A business advisor can be a true asset for an entrepreneur, particularly if this is their first startup.
A business advisor is different than a co-founder or investor. They aren’t looking for a piece of your business, and are usually interested in a mentoring-style position where they can provide you with advice and sometimes take on some of the work for you. This typically is a paid position, but a business owner might consider offering some type of equity in the company.
I’ve been serving as an advisor for the last year and learned a lot about how and where I can add expertise for a business. As a previous owner of numerous companies, I can apply my knowledge, experience and expertise to help make strategic decisions as an advisor. Here are my insights for how companies can leverage a business advisor to assist in achieving their strategic objectives:
Determine The Depth Of Their Role
Before you bring in a business advisor, consider how hands-on you want them to be in your business. I’ve taken on a very active role in the daily operations. However, I’ve seen other business advisors provide advice and direction farther afield. Similar to when you have investors who want to get involved and make decisions, it’s important to know in advance your level of comfort about the role they will play.
The business advisor will also want to know how much participation you want from them before getting started. This will align expectations and minimize any conflict down the line. Having an agreement on the business advisor’s role will also then allow them to get going on what they need to do for you.
When you have defined that role, the business advisor can take a certain amount of the hats you’ve been wearing, undertaking those tasks and projects where they have greater strength than you do.
Find An Advisor Who Understands Your Industry
You don’t want to work with a general business consultant because they won’t be able to give you detailed advice about your market, product or service offering, or critical factors like the regulatory environment or key trends. When you have a business advisor who understands what you are trying to do with your product or service, their advice is much more relevant to your needs.
They have seen the issues you are currently facing or have a working knowledge of what your target audience is seeking or what the competition has failed to do. This level of intelligence can help you shortcut your way to market by saving time and money on some of the research that would have been involved. It may even reveal information that you wouldn’t have discovered otherwise.
Identify And Manage A Pivot
Having a business advisor is essentially another pair of eyes that can often see what an owner cannot. You may have looked at your business plan so many times that you can no longer see anything that needs to change. However, a business advisor has been on the outside looking in and tends to spot the need for change — maybe even a pivot — in your company’s direction. Beyond just giving you a reality check, they can assist in overseeing that dramatic change.
When I started working with an invoicing company, I noted that the platform could be expanded to include more features that the freelance, startup and small business owner audiences wanted. Then, I helped the CEO look for the right approach to adding these, including whether to build these features himself or use an existing technology by acquiring another business.
Oversee Major Strategic Moves Like Acquisitions
When you are at a place where you and your advisor see an opportunity to make a major strategic move, the assistance of someone who has undertaken acquisitions, sold and exited businesses, and led mergers is invaluable. To make such a strategic play possible takes considerable thought and planning that you may have never done, especially if just running a business is new to you, let alone taking on another one.
A business advisor can deliver the types of agreements and due diligence necessary to make an acquisition work. In my case, I worked with the CEO on acquiring another online invoicing and payments company. I provided some of the negotiation and documents that he would need to move the discussion along and provided my knowledge of how to integrate this company. While I did not do all the work, I provided the insights necessary that guided him through the process.
Help The Advisor Help You
While there are so many ways to leverage a business advisor, you play an important role in ensuring that they can do the most during their time with you. This means getting organized, having information and financials at the ready, and regular communication on what you are doing and any issues that arise along the way. Of course, you won’t know everything to tell the business advisor (hence why you are bringing one in), but be as responsive, forthright, and transparent as possible so the advice and direction you get deliver the competitive advantage you want.