10 Questions To Ask Your Business Advisor
Whether called advisers, coaches or consultants such people are more and more a feature of commercial life in the UK often replacing the traditional role of the bank manager or accountant.
Yet with no formal qualification required to be a business adviser in the UK, how can you be sure that he or she is properly able to give your business the help and advice you are looking for.
Many advisers will have specific qualifications in say Accountancy or Human Resources coupled with years of experience in their field but is this sufficient knowledge and experience to help your business and its unique situation?
The CMC Partnership has drawn up a list of 10 questions to ask advisers before choosing the person/ company to employ.
1. What is your experience?
Ask how long the adviser has been in business practice and the range of companies with which he or she has been associated. Ask them how their experience will relate to your business.
Whilst formal qualifications are not required to give business advice, ask what relevant qualifications he/ she has which together with their experience and professional network will enable them to provide advice across a wide range of business topics.
Find out what steps the adviser takes to stay up to date with changes and developments in the business world.
2. What services do you offer?
The services a business adviser offers depend on a number of factors including their experience, qualifications and membership of professional organisations. He or she may hold a specific license or other regulatory approval to provide advice on particular topics.
Some may be able to offer broad ranging advice others may provide advice only in specific areas such as funding options or tax issues.
3. How do you approach giving advice?
Advisers may have preferences for the type of clients and business situations he/ she typically likes to work with. Some advisers prefer to develop one plan by bringing together all of your business goals. Others provide advice on specific areas as and when needed.
Consider whether the adviser is only looking at your business objectives or whether they are taking your personal goals into account eg to retire at 50.
Find out if the adviser will carry out the business recommendations developed for you or refer you to others who will do so.
4. Off the shelf or off the wall?
Many problems or opportunities facing a business are not that unique even if you think they are. An adviser will often have come across a similar problem and have a ready-made solution. This is the knowledge you are paying for.
However some situations require a more imaginative approach – one size doesn’t always fit all. Does the adviser have this ability to look for creative solutions or will the ‘boxed’ answer always be the recommended one?
5. How will I pay for your services?
Your agreement with the adviser should make clear how he or she will be paid for the services to be provided.
There are several ways an adviser can be paid:
- Salary paid by their employer who may receive payment from you or others, either in fees or commissions, in order to pay the adviser's salary.
- Fees based on a monthly retainer, hourly or day rate or a specific amount for a defined piece of work.
- Commissions paid by a third party for the products sold to you to carry out the business planning recommendations.
- A combination of fees and commissions to reflect the work done to develop business planning recommendations.
While the amount you pay the adviser will depend on your particular needs, the business adviser should be able to provide you with an estimate of possible costs based on the work to be performed.
6. How extensive is your professional network?
You may think the adviser should know all the answers but in practice they will often refer to specialists when in-depth knowledge and relevant qualifications are required. Think of your adviser like your GP – able to help with most problems but also recognising when the issue needs to be addressed by an expert in that field.
A good adviser will have a professional network built up over many years who have the credibility to assist in specific areas. Make sure you know who these people are and why they are being recommended.
7. What about conflicts of interest?
Be careful that a business adviser is truly giving advice based on what is best for you and your business and is not making recommendations that are affected by a business relationship or partnership that the adviser has with someone else.
8. Confidentiality?
The business adviser will have access to many areas of confidential information. Ask the adviser how they ensure confidentiality.
9. What complaints have been made against you?
Hopefully none but complaints are part and parcel of business life and whilst a complaint may have been unjustified or based on a misunderstanding, the nature of the complaint may reveal a style of work that may not be apparent from other discussions.
10. Can I have it in writing?
Ask the adviser to provide you with a written agreement that details the services they will provide, the time scales involved and the fees that will be charged. Refer to this from time to time to keep your adviser on track but bear in mind your circumstances may change and so will the advice.
Nothing is certain, but these 10 questions will you give a better understanding of the way the Business Adviser you are thinking of using, works.
And as nothing is set in stone here’s one more question to ask.
11. Recommendations?
A good adviser will be very reliant upon his/ her reputation within their own network. Ask for recommendations from within their network together with access to three or four of their current or former clients. Speak with them about the adviser.
Author: Jon Heath, The CMC Partnership
Date: August 2006
