Small Biz Guru: Is it time you got a Consiglieri?.

There once was a time when many business owners used to speak to their accountants about almost anything and everything.

To many, an accountant was not just someone who helped prepare their taxes, but was often a friend and trusted adviser…

Someone who knew you, your family and your business intimately… A strategist who could help grow your business, help make you more money, and commercially speaking, keep you out of trouble.

And it wasn’t always about business. When I practiced as a small business accountant, I often would provide counsel to both men and women clients, in relation to personal matters they felt they couldn’t discuss with their partners. Problems that they felt were major causes of fear and anxiety. On most occasions, a single counseling session together would be all that was needed to help resolve the troubling situation.

It’s interesting to note that when people spoke highly of their accountants, they weren’t saying to their friends, "Hey, this guy makes sure that I never pay any tax…" What they usually would tell their friends was that their accountant was someone that cares, and could be trusted to do the right thing by them…

In less than three years, the type of accountant that I speak of has just about gone the way of the dinosaur.

For many small business owners now, the trust and confidence that once existed between accountant and client has been replaced with aggravation and discontent on an ever increasing scale. Bills have increased, but perceived value has gone down. Frustration levels rise as the accountant struggles to perform even the simplest of tasks such as returning telephone messages.

Many accountants now sadly admit that they now find themselves in a position where they no longer feel as though they are physically capable of helping their clients businesses grow, become more profitable etc. The connection that once existed between accountant and client has been replaced with less contact, almost mechanical approach to looking after your business affairs.

The reasons behind the changes are not hard to work out. The government and in particular, the Taxation Office has forced the average accountant into this position.

Your typical accountant is now virtually drowning under a massive sea of taxation compliance requirements. Compared with their work requirements pre July 2000, the average accountant’s compliance work load has increased by some 400 percent.

What this means is that your accountant no longer works for you. They are now quasi full time employees of the tax office with more overtime than they can handle. They have become BAS zombies.

The question then is, what can you do about it?

Welcome to what I call, "The age of the Consiglieri" or trusted adviser. Someone outside of your business, who can provide you with different personal and business perspectives, can see different opportunities and can identify negative consequences not normally considered.

Someone who will speak to you in truthful, frank, no nonsense, and un-diplomatic terms. A person whose opinions are unbiased, and is capable of advising without self- interest. Most importantly, they need to be someone who is solution focused, with a can-do attitude.

Ideally, you will want to work with a person that has experience in business, the law and in dealing with banks, landlords, suppliers and investors. Someone that understands and speaks fluently, the language of money… In particular, you want someone that has shown themselves as being capable building a profitable business.

There’s an adage that says never seek advice from a guy driving a broken down Magna. This includes so called well-wishing relatives, friends and neighbours. If they can barely rub two cents together, be polite, but give them the big miss. And be aware that great advice doesn’t and shouldn’t come cheap. Pay peanuts, get monkeys. At the same time, the benefits that you receive from having a Consiglieri should be real, tangible, money in the bank, type advantages.

For example, I receive a retainer from one client of $2000 per month for my Consiglieri services. Now this may seem a lot, but consider this… In the three months I been their Consiglieri, sales have risen by over 15% (on turnover of $750,000). Employment expenses are down 10%; and last week, a single piece of advice saved the client $37,500 a year in lost billings. You add it up. If I do no further work for him this year, he’s up at least $150,000 for a cost of $24,000. In anyone’s language, that’s a pretty good deal.

This leads one to ask the question, "Where does one find and then recruit a Consiglieri?" That’s a tough one. They could be anywhere. If I were looking, I would be focusing my attentions towards those individuals that have succeeded in areas that I need most help with. Sometimes these people will be retired business owners or former directors of companies. Another great source of guidance can be those people who have managed to build and eventually sell their businesses as significant going concerns. Such individuals often have vast reserves of business experience, matched with plenty of time on their hands to share the lessons learned over a lifetime of experience.

Patrick Lumbroso is a business and management development expert specializing in helping owners of small businesses. To receive Patrick’s free business tips each month, or if you wish to talk to Patrick about providing Consiglieri services to your business, send him an e-mail at patrick@patcorp.com.