Business owners share an unspoken struggle - it’s a lonely journey. Family and friends love you, but they can’t really relate, so it’s hard for them to give sensible or realistic support. Everyone can share in success, but there are few to share in the unavoidable setbacks.
Your workplace mental health is negatively impacted by stressful work, a high workload and a poor work-life balance - factors that many business owners identify with. So when it comes down to it, you need emotional support as much as you need business support.
To get this blend of business and emotional support, you need someone who can relate to you, someone who's been there. You need a business advisor. But not the kind of advisor who sits behind a desk in a grey suit and only calls you when you need him or her most desperately.
Rather, the right business advisor who will get to know you and your business on a personal level, removing the loneliness while also giving sound business advice.
Did you know as many as 30 per cent of new businesses fail in the first two years? That number rises to 50 percent within the first five years. That makes your business advisor critical to the survival of your business. And that means you want to avoid the “expensive yes-man”. You want (and need) genuine advice.
Through thick and thin, you should be able to pick up the phone and talk to your advisor, and they should be available to help you work through your business questions and concerns. Someone nodding their head to everything you say is not an advisor.
A good advisor, therefore, is positive and respectful, but not overly optimistic. There will be times when you need someone to answer all your burning questions and ensure you’ve looked at your business plan from every angle! You need to be challenged, and a good advisor will do this. They’ll ensure you follow a sensible process and hold you accountable so you learn and grow from your mistakes.
Maybe it’s obvious, but it’s essential that a business advisor should have business experience! Your business advisor’s expertise means that they can help you develop the skills and resources that you need to succeed. They’ll work with you on the next steps and the ones after those.
Their experience also means they can relate to your struggles in a way others can’t. Speaking from personal experience, they can recognise the pitfalls that you can’t see coming. An experienced business owner working as a business advisor will help you avoid those costly mistakes.
A good business advisor will know all the right questions to ask. They’ll discover your strengths and weaknesses and through a deep understanding of your business, they’ll push you to improve. You need support to channel your potential.
With someone who will evaluate and understand you and your business, your effectiveness will skyrocket.
"We meet with Isaac once a month and talk through the plans, the issues, and go through some ideas to improve things. It is great to have someone to answer our questions and to stress test our plans. The discussions vary greatly, and we never run out of things to talk about. I feel I can reach out to Isaac whenever I need some extra help."
There are five key steps to setting up a business, and a business advisor can work with you on developing them.
Begin by clearly articulating why you’re starting a business and outline the problem you’re going to solve for your customers. Then, define your vision and goals and document where you want your business to go. The plan should be a living document and feature simple yet actionable steps. The goals should be both personal and professional.
Next, calculate the capital it will require to get your business going. From setup to running your business through to the point of break even, your finances need to be planned out very thoughtfully.
The purpose of getting feedback from a business advisor is to validate your business idea. You’ll be looking for answers to questions like: Is there a market for it? How big is that market and are customers going to realistically pay you money to solve the problem you’re providing a solution to?
You want to surround yourself with the right people, the people who share your passion and come with skills to round out the whole team.
Save time by streamlining processes and automating tasks.
Selling a business isn’t just about the finances – it’s a way of structuring the business so you don’t need to be there to operate it.
Or maybe you’re at the other end of it, not setting up but selling up. You should know that while it’s hard to start and run a business, it’s also really, really hard to sell one. A business advisor can help you organise yourself to grow your business in a way that makes retirement a possibility.
Make sure you’ve got your exit strategy prepared well ahead of time, including an Information Memorandum (IM). That’s a sales brochure for the business, containing all the essential information a potential buyer might ask for. It should include an overview of the business, the market you’re in and your business model, as well as the last three years of financial data and summaries of your team, services and products.
Whether you’re just starting out or you’ve been around a while, you need to be reminded sometimes that your job isn’t to do everything yourself. You simply can’t do it all, so get out of your own way! Hire to bolster your weaknesses and go back to showing your strengths.
Your business needs a leader who thinks strategically and can create a plan of action. Your highest value is to be business savvy, driving the team and business forward. Growing a business involves delegating and communicating effectively.
When you delegate, you’re giving employees a chance to show the skills you hired them for, so don’t micromanage. You’re there to guide your employees and help streamline the processes.
It helps to clarify roles and create an organisational chart detailing who does what. If you need help with this step, see a business advisor for advice on how to begin.
Businesses that aren’t clear on what they need will struggle with their cash flow. In fact, many do. Xero reported that just under half (49.4 per cent) of Kiwi small businesses were cash flow positive in June of 2018. One practice is to have a cash flow forecast: keep track of your expected revenue and expenses, day to day. It’s a good way to get a clear picture of what’s coming in and going out.
After you’ve made a sale, invoice! The sooner you invoice, the better, as New Zealand small businesses average 8.3 days late when it comes to getting paid, according to Xero. You might send invoices immediately or on a daily basis - that depends on the kind of work you do. If you provide a service, consider asking for a deposit up front, or a payment part-way through.
Speaking of money coming in, learn to manage your debtors
Don’t offer too many payment terms to customers - you’re not a bank! Avoid long payment terms which will cause you flow problems.
For help managing your cash flow (the lifeblood of your business), seek out a business advisor who’ll give you genuine advice and support.