A Business Advisory Team is a Critical Step for Transitioning Businesses
The true value of advice is sometimes not clear until events have developed. The same might be said of advisors. However, if advisors are chosen well and managed effectively, their presence can help a family business prosper in a way that might otherwise prove difficult. Indeed, one might argue that the objectivity that can be achieved by using external advisors means that in the context of a family business, advisors have a particularly important role to play. Is there anything to be gained from giving thought to building an advisory team? Many might say that such a team surely develops organically and according to need. Additionally, owner managers may be confident that they know what is best for their business without the need for external (and often expensive) input. In a small family business that might be an accurate view (or an economically necessary one!); however, a business does not need to be terribly large before the need for external advice arises and, like it or not, as a business grows advisors will inevitably become part of the team. The development of an efficient advisory team is likely to be a gradual process. However, when the need for an advisor does arise, those involved in the appointment process should bear in mind a number of guidelines
A clear brief for advisors that sets out precisely what is expected of them will help all those involved to understand what is expected. There are a number of obvious reasons for this: avoiding the duplication of effort; clarifying responsibilities; ensuring the correct information is provided to the decision makers; and avoiding ‘mission creep’ whereby an advisor looks to increase their remit where it is not wanted! Typically, a summary of an advisor’s expected role would be set out in an advisor’s ‘retainer’ letter. However, the business might usefully decide to take this further and set out in a less formal way any other important expectations regarding the advisor’s role. For example, this might address the question of whether the advisor is expected to be proactive or simply reactive. It might also set out the expected lines of communication, identify the circumstances in which the advisor may alter the personnel involved (and those when they may not) and make clear any other points that are significant for that particular business. In a growing business the absence of a firm demarcation of roles is likely to increase the risks of confusion both internally and externally and the risk of matters inadvertently not being addressed.
Julie Keyes, a Twin Cities-based business coach, had the opportunity to address other business coaches and exit planners at the Minnesota Exit Planning seminar. Julie the head of the Exit Planning Institute – Minnesota. She offers comprehensive business strategy, coaching, consulting, and exiting services for closely held Minnesota businesses.
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