Business Advisers can make or break your business
Most mid-market business owners go into business because they are really good at something – plumbing, architecture, accounting or cybersecurity – over time the business grows and the skills that worked to grow to this stage no longer work – now you are a people manager, an accountant, an HR expert or dealing with legal disputes, employee claims and superannuation and single touch payroll.
Enter the business adviser – typically the accountant (once the most trusted professional in the world) but often other advisers – business coaches (isn’t everyone), mentors, business growth workshops, digital marketing guru (ie: social media user) – all of these are relevant as the business grows and the worst mistake you can make as a business owner is to think you can DIY your way through all of this when significant expertise and knowledge is required. I am a CPA with a tax agents licence and a Masters degree in Taxation Law – I do not prepare and lodge my own tax returns – it is not my area of expertise (it is also not a good use of my time).
The key thing to ask is what the business advisor is focused on – I have seen business coaches focus on growth and send businesses broke, I have seen marketing experts deliver leads way beyond the business capacity to deliver. No matter what the area of expertise, the business adviser should be focused on a long term strategy to grow the value of the business over time. Not a short term (hot tub effect) ‘everyone feels good for 90 days’ focus but a long term – 10 years – strategy to grow equity value for owners.
We give each CEO a simple mission – Just run your business as if (1) you own 100% of it, (2) it is the only asset in the world that you and your family have or will ever have; and (3) you can’t sell or merge it for at least a century. – Warren Buffett
In his “simple mission”, Buffett argues that companies should abandon short-term thinking and instead focus on the long-term outlook.
“We certainly don’t ignore the current results of our business — in most cases, they are of great importance,” Buffett wrote, “but we never want them to be achieved at the expense of our building ever-greater competitive strengths.”
Ask your adviser – what is your time frame? what value are you focused on delivering? Check previous clients for references – but ask them how long they worked with the adviser and what did their involvement do to the value of the business.
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