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Practice Management > Building Your Business

Help Wanted: Mistakes Owner-Advisors Make With Business Consultants

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While the internet has been a tremendous benefit in many areas of our lives, the doctors I know say it’s a nightmare for them. Based on their online “research,” most patients today come into a doctor’s office certain that they know exactly what their problem is and what the treatment should be. Doctors have to spend a significant amount of time convincing patients that they might not know quite as much as they think they do.

(Related: The Terrible Twos: The Key Decision Point for Advisory Business Growth)

As a consultant to owners of independent advisory businesses, I can relate. When I take on a new client, nine times out of 10, the first thing they want to do is tell me what their problem is and what needs to be done about it. And as you might have guessed, I find that they are wrong about that same ratio of the time.

While this may seem self-serving, I believe that all businesses, including advisory businesses, can benefit from good outside business consultants. In fact, the most successful advisory firms I know establish relationships with a consultant before they need one so they can quickly get the help they need when the time comes.

With that said, not all business owners are equal when it comes to benefiting from working with a consultant. Here are four of the biggest mistakes that I see business owners make with consultants, and how they reduce a consultant’s ability to help them:

They see their business as a collection of separate parts rather than as a whole. From this perspective, owners tend to look for simple solutions. If they need more clients, they get a marketing plan. If they are disorganized, they create an org chart. If an employee isn’t working out, they fire them and get someone else. If employee turnover is too high, they create a more generous compensation plan, etc.

As a consultant, I find that much of the value I add is to help owners see their business as one entity, made up of very closely related parts; so closely that if you change one part, it usually affects all the other parts — and not necessarily in a good way.

What’s more, a problem in one area is quite often caused by a problem in a seemingly unrelated area. For instance, slow client growth could be due to a low referral rate from existing clients, resulting from poor or uneven client service or poor client communications. A new marketing plan producing more clients isn’t going to fix that.

They don’t want to do things differently. If I had a dollar for every client who didn’t want to fix a problem because it was “the way we’ve always done it” … .

This falls into the have-a-heart-to-heart-talk-with-yourself category. If you really don’t want to do things differently, don’t hire a consultant, and save both of you from a major headache.

They don’t want to accept the fact that it could be their fault. Just like Jimmy Buffett concluded, most problems with advisory business are the owner’s fault, one way or another. That’s just part of the deal when you sit in the big chair. If you can’t deal with that, you’re either in the wrong job or need to accept that your business will always be limited by your own limitations.

Much of what I do is to help owner-advisors become better business owners. For most business owners, it’s a learned skill, and few advisors have formal business training. Poor employee performance often results from little or no training, micro-management or no management at all. The good news is that this is a fixable problem. The bad news is that for most owners, it’s not an easy problem to admit they have.

They take setbacks too hard. I hate to break it to you, but there is no secret sauce for creating a successful advisory business. That’s largely because every business is different. The owners have different skills and define success in different ways, the employees are different, the client markets are different and the clients themselves are different.

An experienced consultant can have a pretty good idea what’s going to work, and what isn’t. But the truth is, we never really know — and neither does anybody else (despite what they might tell you.) Consequently, every business is an experiment of one. We come up with a plan for where we think we want the business to go, and we take what we think is the best next step to get there. Then the next step and then the next step.

Unfortunately, things don’t always work out as planned. That’s why to grow a successful business, owners need to learn from their mistakes. Even more unfortunately, many owners either won’t admit to failure, blame others, or simply want to put it behind them as quickly as possible and move on. None of these help to us make better decisions in the future.

Instead, good owners see setbacks for what they really are: opportunities to get smarter about what will work for their business and what won’t. A clear understanding about why something didn’t work prepares us to make a better decision about the next step.

Working with a business consultant can help you build the business that you want. But to get there, you have to get out of the way — and let them help you become a better business owner.

— Read Zen and the Art of Advisory Firm Management on ThinkAdvisor. 


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