Professional Advisors: 10 Qualities You Should Be Looking For

Image by Werner Heiber from Pixabay

Small business owners soon learn they cannot do everything themselves. Some matters - financial, tax and legal, specifically - require professional attention from an expert. Every small business owner-manager needs four good professional advisors, in this order of priority:

1. Business accountant.
2. Business lawyer.
3. Tax advisor.
4. Personal financial planner.

You should trust and like all of your professional advisors.  They should know and trust each other, and be able to work as a team with you, your managers and key employees, and each other.

What should you be looking for?

Well, let's start with a few things you DON'T want in an advisor. All egos should be checked at the door, including yours. Beware of control freaks who want to micromanage how you operate your business. it is, after all, your business. “Yes men” should be avoided as well. There is no point in paying people to tell you what you want to hear. A good professional advisor will look out for you, tell you what you need to hear even if you do not want to hear it, and will always put you and your business / family interests ahead of anything else.

Now that you know what to avoid, here are some things you should be looking for in your professional advisors, both as individuals and as a team.

1. Look for people who are already busy. Anyone worth retaining will already have been found by others. Busy professionals will never simply tell you what they think you want to hear, and will not let you run rough-shod over them. A busy professional is a proven and effective commodity.

2. Make sure they are available, and will make time for you. While you want someone who is busy, you also want someone who can be there when you need them. They should be able to commit to being available immediately in a crisis, and within a few days for any other reason. They should commit to providing strategic guidance and problem-solving direction on all your major projects. You should not expect them to handle every detail themselves – using associates, juniors and clerks to handle the routine work can be a cost-effective way of getting things done well and on time. But if they cannot commit to being available, or if they repeatedly let you down by failing to meet deadlines, it's an indicator that either (a) your business is not that important to them or (b) they have bitten off more than they can chew and do not have the resources to meet your needs. In either case, you should move on to someone else.

3. They should be experienced, not just in their area of expertise but also in representing owner-managers generally. There are professionals out there who specialize in representing owner-managers. They practice their profession full time. They know how you think and why you are the way you are. You should find professional advisors who have been practicing their profession for ten years or more on a full time basis, or who work with or for someone else that has. They should also have been representing owner-managers as 50% or more of their practice on a full time basis for at least ten years or more, or who work for someone else who has. The more they know about your industry the better, although that is not as important as their basic technical expertise and experience with owner-managed businesses generally. Whatever the project you have in mind, they should have done it before. Many times.

4. Good professional advisors are connected. They have a network of other professionals, consultants, lenders and others they can refer you to or call into a project when necessary. Make sure they can make useful referrals to you when necessary.

5. Good professional advisors are cost-effective.  When it comes to professional advisors, you get what you pay for at the low end of the range. The same is not always true at the high end. You do not want to hire a professional advisor who competes on price. The good ones do not have to and will refuse to do so. However, you do not need to pay the highest price in town either, unless you want bragging rights at the country club. Remember: there is a lot more to being cost-effective than just hourly rates. The ability to get to the point, and to get things done effectively and efficiently, is critical. That's why we recommend that you hire busy, experienced professionals. They do not need to run up your fees to fill their day with billable hours, and are too busy to burn more time than they need to. They know how to effectively manage their time to ensure they meet their clients' expectations.

6. Scalability is part of being cost-effective.  Some projects need to be handled in great depth and significant cost. Others need a mid-level approach. Finally, some projects should be handled at a minimalist level, including minimal cost to the client. Knowing which project is which, and having the judgment and resources to scale the response to the project, is a big part of being a good professional advisor. Some professional advisors only have one way of responding, and they lack the flexibility or resources to gear up or down to meet client needs for a particular project. In the long run, scalability is not only a way of saving a client money; the ability to consistently do it well demonstrates true expertise and judgment.

7. Another earmark of a good professional advisor is practicality.  The ability to work with sophisticated theory is a critical skill for professional advisors. However, the ability to apply that theory to a real-life situation is the art of a truly good professional advisor. There are two sets of laws and theories - the laws of the book and the laws of the street. Your professional advisors should know both. At the end of the day, it is the law of the street that usually prevails. Look for professional advisors who can explain the law of the book in a way that non-professionals can understand, but can also suggest how to implement the law of the street in a way that is simple, insightful, innovative and successful.

8. Integrity is the essence of professionalism.  Good professional advisors should be honest to a fault. If you find they are willing to bend the rules for you, then you have to wonder if you can trust whether their advice is above-board. Professionals who value integrity above all else will not only reflect well on you when dealing on your behalf, they will give you the kind of guidance you need to stay in compliance and out of trouble.

9. Your trusted advisors have to be people you like. They do not need to be or become your best friends, but there should be some basic chemistry between the two of you. You will be revealing a lot of confidential information to your professional advisors and the relationship will require mutual trust and respect. It all comes so much easier if you genuinely like each other and enjoy each other’s company.

­10. Finally, your professional advisors should be compatible with each other.  To build an effective team, the team members must respect and trust each other and be able to work together to advance your interests. All of your advisors should pass the test of compatibility.