In our ongoing series about the biggest mistakes we’ve found that business owners make, we take a look at the common mistake of seeking business advice from the wrong people.
Starting a business is such a personal venture, and many small business owners begin their foray into their industries trying to do everything all by themselves. It can be challenging, wearing all those hats at once, but financially speaking it isn’t always feasible to hire help. It is natural to seek advice from your family, friends, employees, and the professional services providers you are working with already.
When first starting out, most business owners are all ears when seeking advice. They will talk to just about anyone who might have some insight. Here at The Alexander Group, over time we have learned that leaning on the wrong people for advice, will often get you the wrong advice.
Here are some of the people who might seem logical to help, but probably are not: Seeking Advice From The Wrong People.
Your spouse probably knows you better than anyone. In most cases, they are also the person in your life you can trust the most. They are usually your best sounding board and can certainly help you think things through when it comes to many aspects of your life, including your business.
However, there is one big problem with relying too much on your spouse for advice. Think about it, the only insight and perspective they have on your business comes from you. In other words, it’s more than likely your spouse has the same take you do on your business because you are the only one they have discussed it with. In some ways, talking to your spouse is like talking to yourself. So, not always the best source for fresh ideas and innovation.
CPA’s are certified experts in accounting principles and taxes. Most of their formal education was centered around accounting. Even their work-life balance revolves around tax season. We all know they essentially don’t stop working from about the third week of January until Tax Day in April.
But for the most part, that’s really what you should rely on them for-your accounting. They are not trained or experienced in many other aspects of running a business such as HR, sales forecasting, strategic planning or IT. Count on your accountant for accounting advice, not business advice.
Lawyers are essential advisors, as they can help you wade through the legalities of your business while also helping you establish a business structure, register your business and help you settle disputes with vendors or employees. You want to do everything by the book as a business owner, and lawyers typically know that book forward and backward.
However, lawyers know the law and how to run their law firm (usually) but they don’t know or have had experience running a business like yours. They generally lack expertise in things like inventory management, sales processes, or collecting Accounts Receivable.
Most bankers can give you sound financial advice and loan you money, but they ultimately may not know what is best for your business. Bankers can be highly skilled and knowledgeable in their own field, but they may have little to no knowledge of the ins and outs of running a business. While a banker may be able to help on the financial side, they usually don’t have the expertise to help you navigate the day to day or the strategic challenges of building a successful business.
Insurance agents can help you secure an insurance policy that fits your needs and the requirements of your business. They have experience sourcing policies and selling to clients, but they also usually don’t know the ins and outs of running a business. Often an agents primary focus is to help a client with a claim or sell new policies, not the long-term success of your business. When it comes to details about policies and different insurance options, reaching out to an agent is your best course of action. However, if you are looking for sound business advice, there is a much much better resource…
Since you have read through this far, you might have guessed by now our firm belief that the best resource of advice for business owners is other business owners. There really is no better solution to a problem than from someone who has personally experienced that same problem. You will either learn from what they did to solve the problem, or they can tell you what they did wrong so you don’t make the same mistakes.
Here at The Alexander Group, our members get personal one-on-one coaching from us and they meet monthly with a board of business owner peers we facilitate. Members often tell us they listen to the business advice we give in the coaching session, but they confirm that advice with “their board” in the peer group meeting.
By definition, coaches are mentors and advisors, so if you are looking seriously at taking your business to another level, we know the professionals here at The Alexander Group can help you. As a business owner without a coach and a peer board, you really are only accountable to yourself. The Alexander Group members tell us they make progress in their business because they promised their board they would do something, and they don’t want to come to the next meeting and have to admit they did not get it done.
The Alexander Group clients become accountable to each other and collaborate to help strengthen and grow companies. The Alexander Group meetings are guided by principles developed over the past 30 years and were created to help grow any business. The Alternative Board is part of a national brand that has more than 175 facilitators across the country. TAB Advisor, Cornell Meyer, has created multiple boards that fit multiple types of businesses. Many businesses have used our services with great success, and if you find yourself with questions that other types of advisors can’t answer, perhaps a business coach is the next step.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.