What are the benefits or hiring an external advisor?
If selected correctly, an external advisor can add value to your company as the outside eyes that identify problems within your organisation and fix them. The bonus to this short term hire is they are external, meaning they have no biases, distractions or emotional attachments; therefore issues within the business can be solved without damaging relationships or neglecting daily operations. There are no recurring overhead costs incurred for this valuable asset, who will hopefully come with a vast global network, all of whom could potentially offer you support. Some businesses will source an advisor with a skill-set that is missing from their company and just want a trusted pair of hands with a great reputation to solve their organisations problems.
What do I need to check before hiring an external advisor?
To begin with you need to have an objective for hiring the advisor, whether it’s to help you execute a transformation project or just to identify problems within your business, be clear on what you want them to achieve.
Depending on whether you are working with a firm or an individual, find out about their other client commitments, how would you fit in their diary? Think about the future, whether you are requiring one day a week or one day a month, think forward 12 months, will that requirement still suit you or will you need more commitment? You do not want somebody, who is going to give you a day now, that can’t give you two days in six months’ time. You will invest time in the advisor to help them to understand your business model, so make sure that investment isn’t wasted if they possibly can’t give you what you need in the future. So, to tackle this, make sure you have clear milestones that you communicate to them, then you’ll keep on track and ultimately achieve your objectives as a business.
What should I look for in an advisor?
Well, character is probably the biggest indicator as to whether they suit your objective and what I mean by that is, integrity. Does the advisor put the clients’ interests above their own? You want somebody who’s not afraid to challenge the business owners, at the risk of their own position. You need that challenge for the business to move forward and you need somebody who has the experience, which is relevant to the objective in question. Have they solved the issues you are facing in their previous experience and if not, do they have the skills for creative problem solving because essentially, that is what you’re paying them for?
Finally, find an advisor with strong communication skills, do they listen to the business? Do they ask you questions? It’s concerning if they don’t really understand you, the vision and where you want to take the business, because then they can’t give you anything other than generic advice. Then there is the interpersonal skills, so a relationship of trust must be built between the client and advisor, so honest conversations can be had for the business to lose dead weight and move forward. If these important character traits are present, they can commit to and understand your requirements and you maintain a transparent, trusting relationship, you will have an advisor that will definitely create value. If not, the wrong advisor will definitely destroy value.
This article is taken from our event ‘Developing a scalable & forward looking finance function’ in partnership with Seedrs. You can watch the full interview here.
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