Charges and payment schedules and arrangements
- A confidentiality agreement
- Details of how either party can terminate the agreement
Business advisors typically charge a fixed fee (such as a monthly retainer) or invoice a daily rate. You will want to make sure the agreement clearly specifies any other expenses you will be expected to pay – like the advisor's travel expenses and subscriptions to various online tools. With this being said, expect to be a little flexible with costs. It is not unusual for changes to be made in the agreement as the project progresses.
You may also want to consider adding a clause to the contract regarding communication once the project has come to an end. It can be beneficial to be able to ask quick follow-up questions. If the contract you are drawing up is of substantial size and costs the company a considerable investment, it may be worth seeking legal advice.
MANAGE AND NURTURE THE RELATIONSHIP
Having a clear plan with measurable milestones will make it easier to monitor whether the advisor is delivering as promised and the project is on track. In addition, the agreement with your advisor should include the flexibility to deal with changes in your requirements as the project progresses.
Like any relationship, honesty and communication are key. You and the advisor need to be aware that the relationship is two-way, meaning it will not be solely down to the advisor to make the project a success. For example, you may need to check that employees and other resources are available or be accountable for carrying out specific tasks. So your plan should include details of your commitments and responsibilities to the project.
Being able to communicate openly and honestly can make or break the relationship. You will want to make sure you can both contact one another when needed and hold regular meetings to review progress. Even if you or another trusted individual at the company is taking overall responsibility for the relationship, you will still want to take into account feedback from your other employees as well.
If any problems develop during the relationship, the sooner you can deal with them, the less damage will likely be caused. When left to fester, it can lead to the project going off the rails and relationships turning sour.
When the project has come to an end, you should review how it went and what could be improved in the future. Mistakes will likely have been made at some point, and the end of a project is a great time to reflect and find out how you can learn from them.
If you are in the middle of a project with the advisor, you will want to watch for any signs that show something may be going wrong. For example:
- Is the advisor attempting to convince you to agree to an inflexible agreement?
- Is the advisor hesitant to commit to specific targets and deadlines?
- Is the advice not relevant to your particular circumstances and priorities?
- Are you receiving guidance that is useless and does not benefit the business?
- Is the relationship not producing what you expected, and are deadlines constantly being missed?
- Are you unable to build a trusting relationship with the advisor?
- Is the advisor not letting you know when mistakes have been made?
- Is progress towards the overall objectives being made, or does everything lead to the need for more advice?
- Are your calls not being returned, and is the advisor late for meetings?
- Do you enjoy working with the advisor and look forward to meetings together?
If you or an employee identify any potential problems, you should take action as quickly as possible before it escalates. Begin by identifying the underlying cause and making the advisor aware. For example, the advisor may have been briefed poorly, or your expectations of the work may not have been explained adequately. Next, ask the advisor if anything is getting in the way of them doing their job – such as a lack of cooperation from employees or unrealistic expectations causing them stress.
When possible, you should try to reach an agreement and find a way to remedy the issue. If you are unable to resolve this yourself, the advisor may belong to a professional body that can provide guidance on disputes and how to come to a mutual understanding. There are some instances when problems and relationships can not be resolved, leading to no choice but to bring the contract to an end.
ENDING A RELATIONSHIP WITH AN ADVISOR
Not all contracts are ended due to a relationship turning sour. It could be that a successful project has been completed, so it is the natural end to your relationship with the advisor. Once your advisor has finished their contract, it is an excellent time to review your business objectives and consider whether further advice is required. Having an advisor you know works well and understands your business can be a continued valuable asset.
On the other hand, you should try to not rely on the same advisor just because you have come to depend on them. Think carefully about what you now need and whether the existing advisor is still suitable for the purpose. If you do decide to keep them on a continuing basis, be sure to revise the targets and assessment process to monitor this next phase of your relationship.
As your business grows, it could be the case that you will want to recruit or train employees to replace the need for an advisor. For example, there could be the need for a higher level in-house legal advisor or IT professional. The team may be growing at such a rate you need a personnel manager to help oversee and handle HR tasks.
Whether the advisor contract is being terminated due to the relationship not working out or the project's objectives have now been met, your original agreement should state how the relationship can be concluded.
Business advisors can bring a considerable amount of value, but they are not a one-size-fits-all solution. Their function is not to plug gaps in your employee talent base, so you will still need to elevate your company in core areas. You will want to make sure you have people around you that can provide expertise in human resources, business strategy, compliance and regulations, operations, and financial planning.
If your business is struggling or you are not in a position to accept growth when the opportunity presents itself, an advisor may be able to highlight areas for improvement and provide solutions. Choosing the right advisor for your business is a significant decision and should be taken seriously. Conduct thorough research, take time to plan and make sure a decent agreement is drawn up and signed.
FREQUENTLY ASKED QUESTIONS (FAQS)
How do you get a business advisor? There are many ways to hire a business advisor but finding the right one for your business can take a bit of time. The first place to start is to reach out to your business network to find out if any of your contacts have someone they could recommend. If that does not work out, try contacting your local chamber of commerce for a list of possible applicants. It is possible to run a quick internet search, but many people are trying to make it as an advisor, and they may not have the experience required to deliver what your business needs.
What results can you expect from working with an advisor? The results you will see from your advisor will vary depending on the task at hand. If you have listed measurable objectives with clear targets and a timetable for your advisor to achieve, results should be relatively easy to measure. For some level of assurance, you can ask the advisor to provide reference and contact details for you to reach out and discuss how their past clients found success in hiring the individual.
How do business advisors get paid? The way a business advisor is paid will be down to preference and the terms of the agreement. Either way, they tend to charge a daily or monthly set rate. Some advisors may approve to be reimbursed via a commission or shares. The commission and share route will be more popular for advisors working with start-up companies that are still in their infancy.
Are business advisors collaborative? A good business advisor should be collaborative as you do not want someone to work in isolation and take the project in a direction that steers away from your vision. You will want to set up touch points so that communication stays open and you are informed of any progress or delays. Existing employees can also provide some insight that the advisor may not be aware of, so they should be open to comments and feedback from everyone in the organisation.
Why is a letter of confidentiality needed when hiring an advisor? A business advisor is not your employee, which means they will likely work with other clients. There is no guarantee they are not currently or will work with one of your competitors. Having a letter of confidentiality will help protect your business. It could be a real setback if crucial information is leaked as you want to do everything possible to stay ahead of the competition.