Six steps to choosing the right business adviser

If you’re shopping for a car, it’s easy to find information on fuel efficiency, safety, price and other factors of interest to you as a purchaser.  And it’s relatively easy to compare models in order to find which one is most likely to meet your needs.

But as an SME owner, can you do the same with professional advisers?

Yes, you can… but it’s not as simple as picking up a brochure.

To make things that little bit easier, we’ve come up with a short guide to help SME owners choose the right adviser to fit their business.

1. Understand who you’re dealing with

Are you ready for difficult questions and being challenged – or are you looking for a more supportive approach? You need to be on the same wavelength as your adviser in order to achieve the best results:

• Observe how prospective advisers act, behave and communicate in your meetings
• Make sure you are comfortable with their approach and communication style

Obviously, the better the rapport you are able to build with your adviser, the more successful the relationship is likely to be. One size does not fit all.

2. Understand the adviser’s typical client

By understanding whom a prospective adviser works with and their experience, you will be able to determine whether the adviser is likely to ‘get’ your situation.  Research the ‘types of clients the adviser typically deals with:

• The scale and ownership ‘type’ is more important than industry ‘type’. As an SME or family business owner, you are probably going to get a better level of understanding from someone who deals with SMEs, has worked in SMEs and/or owns an SME – not someone who primarily deals with corporate or government clients
• Understand how many clients the adviser has – and the average size of each client

3. Understand the adviser’s process and service standards

Knowing what your experience as a client is likely to be prior to engaging an adviser is very powerful:

• Ask about the ‘typical’ client experience and what this entails.  How often (and by what means) does the adviser typically communicate with clients?
• Ask if the firm uses any technology to interface with clients – if so, how does it work?
• Find out about the professional and support team behind the adviser. From a succession point of view you don’t want to be reliable on a ‘one man band’

By asking the right questions you will be able to gain useful insight into how you are likely to be treated as a client.

4. Understand fee options

Depending on the area of professional advice, there may be a range of fee options available.  It is important to understand what fees are charged – and how, so that there are no surprises post engagement:

• If the adviser receives any combination of retainer, time based, fixed fee or commission payments understand how these work and the proportion of annual revenue that each accounts for
• Is the firm – or any individual adviser – incentivised in any way, and if so, how?
• Aside from fees, what other costs are you likely to incur along the way?

Obviously as a SME owner you will need to see value in the fee structure.  Beware of any conflicts of interest where incentives exist for individual advisers.

5. Understand the plan

Most SMEs are looking for a long term relationship with their professional advisers.  Good professional relationships will develop and grow over time – but you should never get the feeling your adviser is trying to make you dependent on them.  As the owner of an SME you need to have insight into how your professional relationship will look now – and into the future:

• As your business grows, how does the adviser determine when it is time to ‘fire’ his or her self or change the service offering to suit the next stage of your development?
• What happens to your relationship with the firm if the principal advisor dies, is disabled, retires or leaves?

6. Understand the fine print

Failure to read the fine print could lead to issues down the track.  Take the time to review contracts – don’t just skip straight to the signing page!

• What is the adviser’s level of liability insurance?
• What is the adviser’s privacy policy?
• What level of commitment are you signing up for – and how do you ‘get out’ if things don’t go as planned?
• If the industry requires licencing – check that the prospective adviser is licensed

If you do need to hit the eject button – it’s best to do the leg-work up front to avoid any nasty surprises.

Choosing the right adviser is an important long-term decision for any SME owner.  Spending some time researching and comparing a number of firms will improve your chances of finding the right adviser and getting the results you are after.