No matter how experienced you and your employees are, you cannot expect to have all the skills and knowledge your business needs, particularly as requirements change as your business grows.
For growing businesses, continually facing new problems and opportunities, the need for advice can be even greater.
This guide outlines the different kinds of advisors and how they might be able to help your business. It also explains how to find the right advisors and manage your relationships with them.
Understand what different advisors can do for you
Using an advisor may be a legal requirement - e.g. if your company accounts need auditing - or an option you can choose to improve your business performance. Different types of advisors can offer different skills and services in different ways.
Some business advisors and consultants offer broad-based, general advice and support. Business mentors also offer broad support, but more by acting as a sounding board for your own ideas. By contrast, many other advisors provide specific skills or services in their particular area of expertise, such as accountants, lawyers and marketing consultants.
As well as giving advice, many advisors can help in other ways. For example, your advisor might train you to do something, or simply take on a task and do it.
You can use advisors to provide continuing support - e.g. by having a regular monthly meeting or you might want help with a specific project.
When to use advisors
Businesses often use advisors when something changes - e.g. you decide to start exporting, to upgrade your IT systems or to sell the business. Using an advisor is often helpful when you have a temporary requirement for expertise. If you need skills and support longer term, investing in recruiting or training suitable employees may be more cost-effective.
An advisor can also provide the sort of independent advice and fresh thinking that can be difficult for employees who work full time in your business. Many businesses use mentors and non-executive directors to provide this sort of support.
The starting point for finding the right advisors is to understand what you are trying to achieve, and what sort of skills and knowledge you need to help you.
Decide what you need from an advisor
In some cases, you are legally required to use an advisor - e.g. if your company accounts need auditing. Apart from this, the decision to bring in an advisor typically starts with a problem or an opportunity that you don't feel your existing team can handle without support. For example, your employees might not have the skills needed, or be too busy with other commitments.
It's important to involve key employees in deciding what you need from an advisor. As well as understanding the factors that need to be taken into account (such as existing systems and constraints) their co-operation is likely to be vital if a new project is to succeed.
You should clearly define what you are trying to achieve, and use this to define objectives that are SMART (specific, measurable, achievable, relevant to your overall business goals and time-limited). You should also establish a budget, taking into account how important the problem or opportunity is and your level of financial resources.
You can use this to prepare a brief to recruit and manage the right advisor. This should include:
- a description of your organisation - its purpose and values, what it does, its size and structure
- what you are trying to achieve and why you need help
- skills and experience you are looking for
- specific goals you expect the advisor to achieve and the timetables for doing this
You may choose to include an outline budget in the brief, explaining what you are prepared to pay and asking what can be done within that budget. Or you might ask potential advisors to tell you what approach they would recommend and how much it would cost.
Find the right advisor
Many businesses find advisors through personal recommendations from business contacts, existing advisors and friends. Info entrepreneurs’ advisory services specialists may be able to answer your needs. Other useful sources of advice include your local chambers of commerce and your trade association. You can also approach the relevant professional body to ask for names of members in your area who offer the services you want.
Whichever route you take, it's essential to check that the advisor suits your particular circumstances. Ideally, you want an advisor who:
- understands your industry
- has worked with businesses your size
- has experience of any particular issues you want to deal with
- holds any necessary qualifications
- is a member of an appropriate professional body or trade association
Once you have collected information about potential advisors, you can draw up a shortlist based on these criteria. You should send them all a copy of the brief - see the page in this guide on how to decide what you need from an advisor. You can then ask the candidates to an initial meeting.
Questions to ask your advisor include:
- What similar projects have you worked on (and can you provide references for checking)?
- How would you recommend approaching this project?
- Who would do the work - which individual employees of yours (and would you subcontract any of the work out)?
- How would your charges be calculated and what would you expect the overall cost to be?
You should also try to assess their personality and whether you think they would get along well with you and other employees who would be working with them.
Draw up an agreement with your advisor
As part of choosing an advisor, you should have prepared a brief - see the page in this guide on how to decide what you need from an advisor. But it's worth discussing this with the advisor to see whether it needs changing. An experienced advisor may be able to suggest a better approach or point out something you have overlooked.
Everything should be agreed in a written contract. Your contract should include:
- objectives and specific deliverables - i.e. what you expect the advisor to produce - and overall timetables
- any interim milestones and deadlines
- how the relationship between you will work (see the page in this guide on how to manage the relationship with your advisor)
- a confidentiality agreement
- who will own any intellectual property created during the project
- charges and payment arrangements
- how either party can terminate the agreement
Advisors typically charge costs either as a fixed fee (such as a monthly retainer) or as a daily rate. Your agreement should clearly specify what other expenses you will be required to pay, e.g. the advisor's travel expenses.
You should try to build flexibility into the agreement - it's not uncommon to find that your needs change as a project progresses. It's also a good idea to agree to some kind of access to the advisor once the project is over - being able to ask quick follow-up questions can be very valuable.
If necessary, and particularly for larger contracts, you should get legal advice.
Manage the relationship with your advisor
A clear work plan, with measurable interim milestones, makes it much easier to check that your relationship is working and the project is on track. Your agreement with the advisor should also include the flexibility to deal with any changes in your requirements that may emerge as the project progresses.
It's important to realise that the relationship is two-way and that you have a major part to play in making it succeed. For example, you might need to ensure that employees and other resources are available, or be responsible for carrying out particular tasks. So your plan should include making sure that you can handle your commitments.
Open and honest communication is vital. You should be able to contact each other as necessary, and hold regular review meetings to discuss progress. It's best if you, or another individual, take overall responsibility for the relationship, but you'll need to take into account feedback from other key employees as well.
If any problems do develop in the relationship, the sooner you can deal with them the less damage they are likely to cause. See the page in this guide on how to identify and manage problems with your advisor.
At the end of any project you should take the time to review how well it worked and what you can learn for the future.
Identify and manage problems with your advisor
Keep an eye out for danger signs that suggest something is going wrong. For example:
- Is the advisor trying to tie you into an inflexible agreement?
- Is the advisor reluctant to commit to specific targets and deadlines?
- Does the advice you are getting reflect your own particular circumstances and priorities?
- Are you getting advice you can use and that leads to business benefits?
- Is the relationship producing what you expect and are deadlines being hit?
- Are you building a relationship of trust - does the advisor let you know when you are making a mistake?
- Are you progressing towards your overall objectives, or does everything seem to lead to a need for yet more advice?
- Do your calls get returned and does the advisor turn up on time for meetings?
- Do you look forward to meetings with the advisor?
You should take action as soon as you identify a potential problem before it can escalate.
Start by trying to identify the underlying cause. For example, you might have briefed the advisor badly, or you and the advisor may have different expectations of how the relationship should work. Ask the advisor if there is anything giving them difficulties - lack of co-operation from employees, or pressure from other clients to give their business priority over yours.
If possible, you should reach a clear agreement on how to remedy the problem. If you can't do this yourselves, the advisor may belong to a professional body that offers a dispute resolution process.
If serious problems cannot be resolved, you may have no choice but to bring the relationship to an end.
End your relationship with an advisor
Successful project completion might bring a natural end to your relationship with an advisor. But it's also a good opportunity to review your business objectives and consider what advice you might now need. An advisor who has already worked with you and understands your business can be a valuable asset.
At the same time, you should not simply rely on the same advisor regardless of how your circumstances have changed. It's worth thinking again about what you are looking for and whether your existing advisor is the best choice. See the page in this guide on how to decide what you need from an advisor.
If you are using an advisor on a continuing basis, you should still have some form of targets and assessment process to help you monitor how well the relationship is working. For example, you might be able to set broad performance benchmarks for your business, and regularly review progress towards them.
As your business grows, you may find that you want to recruit or train employees to replace an advisor. For example, you might want to increase the level of in-house IT expertise as your systems become increasingly complex, or to recruit a personnel manager as the number of employees increases.
Or you may find that you need to terminate a relationship if things aren't working as they should.
In any case, your original agreement should specify how the relationship can be brought to an end. See the page in this guide on how to draw up an agreement with your advisor.
Original document, Get the right advisors for growth, © Crown copyright 2009
Source: Business Link http://www.businesslink.gov.uk/
Adapted for Québec by Info entrepreneurs