The development of your business calls into your own experience together with those around you. The more experienced the advisor, the better, right?
We recently assisted a family group where the professional advisory team had been in place for over 40 years, they had grown up together as a business colleagues and things started to go awry.
At our first meeting, the advisor ran the meeting, told us about the issues in the business and his solution for dealing with them. The owners, an older couple, nodded in a deferential manner as the problems we laid out and the solutions put forward, we wondered why we were even in the room.
Then the bombshell was dropped.
The newly appointed company accountant advised the profitability drop off for the business was terminal, that the old ways were no longer working and hadn’t for a number of years and that the cost of acquiring clients had increased tenfold in the space of five years. If nothing changed the business would be closing in 12 months. The experience of a bricks and mortar operation meant that the business had a heavy footprint, and its online presence was laughable. It was being undercut by its own suppliers and it’s acquisition model was unsustainable.
“But revenue is increasing”
“We have always turned it around”
“The business has always been solid”
Upon understanding the relationship it was clear that this experience was counting against the business. Things had changed but they haven’t, the evolution of a competitive marketplace had left the business without tools. Even the marketing approach was archaic, the business had no graphic design, advertisements were in print only and the forums were failing to meet their client base.
Experience mattered when the advisor stepped up to acknowledge that he was out of his depth and external advice was needed urgently. He quickly acted as the conduit between the owners and the external team to bring the business to a stable (and in this case, saleable) business.
Experience is all subjective and the old way may not be the best in the rapidly changing landscape. An external view of your business is not always what has occurred in the past, but what will work into the future.