How Entrepreneurs Can Build a Business Advice Network
After a lifetime of running businesses it’s natural to want to help others by passing on skills and knowledge. And with the enormous benefit of having been there one can be taken seriously when doing so.
So I’m frequently asked by retired or cashed-out entrepreneurs and company directors where to begin. Usually they start by suggesting that in my network there must be many businesses that would benefit from appointing them as a non executive director (NED). And so begins a well-rehearsed explanation from me that in working as a consultant to thousands of businesses over 30 years, not one ever asked me for an NED. And the times I recommended it, counted on one hand and never taken up.
They are dismayed at this. “But with all my experience I could do so much for a small business” they exclaim. “They obviously don’t understand but surely you could make them see”
So I say “thinking back to when you were running a business did you ever appoint an NED?”
“No I didn’t need to. I’ve got an MBA and I appointed smart people to my team”
“So do you think small business owners not smart?”
“Ummm…well they clearly aren’t too well educated in business matters and only seem to understand the product or service aspects. Most seem to have little clue about marketing, people and financial management. Am I not right?”
“Yes you are, by and large” I say “but thinking back to when you ran a business what would have emotionally concerned you about appointing an NED?”
“I suppose that my people would think I didn’t know what I was doing?”
“Dead right. And no business owner however small wants to admit that. So much as they may need help, they resist taking advice until often it’s too late”
“So is there a way in, to help them before it’s too late?”
“Have you thought about consultancy?”
“I’m not keen on that. I’ve met too many of them, tacky people all trying to sell me their services on the basis of a dubious track record. I’m better than that”
“Have you thought about being a business academic”?
“Not really – I want to do practical stuff that shows a result”
Long silence…
“Let me start again (says the entrepreneur). What is it that small business owners want?”
“Congratulations you’ve just made the first step towards becoming a good consultant!”
“I have?”
“Yes you’ve switched from telling me what you want, to asking me what the client wants”
“OK so what is it they want?”
“In my experience, practical solutions to everyday problems like how can I:
Get more customers?
Get them coming back for more?
Work more efficiently?
Get more out of my people?
Increase profits and cashflow?
Manage a crisis?”
“Fine. I’ve done all that - it’s what my CEO roles were all about”
“But they have longer term challenges too (I say) like how can I:
Exit the business with enough capital to retire?
Recover from a setback?
Grow bigger?
Achieve Life/work balance?
Be more Effective?
Diversify?
Manage risk?
“Yes I’ve done some of that too and I could certainly figure out the rest” he declares.
“Did you do all those personally or delegated?”
“50/50 but I think I know enough to advise”
“Do you think they want advice or the job done?”
“The latter I suppose”
“Right – so not something you’d always know to get your hands dirty doing! Bear in mind that that 96% of all businesses employ under 10 people. So there is no management structure and no time to do other than concentrate on making sales, the product or service and delivering it. The boss is multi-tasking, firefighting and committed to survival. So unless you provide answers that are immediately implementable you won’t get a look in”
“Hmm what about accountants? They must have many of these smaller businesses as clients. Is that a route into the market?”
“You’re right. But they are very focused on financial compliance work. It’s what they are trained for and switching into advising an owner across his/her whole business involves a philosophical rethink”
“How come?”
“Look at it like this. You (as an accountant) spent 30 years training and doing expert work that the law says must be done and which the client gladly passes to you to stay out of trouble. It involves preparing historic figures to produce a set of accounts and a tax return and probably also doing payroll processing and company secretarial filing. You know what you’re doing and your clients trust you to do it. Now suddenly, your professional institute and a horde of accountancy software providers starts telling you to diversify into whole business advisory work because online technology is taking away the compliance work that used to come in automatically.
You are concerned, so you take a look at consultancy work and see that it’s scary, because you have to analyse where a client business is now, work out where it could be and come up with a plan to take it to a new and better place, which you will also have to help them to implement.
It’s all conjecture so stands a chance of failure and with it, the client relationship. It also requires different behaviour, like the need to be assertive and motivational, not things that sit comfortably within the accountant character”
At this point a light comes on the head of my entrepreneur friend.
“Aha! My impression is that consultants find it hard to get new clients. Am I right?”
“Yes”
“And accountants have a need to diversify?”
“Yes”
“I can see how to put the two together!”
“Interesting” I say. “How will you overcome the distrust of consultants problem and the caution of accountants problem?”
With the entrepreneur drive now fully engaged my man says:
“Right. We need (see how he’s just recruited me into his new business venture) a business model where accountant practices set up as local business centres, partnered with consultants. We train and certify both to provide a new collaborative small business service, using approved methods and a code of practice.
“And how will you make it affordable to clients at the same time as profitable to deliver?
“Ah – just my subject – I'll automate all the processes and put them online to cut down time taken and eliminate travel. I’ll need your help, are you up for that?”
“Of course, so long as I can be your consultant to this wonderful project, but not your NED!!”