Are you getting good advice? (Part 2)

Posted by Laddie Blaskowski on Mar 21, 2007

Last time, we discussed characteristics that you should look for when choosing advisors. In this article, we’re going to discuss how to find these types of people.

Again, we’re not talking about friends you turn to for advice. Business advisors are a different group entirely and should actually be qualified to advise you concerning your business. A friend can be a good business advisor, so long as he or she is qualified to fill that roll.

First of all, it’s important to choose advisors who are not just like you. Also, be careful that the people you choose do not all come from the same industry or have similar backgrounds. Diversity is important here.

Choose your advisors carefully!

Here are types of people to choose:

• Your accountant. Accountants are necessary and important, and yours should not only be interested in your numbers and tax returns, but also in helping you to succeed. This person should regularly be suggesting new ideas and ways to improve your business.

• Your attorney. Any attorney can explain legal matters to you. A really good one will have a broad base of experience concerning other businesses that he or she can share with you. He or she should also take a proactive approach to your business by alerting you to potential problems, rather than just waiting around to deal with them as they occur.

• Other business owners in your industry. So long as you are not in competition with one another, someone else in the same industry can be a hugely valuable source of advice. Some industry associations promote having support groups for business owners and if one doesn’t exist in your area, you might consider starting one. You can learn a lot from someone else’s experiences and mistakes.

• Business owners in different industries. Even if someone doesn’t fully understand your particular industry, they can still be a valuable advisor. Many practices can be transferred from one industry to the next—with fantastic results.

• Consultants. The very least you should expect from a consultant is specific technical knowledge. However, an experienced consultant should have a wealth of other information to offer you as well. Because of the variety of situations I’ve seen, my clients frequently turn to me for advice outside the scope of the work I was originally hired to do.

• Board of directors. Although many small businesses have family boards, a board comprised instead of individuals outside your business can provide a unique source of counsel. Outside boards are close enough to your business to know what you do, but not so close that they will have emotional involvement. Studies have shown that businesses with outside boards outperform those that don’t.

A solid group of qualified advisors can help you avoid mistakes, keep on track, and provide a sounding board when decisions need to be made. If you haven’t already surrounded yourself with a good group of advisors, now is the time to do it.