Many businesses fail every year due to poor management and simply not picking up on the problems quickly enough. Business advisors can be brought in to support those overworked entrepreneurs and help them reach their professional goals. These experts could be the difference between a thriving business and a failing one on the brink of closure. They have the knowledge and expertise to identify the areas which need improvement and advise on the appropriate steps to fix them.
Business advisors specialise in the core aspects of business, including marketing, finance, compliance, human resources and even the day to day management of your company. Knowing which consultant is the best fit for your company can take a bit of time, but with some thorough research and time spent talking, you could have someone by your side to take your company to the next level.
Business owners are often faced with trying to be the expert in everything. There is a lot to contend with – from business planning, financial projections, employee management, and customer acquisitions. Trying to go at it alone can lead to wasted time, costly mistakes and complete burnout. However, there is help at hand, and these specialists call themselves business advisors.
Business advisors play a vital role in providing entrepreneurs with well-informed suggestions for achieving their goals and increasing their chances of success. Whether a company is just starting off, embarking on a new project, or going through a period of growth, businesses can rely on advisors to support them by boosting efficiency and acquiring a greater degree of success.
The services of a business advisor are essential to many businesses, but some are unaware of their necessity. This article explains the core functions of a business advisor and aims to provide insights into whether your business should be looking to hire one.
WHAT IS A BUSINESS ADVISOR?
There are more specialist advisors than anyone could ever imagine in business. You have legal consultants, financial advisors, business planners, marketing officers, etc. While all these specialists have their place, not every company will need the same ones or all the time. A business advisor is a strategist who can do a bit of everything. Consider them as an extension of yourself – they are capable of providing their expertise where needed and can spend time researching the areas where there is the greatest business need.
A talented business advisor will have a huge amount of knowledge relating to various aspects of a business. They will use their experience and knowledge to help guide your company and help with making suitable suggestions.
Some of their key functions include:
- Performing a thorough analysis of your business and supplying fresh ideas and recommendations for appropriate areas, such as marketing, business development, product management, financing, restructuring and management.
- Able to identify future problems that your company and industry may face, help mitigate the risk and offer appropriate solutions.
- Capable of discovering profitable opportunities for companies that they had no awareness of and building a strong network of professional partners.
- Galvanise business owners into planning for the long-term and offer the best economic strategy to stimulate growth.
Without a business advisor, many companies would find themselves being left behind by the competition. Entrepreneurs are bound to make ill-informed decisions at some point in their business journey and miss out on opportunities that would have benefited their company's future. This is why entrepreneurs need to understand what a business advisor can do to support their goals and vision for their business.
THE DIFFERENT TYPES OF BUSINESS ADVISOR SERVICES
The variety of services a business advisor can provide is vast, and understanding them will help determine whether they are needed. One of the best things about hiring an advisor is they can either be internal and work solely for your business or external to provide services only when needed. Below is an explanation of what is involved in these two hiring formats:
1. Internal Business Advisors – As it says on the tin, this type of business advisor will work within your business and is paid a stable monthly salary like any other standard employee. Therefore, internal business advisors are preferable to external business advisors by business owners looking for a professional to work for them over long periods. They will accumulate massive amounts of information about the business over this time and will strengthen their ability to make accurate and trustworthy judgments. Moreover, having an internal business advisor means any department within the company will be able to tap into their expertise – which will ultimately be helpful to the organisation as a whole.
2. External Business advisors – For start-ups and small businesses, external business advisors would likely be the better option as they cost less to hire. These advisors are temporarily employed or work on a freelance consultation basis. They can be hired from external agencies and temporarily employed to offer their expertise for a set fee. The majority of external business advisors will have multiple clients at once, making their schedules a little busier than internal advisors. However, their experience working with various businesses will make them highly experienced and valuable to your company as they can apply their knowledge from past experiences.
Business advisors have a rounded understanding of all major business functions. It is probably not a bright idea to try and use them to make up for missing employee skills, but they may be able to identify the gaps before any significant issues arise. Here are some of the core services a business consultant can provide:
- Management – One of the leading services a business advisor provides in strengthening and reshaping the management of companies. Their input can improve the efficiency of business systems and processes, leading to the maximisation of your company's outputs. Throughout the management review, communication within your organisation will likely improve – along with the day to day running of your businesses being taken to the next level. This can result in increased coordination to drive your business plan forward due to the commoner shared goal between everyone at your company.
- Accounting – Business advisors play a central role in your accounting functions to ensure that capital is spent responsibly. This particular area of service makes sure that all economic activities of your company are being recorded and distributed as needed – such as to relevant stakeholders. It will also enable you to recognise which areas of the business need to be invested in and allow the company to allocate its resources evenly. Together with the business advisor, you can work towards improving specific areas of your business.
- Compliance – If compliance is not being followed, it can create legal problems for businesses and even lead to closure. This is one of the primary reasons it is important to have a business advisor who can provide you with relevant expert advice about avoiding such situations. Understanding and following the rule book will help with the smooth running of your businesses and prevent fines and sanctions. It is the advisor's job to secure your organisation from interference with future legal issues.
- Human Resources – Managing staff and looking after their welfare is complex. As an employer, you are responsible for ensuring a safe, happy working environment. A business advisor can assist with core HR functions like recruitment, training, handbooks and company culture. Their input can help create a place where employees will want to stay for the long term and build a sense of loyalty. In addition, the advisor can offer suggestions for the types of employee benefits the company can provide to help retain and attract top talent.
- Marketing – One of the essential services that will guarantee the growth of any business is proper marketing. Business advisors can show you the ways you can strengthen your relationships with customers and partners through an exchange process. Understanding how to put your customers' needs first and understanding what they want will help you develop a more substantial customer base. The advisor will conduct thorough marketing research to find the best method of selling your products or services and which demographic you should target. This will place you at a competitive advantage over other companies in the same industry.
- Finance – After a business advisor has the complete financial picture by studying the business' capital flow, they can advise on the allocation of future investments. The suggestions can help you distribute your assets appropriately – vital for your financial management. The task of investing should then be easy for you as you will better understand what you should be investing your money into. Subsequently, your business will grow in a healthy way and maintain long term success with minimised debt levels.
TOP TIPS FOR HIRING A BUSINESS ADVISOR
As seen above, there are several solid arguments for hiring a business advisor. If you decide to give one of them a go, you must try to find the right one for your business. Some will be stronger than others, and not all will share your values or business vision.
Here are a few tips to help you find your perfect business advisor:
Look for an advisor who has managed a similar business
All businesses are different, from small local companies to large international corporations. You will want to find a business advisor who understands your industry's unique challenges – recruiting and retaining employees, managing product marketing, keeping up with technology, and securing capital funding. Additionally, target an advisor with proven success with your biggest business challenges. For example, you may work in an industry with compliance issues or require improved distribution channels.
Ask for their credentials
Business advisors tend not to need any special credentials. For example, they do not require a licence or even a degree to give their option on how to run your business – but it does not hurt to ask if they have any credentials. Be mindful that anyone can set up a company as a business advisor, so you may want to look for someone with a business degree or MBA. Some consultants also have coaching credentials or belong to professional bodies, which help solidify why they make a good business advisor. Knowing the business advisor has appropriate credentials can help bring added peace of mind that you will get helpful advice.
Select an advisor who focuses on your niche
Choosing an advisor who specialises in your industry will mean that they speak your language, understand your business concerns, and are more likely to know the problems you face. If you are really lucky, they may even come with some valuable industry contacts too. There are some businesses with specific niches and no available business advisors to support, so at least look for one that shares your principles and fits your company ethos.
Check out available organisations
Hiring a business advisor can feel like a bit of a risk, and there is no need to go at it alone. There are a lot of terrific organisations out there that offer business advisory services or can help you find an advisor. For example, the Chamber of Commerce or Federation of Small Businesses may be able to provide some help with planning as well as other essential advice.
Post an online job listing
If you are feeling confident about being able to select the best candidate for your business, you can always post a job ad for a business advisor. Online job listings can give you mixed results and take a bit longer to find the right person than some other options, but they give you complete control over the process. Just be sure that the job listing clearly specifies what type of business you run and the kind of experience you are looking for. If you do not find the person you are looking for, it will likely end up being lost time rather than a massive sum of money.
Ask for referrals
Perhaps one of the safest ways to find a suitable advisor for your business is to tap into your professional network. Your mentors, business contacts, and even members of your social network may be able to recommend someone. However highly praised the advisor may be, it is still vital that you are specific about what you are looking for and do some research into any you potentially hire.
HOW TO GET THE MOST OUT OF A BUSINESS ADVISOR
When you finally find the business advisor you want to hire, success will follow by simply leaving them to do their thing. Their success will be partially dependent on your input and support. Here are some steps you can take to set you and your business advisor on a path to a strong partnership:
- Talk in-depth about your industry before hiring – Anyone can claim to know your industry, but if they do not truly understand it, you will both run into difficulties. To avoid this situation, spend some time discussing your industry at length before taking them on as an advisor. This will allow you to check that they understand the ins and outs of your niche. A professional that truly gets your business will be able to offer first hand advice and provide industry insights.
- Set boundaries – A business advisor will only get as hands-on or off as you want them to, so set boundaries early on. Make it clear from the first day how involved they will be in the day to day operations and which areas you would like them to focus on. For example, would you like them to be helping with practical financial planning, or would you want them to focus on an overall business strategy? Be very clear on your instructions and set strong boundaries.
- Involve them in your business plan – Depending on where you are on your business journey, your business plan may still be in development, or it could be collecting dust on a shelf in the office. Either way, have your business advisor complete a full review of your business plan to check that something has not been overlooked. The advisor will bring a fresh perspective and be able to identify any underlying problems.
- Set goals – It will be challenging to measure your business advisor's impact on the company if they do not have any goals. Try to think about the milestones or goals you want the advisor to reach before hiring them. This is a great way to monitor their influence and check that you are not wasting your money. You want to have someone that is actually moving your business in the direction you want it to go.
- Make it a team resource – Your employees can provide a unique perspective on your business, which can benefit the advisor in getting a clearer picture of your business. Give both your team and the advisor access to one another and allow your employees to speak freely. It will help the business advisor make more educated decisions and come up with some fresh ideas that could help your company in an unexpected way.
While a business advisor can help you grow and strengthen your business, they can also look after some stressful items on your plate. As a creator of a company, there will be some areas which will require your attention alone. With the support of a trusted advisor having your back, you will be able to spend more time on the areas that matter most to you and require your vision.
Whether you choose to run your business alone or with the help of a team, business advisors can provide insights that could push it to the next level and even save it from failure. If you are yet to be in a position to hire an advisor, reach out to the many free online support resources out there.
FREQUENTLY ASKED QUESTIONS (FAQS)
How much does a business advisor cost? Different business advisors charge different amounts. Their rates will likely be based on experience and their credentials. However, hiring the one with the longest experience or highest credentials is not always the best route. Instead, you may want to check that there are measurable proven results to back up their experience. You never know, it could be a new consultant on the market that brings the most remarkable outcomes and results to your business.
What is the difference between an advisor and a consultant? Both advisors and consultants indeed provide expert advice to businesses, but they have different objectives. A major difference between the two is their approach to tackling a problem. For example, an advisor will aim to spot or define the problem, while a consultant will strive to create a specific solution to the problem. Additionally, advisors tend to stay with companies long term and advise on a broad range of issues, while a consultant will typically come in, sort out the problem and then leave.
Do all entrepreneurs need a business advisor? Not all entrepreneurs will need or want a business advisor. However, small businesses usually fail due to poor management. It is the role of an advisor to improve the quality of management through their advice and help the company succeed. Therefore, by hiring a talented business advisor, a company will have the advantage of specialist knowledge and expertise, giving the company the foundations to thrive.
What makes a good business advisor? A talented business advisor will have some core attributes which will help them be good at their job. They will need to be diplomatic, show empathy, and be sympathetic to the business owner's feelings while being honest about their advice. An advisor should not be scared to speak their mind as they have been brought in to do a job and should only have the company's best interest.
Are there alternatives to a business advisor? Business advisors are skilled professionals. Unfortunately for those that are not yet in a position to hire one, there is currently no app or software that can substitute the insights and advice they can provide. However, there are many online resources and free small business support groups which can help those a little tight on funds to get their business going. If a company is aware of the problems but needs someone with the right skill set to sort it out, they may prefer to contract a consultant to fix the issue as it is not a long term investment and will get them over the hump.