Mark Bouris: Trusted advice

Business owners who approach me always ask the same question, “What advice can you give me for my business?” The answer is as simple as it is ironic. It’s something that has been indispensable to me and it’s something I believe every business owner should have. It’s advice.

The reasons for starting a business are fairly common. Budding business owners often begin a new venture because they either recognise a niche to fill, or have experience from working in a larger organisation and realise they can do it better on their own.

These are both valid reasons for starting a business, and they each have given me the motivation to start most of my own companies. But as exciting and invigorating as it is to be your own boss, there are common pitfalls that can make it all come crashing down – pitfalls that can be avoided by investing in advice.

What every business owner needs is someone who is going to ask the tough questions. The questions you probably don’t want to hear, or might even be embarrassed to answer. The questions that might make you wonder why you’re starting a business in the first place.

I am often baffled by people who invest their life savings into a business venture without including an adviser in the plan. Advice is the single most important piece of ammunition in any business artillery. Dun & Bradstreet, the business information firm that covers most of the developed world, says small businesses have a 37 per cent chance of surviving for four years and a 9 per cent chance of being around for a decade. Many have to shut themselves down after two or three years, simply because they’re not getting the return they expected and can’t afford to go on.

So if most young businesses face the same initial hurdles, why aren’t they doing more to avoid them? Nearly every successful business owner I speak to says that the first mistake they made in the beginning was underestimating the length of time and the money required to get their business off the ground. There are other notorious gaffes: investing more in the look of the company than the guts of the plan, buying too much or too little too soon, or getting caught up in the grand scheme without factoring in the logistics.

These seemingly obvious but all too common business blunders just go to show how invaluable advice can be.

When you start a business, there are a lot of questions you have to ask. What’s more important are the questions you need to be asked. The whole idea of a business adviser is having the comfort of knowing that there is someone on your team who has been there and done that.

You don’t buy a new car without taking it for a test drive, so why would you start a business without involving someone who is all too familiar with how the process works?

Inspiration, motivation and drive only go so far. What every budding business owner needs is someone who will challenge the plan. Someone who will start by identifying the simple things like getting a compliance road map from your solicitor, developing a financial plan with your accountant and ensuring that your bank will deal with your new venture. Then having someone who will assist in developing and executing your business plan to keep your company afloat.

It’s also having someone who will ask certain questions that are less obvious but equally as important. For instance, what kind of structure are you operating as? Will you take your income as salary or dividends? Will you employ or contract? Does your business name contravene a trademark?

Once your business is off the ground, the need for advice does not disappear – it becomes even more important. You will need a person who’s going to dig deep, to challenge you and make you think as much about the possible setbacks as you will about the potential successes. You need someone who cares about you and your business, but you also need someone who will provide a constant reality check.

Every new business owner starts their journey with motivation and inspiration, but the road often takes unexpected turns. That is when your adviser will be invaluable. Even the strongest, smartest and most accomplished business people have had someone to turn to for advice. There’s been someone who has done this for me throughout my career, and it’s the most valuable asset I have ever had.

Next week: Carman’s Fine Foods founder Carolyn Creswell

BRW

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