The last piece of the puzzle: Gather a team of advisers
When it comes to advice, Americans would much
rather give than receive.
Little wonder that most small business owners tend
to set sail alone and end up going down with the ship.
Leon Danco, who has spent most of his 76 years trying
to improve our odds of success, agrees with Pogo's Walt Kelly: Where
advice is concerned, we have met the enemy and he is us.
"The business owner feels it's nonheroic, unmasculine
and unAmerican to ask for advice," says Danco. "He prides himself
on being a very private person. He is unwilling to be reviewed by
anybody. He only wants corroboration. Lack of review, great secrecy
and an unwillingness to seek advice makes him the hardest guy in
the world to give advice to."
The gospel of seeking advice
Thirty years ago, Danco wrote Beyond
Survival: A Guide for the Business Owner and His Family, which
preached the gospel of seeking out and taking good business advice
("At the time, I was considered a heretic," he chuckles). In it,
Danco came up with 22 words, each beginning with "co," to help owners
home in on the kind of advisers they need. These qualities include:
- Competence: Put simply, your advisers
must know more than you do to be of any value to your company.
- Collaboration: Good advisers work
well with you and your advisory team.
- Confidence: If you lack confidence
in your adviser, show that person the door. You want advice that
you don't need to second-guess.
- Conviction: You want advisers who
shoot straight with you, not yes-men concerned with their billable
- Compassion: Because your business
carries great emotional weight for you, seek advisers who can
relate to you on a human level, not just a business level.
In a perfect world, we would each
have our own Obi-Wan
Kenobi to guide our business. Instead, we tend to settle for
much less, according to Craig Aronoff, co-author of How To Choose
and Use Advisers.
"Go for really good people," he
says. "What we find is that family and small businesses often underestimate
the types of people they can attract as advisers and they really
don't work hard enough to find good, experienced people who can
advise them. Too often they just use their own little 'old boy'
network -- they hire a buddy from high school or college."
You get what you pay for
Aronoff admits that finding the best advisers and being able to
afford them can be two different things, but warns this is no time
"While it appears expensive up
front, it's really kind of an inexpensive investment if it works
out. Getting past the hourly fees is sometimes daunting. Sometimes
smaller business owners will take what seems like the less expensive
way out, which is somebody who will work on commission, or take
their fee out of whatever product you're trying to sell, or somebody
who might ask for a piece of the business instead of cash. All of
those are typically much more expensive than paying for your advisory
services by the hour."
Danco heartily agrees: "Paying
for advice other than in cash is a mistake. The price you pay for
advice is not what you pay upfront when you get it, it's what you
pay when you take it."
If it's any consolation as you're
writing out the check, most advice is tax-deductible.
Ironically, some of the best advice may be free.
Both authors tout the virtues of establishing a board
of directors early on to help steer your company. It might consist
of three or four owners or principals who have taken their own companies
where you want yours to go. They likely had mentors and won't mind
Danco has helped form nearly 400
boards in his career and "there's not one of them that has not been
a joy to the owners." Still, he admits that the average business
owner still balks at the idea.
"That's a tough sell. The owner
says, 'What do they know about it? Why should I tell them my secrets?'
It's an invasion of his last sanctuary. You put competent people
armed with the facts in the middle of his business, it's like seeing
the physician who says, 'Take your clothes off, we'll have a look.'
The poor guy is defenseless. It's just against his nature."
Aronoff says the sooner you can
form a board, the better. "Having a team of three or four folks
who have been there, done that, will really pay off if you do it
from the start."
is a freelance writer based in Florida.
Posted: Dec. 17, 1999