Consultant, advisor, mentor or licensed professional? Which is right?
It’s a question that can be daunting for any entrepreneur in search of advice.
My answer, as a certified business advisor with the Washington Small Business Development Center would be, “At different times, all of the above, and more!”
This is based on my experience from over 10 years as a business advisor, having worked with over 1,000 clients. See our website, www.wsbdc.org, to arrange a no cost, confidential appointment with an advisor.
- Consultant — an industry or business expert who studies or analyzes your situation, process or environment and provides an authoritative report, usually for a fee.
- Advisor — a one time or ongoing engagement with a person who has experience and skills in the business world, and access to data, research and other professionals to help you generate alternatives, solve problems and manage your business. A fee may or may not be involved. SBDC does not charge for the advisors’ time.
- Mentor — Supports a no fee one-on-one relationship over an extended time, to assist you with the formation, growth and management of your business. Larger organizations have internal mentors, but as the leader of a small business, you will need to find an external mentor.
- Licensed Professional — engaged for a fee for a specific purpose, on a retainer, to provide advice and guidance on legal, accounting, insurance or other issues.
This article focuses on the Advisor function, but all of these are necessary tools. The successful small business owner will learn how/when to reach out to each as needed.
Examples of business advising
Business advising can cover any of the five functional areas of business: operations, human resources, marketing, financial and legal/organization. As you might expect, what a business owner does in one of these areas affects the others, so it is often important to have an unbiased, or outside, set of eyes and ears to provide feedback and act as sounding board.
Also, small business owners often don’t have time or resources to do extensive research. The SBDC has access to many nationwide sources of data, such as Fintel, RMA, Reference USA and IBIS, which are also available at your local library. This structured data helps in decision-making and focus.
A couple of examples will give you an idea of how an SBDC advisor can assist you:
- Ray is an owner/operator licensed contractor in start-up year one. He sought marketing advice from me initially, and we developed a plan with a sales goal that is tracked monthly. I also recommended cash basis accounting in QBooks and his outside bookkeeper agreed. In reviewing monthly P&L and AR, we noted a large 90 day receivable of $8K, and collection would be very helpful. I referred this client to three attorneys who specialize in construction disputes and collection. Estimating, bidding and profit planning are other areas we are addressing now.
- Eli had worked as a VP for a medium sized supplier of technical talent to major corporations, for years. The owner wished to retire and Eli was offered the opportunity to buy the firm, which he wanted to do. Eli looked for outside advice to help him chart a course with a three year timeline, to be in position to purchase the business. We discussed asset vs. entity purchases, I found reliable reading material on the subject, developed a business plan, discussed equity and debt mix, and when time came to apply for an acquisition loan, three lenders were referred. Eli received attractive options for six figure term loans and he selected the best one.
Selecting an advisor
Write down your key needs or “pain points”. Then, note your timeline and budget. Then, ask SBDC for referrals and research providers. Interview each and ask for background and references. Lastly, be prepared to contribute to the process (since you are the expert in your business), Get down to work following the plan you develop, and evaluate progress as you go.
Author John Rodenburg is a Certified Business Advisor with Washington Small Business Development Center in Tacoma. He has more than 25 years experience and joined WSBDC in 2004, with his MBA from University of Denver and B.S. in Industrial Engineering from Montana State University. In 2014, he was named Washington State STAR Performer for his professional accomplishments.
This article is featured in the 2017 Small Business Resource Guide, a free publication from Business Examiner Media.