How to Select Your Business Professional Advisers and Partners

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By: Site Engineer, Staff

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It is very imperative that care should be taken when selecting your business and professional advisers. How well you select your professional and business advisers will have a direct influence on the success or failure of your business.

Poor advisers or no advisers at all will almost certainly lead to your business downfall. Your main advisers are your solicitors and accountant, followed by your bank manager.

You should see at least three different people from each of these three areas, before you make your selection, as it is important to have a comparative assessment.

The following general guidelines should assist you in the careful search and selection of your adviser.

  1. Availability: It is important for your advisers to be available when you need them. You are spending time and money to develop a relationship that will enhance your business decisions. If your adviser it frequently out of town or in the case of a solicitor, in court on a regular basis, you may not have the immediate access you need. Of course, if the adviser is of exceptional quality and ideally suited to your type of practice, some allowance should be made.
  2. Length of Time in Practice: There is a natural correlation between the degree of expertise and length of time in practice. Therefore, you should ask directly how many years’ experience your adviser has in the area of your needs.
  3. Ability to Aid Growth: A good professional adviser will have a history of assisting growth in other clients. The adviser should be able to anticipate growth problems in advance and provide guidance to deal with them.
  4. Size of Firm: Choosing a small or large firm is, in many ways, a question of your personal style. Larger firms tend to be in the city center. Their fees are higher and generally, they do not have an orientation to small business in their marketing and service priorities. However, the larger firm does have highly specialized advisers and a preferred base of associate personnel.
  5. Technical Competence: You must be satisfied that your adviser is competent in the areas of your greatest need. Ask him how experienced and how comfortable he is in your field. A specific understanding of the type of business you operate can help your advisers to provide the exact assistance you require. This is different from competence at a technical skill. It has more to do with experience in a particular industry. If the adviser has provided guidance to other similar small businesses, there is an increased possibility that the adviser will be able to provide you with more reliable assistance.
  6. Style and Personality: A critical factor in the selection of advisers, beyond simple compatibility, is style. You can have greater confidence in the aggressive adviser who takes the initiative and offers advice before you request it. This style indicates an initiator rather than a reactor, a person who anticipates and performs before matters become serious. It also indicates a creator, an entrepreneur, and a person who can empathize with your problems and concerns. This kind of adviser is more likely to come up with creative solutions to problems, and be a complement to your planning function. This type of adviser will be not only a sounding board but also a true part of the management team.
  7. Confidence: You should feel a sense of confidence when dealing with your adviser, both generally and when working together on a specific problem. Confidence will exist when you have a certain amount of personal compatibility with your adviser. If you don’t, you will probably end up rejecting a fair amount of advice. In other words, if you do not feel that good assurance exists between you and your adviser, seek a replacement as soon as possible. Never allow your advisers to treat you in a condescending or paternalistic manner. You should consider them as equals offering a service of their special knowledge.
  8. Recommendations: One of the most reliable methods of finding an adviser is by personal recommendation from your bank, your existing adviser or friends in business whose judgment and business sense you trust. Banks and business advisers who deal on a regular basis with professional advisers are in a good position to make judgments based on their business dealings. When solicitors, accountants, or banks refer to each other, it implies trust. Don’t rely completely on any recommendation; make your own cautions assessment.
  9. Credentials: Entrepreneurs should be aware that anyone can call himself an accountant but only qualified accountants are eligible to audit the accounts of limited companies. A qualified accountant will belong to a professional body and have a letter after his name: ACA or FCA. Certification and credentials only ensure that the individual has passed a minimum standard of education. They do not ensure that the individual is a dynamic, innovative, or creative business adviser with a specific amount of experience relevant to your needs.
  10. Clientele: Most professional advisers have a homogenous client base. Some advisers have a homogenous client base. Some advisers have many small business clients; some emphasize personal clients, while others go after corporate business. An adviser with a good base of small to medium-size commercial clients will probably be the most suited to your business needs.
  11. Fees: Fees vary according to the size of the community in which the professional practices, the size of practice, and the volume of business you may find that the advisers who charge fees at the middle to high end of the scale are often excellent practitioners in high demand who are still aggressive and innovative in their business practice. Advisers at the low end of the fee scale may be entrepreneurial types, but cut-rate, high volume approach to business that will not suit your objectives. Low prices sometimes indicate low quality, low esteem, or little experience. Very high priced advisers tend to be more conservative, less aggressive and less willing to spend the necessary time with small business clients, as their priorities are the big firms. Fees vary and many professionals will negotiate with them.
  12. Communication: You should select an adviser who communicates openly and free of jargon. Your adviser should explain the necessary concepts to you so that you understand the issues involved and the decisions that have to be made. Effective communication also means that your advisers forward to you any correspondence relating to your business sent or received through their offices.
  13. Commitment: It is important to sense that your adviser is committed to your best interest and your success. An adviser who is involved with large, more important or higher paying clients than you may become indifferent to your needs. You should be alert to this.

This degree of specialization may or may not be necessary for your situation. It is not uncommon in larger firms to have small business clients passed over to junior associates or students in training, while the more senior advisers handle larger clients. Small firms generally relate well to small business entrepreneurs. Selecting an adviser in a small or medium – size firm of three to ten people provides you with alternative advisers if you need them. A sole practitioner may be very busy, too generalized in his or her areas of practice, and lack the referral base within the firm.

How to Choose a Solicitor

There are basically two types of solicitors that you should consider as your adviser. The same person might be able to assume both roles.

First, you need a solicitor who specializes in small businesses. One who cares about small business clients assumes the same role and attitude towards your business health and survival that your doctor does to your physical health.

Second, you need a solicitor who specializes in contract law. You may need to have several standard contracts prepared to depend upon the type and style of business you are considering.

There will be times when you will need to have a specialized contract made up by a solicitor, or have your solicitor review and advise you on a contract that a client has prepared.

If your business solicitor is not an expert in contract law, request a referral to someone within the firm or outside who is for continuity and efficiency, you will want to maintain him or her for all matters that do not require additional expertise. You should be able to phone your solicitor as the need arises, and feel confident that the unique respects of your business are known and understood.

For your protection, it is advisable you engage a solicitor before you start up your business, as there are many legal pitfalls that can be encountered. There is a temptation to save money on legal fees in the early stages of the business when cash flow is minimal.

Some people do their own incorporation to save on initial startup expenses, but then continue the saving by never obtaining legal or accounting advice – an unfortunate example of false economy and bad judgment.

How to Choose an Accountant

It is very important that you obtain a qualified accountant. An accountant is the other essential business adviser on the management team. A bookkeeper is not an accountant and there is no law to prevent anyone from using the name accountant and purporting to provide accounting services without any qualifications and training.

However, a chartered accountant can advise on all startup procedures for a new business, including the tax and accounting considerations of various types of business organization. An accountant will communicate with or coordinate work with your solicitor if required. The accountant considers such important matters as when your business year-end should be and what books should be kept.

An accountant can advise on all aspects of tax planning and tax-related business decisions that occur from time to time and submit your tax returns to the Inland Revenue. An accountant can also advise how to set up your office bookkeeping system. The accountant can have the bookkeeping done by someone in his firm at a negotiated fee, or you can engage an independent bookkeeper.

An accountant can advise you on preparing a business plan for a loan application. This includes recommending the type of loan you should consider and how it will be repaid. He will be required to prepare a profit and loss account, a balance sheet and a financial statement. He or she may refer you to a bank, which can have a positive effect on your loan application if the bank knows and respects the accountant.

An accountant can analyze and interpret your financial information, point out areas that need control, and recommend ways of implementing the necessary change.

How to Choose a Bank for Your Business

Your relationship with your bank and the bank manager is your financial lifeline. The process of selecting a bank is critical and comparative shopping is necessary to obtain the best combination of personality and knowledge.

There are changes in your bank’s relationship with you. When the manager changes, there is always a period of risk and uncertainty. The new manager may not want to have any medium or high-risk loans on the books taint his or her record.

During the first three or four months after a new manager takes over, outstanding loans are received and categorized within the criteria set by the new manager. This is the time when loans can be called in, additional security requested, or interest rates raised. You should develop a personal relationship with the manager when you take out a loan.

If you hear that a new manager has taken over, make a point of introducing yourself quickly and briefly discuss your business in a positive way.

Bank policies change from time to time and your type of business could be looked upon as increasing in risk. You may have a diversified business, not just related to property, or you may have other options available that you could explain to your bank manager.

How to Choose Consultant (Private Consultant) for Your Business Empire

You may wish to approach a practicing consultant for advice to assist you in your business. Consultants are not restrictively licensed like other professionals. To protect yourself, you should require their expertise, qualifications, and lengths of experience; obtain references and contact them.

Apply the general criteria for adviser selection. You will want to satisfy yourself that the consultant is personally successful.

If the consultant has not been successful based on the general criteria for adviser selection, how can he possibly offer advice that will help you towards success? Be advised!

Ten Methods of Choosing Business Partners

Before choosing a partner, the following questions should be completed by you about your prospective business partner. It should also be completed by your prospective business partner about you.

The next step is to exchange your answers and discuss areas where your answers conflicts or where sensitive concerns have been raised.

It is essential that you be completely candid in your responses. If you can’t resolve the outstanding issues, don’t go into business together.

Now answer the following questions:

  1. Why do you believe your business partner is compatible?
  2. What are your business partner’s best assets and capabilities that will help your business?
  3. What are your business partner’s areas of weakness that could have a negative effect on your business unless corrected?
  4. How long have you known your business partner and under what circumstances?
  5. If your partner is a spouse or relative, what effect do you believe it will have on your personal relationship if the business fails?
  6. What kind of partnership benefit are you willing to give your business partner?
  7. What kind of partnership benefit will your business partner expect or require?
  8. Could you operate the business without your business partner and how would you compensate?
  9. Could your business partner operate the business without you, and if so, how would he or she compensate?
  10. Does your partner have skills in areas in which you are weak, and so, what are those areas?

Selecting your business professional advisers and partners is a very serious business and entrepreneur must know. Choosing business professional advisers and partners is like choosing a life partner; so it must be done with utmost care and consideration of many things.

All the general criteria mentioned above must be critically examined one by one, and the advice is given taken care of.

The entrepreneur should take the issue of choosing solicitors, banks, accountants, and consultants very serious because they contribute a lot to the lifeline of any business.

 

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