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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."

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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 hours.
  • 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 to scrimp.

"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.

Something for nothing
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 being yours.

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."

Jay MacDonald is a freelance writer based in Florida.

-- Posted: Dec. 17, 1999

 

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