Business Advising: Why Owners Don’t Always Need What They Ask For
Did you know, that most small business owners ask for help with:
Startup and formation
Navigating government regulations
Access to capital
And the most commonly offered business services by coaches, consultants, and entrepreneur support organizations are:
Business planning
Marketing assistance
Understanding financials
Accessing capital
The two are seemingly not quite aligned. Why?
Getting and giving business owners what they want and need is hard. Because it’s complicated. What we need and what we want are often different things in life and in business. In my experience, the most successful business owners are open to new ideas, willing to test their assumptions, and willing to listen to experienced advisors.
Formation: Why It’s More Than Checking Boxes
When starting up, the business owner has an idea, something they love to do, a valuable product or service that others want, a vision for the company they want to build.
Yet, incorporating, getting a name, EIN, tax registration, business license, professional license, and so on are necessary but uninteresting. These are often time-consuming parts of the process. People can get distracted and discouraged before doing all that’s required. Or they make choices that are not well researched on the front end when caught up in the excitement of getting started. Worse yet is that, even with assistance, there are still way too many agencies, offices, and decision-making points to make the process easy or convenient.
Often, the mechanics of formation, registration, licensure, and certification, while tedious and unnecessarily complicated by bureaucracy, are not what will ultimately help the small business owner succeed. Ideally, we would restructure the legal, regulatory, and compliance processes to be streamlined and efficient, available from centralized locations that make additional technical assistance unnecessary.
If business owners don’t have to worry about those foundational pieces, their time and energy can be refocused on planning and processes—the real keys to success.
This leads us to the broader concept of what it means to assist someone with starting a business. Formation and compliance are one thing. Business model validation and planning are another. And those of us in the business of providing coaching and advisory services know that we can help clients improve their likelihood for success if we help business owners avoid common pitfalls when starting a new venture.
It’s All About Your Plan—Yes, You Need A Plan
As a strategic advisor, I consider business planning, marketing strategy, and financial management to be essential components of starting up, formation, and capital preparedness. My job is to help founders and owners do small, fast, inexpensive experiments to test their business ideas. Essentially, we work together to help them de-risk their venture as much as possible and position them to make good choices as they grow and build.
In practical terms, the goal is to avoid things like launching a new product that no one wants to buy, getting stuck with a lease they can’t afford, or offering services that cost more to provide than they can charge. That requires planning and financial projections. That initially slows things down so they can move faster later.
This can be frustrating for business owners who sought help so they could move faster. They can become discouraged when the process of starting and running their own business is harder and more complicated than they expected. Some look for shortcuts. Others expect to be the exception to the rule. They will point to lots of people who (as far as they can tell) didn’t have a plan and are successful. They will ask what is absolutely necessary vs. nice to have/do.
Honestly, some people can get by with less planning and preparation. That’s because the system is designed to unfairly favor those who start with more experience and resources (education, relationships, networks, money). They will recover faster from mistakes, setbacks will be less devastating, and failures will seed new beginnings.
For the rest of us—especially women and BIPOC owners—service providers, coaches, and consultants are trying to close the experience, capital, wealth, relationship, and knowledge gaps so our clients can have a fighting chance beyond formation. We know clients need more than checklists and money. Preparedness is the key differentiator and sometimes the best and only tool available.
Money Matters: How You Manage It As Well As How Much You Have
Money. All business owners want more money. Fast, easy, free, money.
The thing is, not everyone needs more capital. You may need tighter controls on cash flow management, a line of credit, and/or a better marketing and sales strategy.
For those who do need capital, that typically means a loan. There are very few grants for small businesses and in order for a business advisor, coach, or assistance provider to help you access market-rate capital, you need to be prepared. Most money isn’t easy, fast, or free to obtain.
Some of us are actively working to create new capital products like low and no-interest loans, grants, friends and family funds, mutual aid programs, and microloans. Others try to help owners explore earned revenue options to finance their growth. Hence, marketing strategies are one of the main points of discussion. Programs designed to increase the capacity of small businesses to price, market, and sell their products and services are a direct response to the desire of most business owners to access capital and the reality that most won’t qualify to do so. Helping you be better at managing cash flow and marketing and selling your product/service may be the best way an advisor can help you grow.
As for accessing the capital that exists—loans, investments, and a small number of grants—it requires business owners to be prepared to compete for and obtain that funding. Access to capital isn’t an introduction or application. It’s a process.
Accessing capital = relationships and preparedness.
Preparedness = having a plan and understanding your financials, knowing what you need, what capital is available, and the terms and conditions for getting it.
Obtaining capital = demonstrating that you know how to use the money to make more (or at least pay it back), jumping through hoops, and playing the game.
Using capital = investing in people, technology, systems, professional services, etc. that will help you make more money.
The keys to unlocking capital include business planning and understanding your financials, and the ability to communicate that knowledge to others the way they want to hear it. Period.
This isn’t about financial literacy. Bootstrapping business owners know how to manage finances. What they typically lack is knowledge of and access to financial tools and planning that translate their experience into actionable plans and experience communicating their plan in the language of loan officers and investors.
The Value of an Advisor
Knowledgeable advisors know how the game is played and can help you play it. The more you put on paper in advance, the better. Otherwise, the conversation you want to have about money will quickly become one about writing a plan, creating financial projections, and practicing your pitch. Every advisor I know has heard clients say that planning takes too much time, it’s too hard or unnecessary if you just listen to my story and believe in me and my vision, work ethic, passion… that’s not a thing if you want capital.
Some owners know that the system is not designed to make it easy for them to get money so they opt out of the process, choosing instead to grow organically or stay small. I’ve also met owners who are so discouraged by the odds that they don’t have the energy to try, convinced their planning efforts will be for naught. Those who do the hard work to make a plan that allows them to run their business in more sophisticated and sustainable ways always reap the rewards before and after securing capital.
Bottom-line: business owners, advisors, coaches, counselors, and entrepreneur support organizations want the same thing: to build strong, sustainable, profitable companies. In order to show you the money you’ve gotta show us the plan.
No one wants you to succeed more than business coaches and advisors. Entrepreneur support organizations and small business centers exist to help you succeed. Perhaps if we talked more often and frankly about what business owners want and what it really takes to start and grow a business, there would be less confusion about what services are offered and why.
Business owners: ask for what you need and be open to the possibility that the support and assistance might look different than you expect.
Coaches, advisors, and support organizations: explain why and how you have designed specific services to optimize business owner success, think about how to streamline your processes, and when possible, change the system to make it better for everyone.
