Get Yoda's Wisdom

Every small business owner knows that above all else, you need to be totally focused to succeed.

Because of this, for the entrepreneur, oftentimes, keeping things in perspective is extraordinarily difficult. You live and breathe the business, day in and day out, dealing with customers, employees and suppliers. However, you often can't objectively assess product or marketing shortcomings. Opportunities may pop out of unusual circumstances, but if they don't pop right in front of you, you may miss them. When problems occur, often they come as a surprise, and their solutions elusive. Most of the time, the problem should have been apparent, but wasn't and its solution, while readily available, was ignored.

Unfortunately, most small business owners suffer "a forest for the trees" problem. They are so focused on what is right in front of them, that anything on the periphery is lost. They are looking into a distorted mirror for answers.

Does this describe you and your business?

If so, how do you keep a balance so that you can maintain objectivity and recognize opportunities or problems as they occur, without losing focus on moving the business forward?

You need to seek a trusted advisor or group of advisors to provide you, at a minimum, an objective mirror on your business and, ultimately, to hold you accountable for what is going on in and around your enterprise.

Maybe it's something as simple as a periodic breakfast with a friend, who may be a former colleague or a more experienced former entrepreneur, just to "vent," describing what's been happening in your business since you last met that is frustrating you. For the simple price of a breakfast, you may gain an insight or an idea that you wouldn't have otherwise gotten that might help you look at things a little differently or help make a change you might not have thought of.

Or, it could be something more formal like an advisory board made up of individuals who bring to your business both small business experience and/or functional expertise that you lack. This will cost you more than a breakfast, but it will be well worth it (see my previous post regarding "free advice being worth what you pay for it"). How you structure it and how frequently you meet are really up to you. However, whether it be an individual or a board, there are five key factors to consider relative to establishing a trusted advisor relationship:

Small Business Experience
Sorry, just because Uncle Ned will listen to your problems, the fact that he was an audit manager for Fortune 500 company for 40 years, says he won't be able to relate and therefore, not bring much to the party. While it is helpful, they don't have to have experience in your market sector or business type, but do seek out folks who have "had to make a payroll."

Functional Expertise (especially in areas where you are weak)
If your background is strong in sales and marketing, but you have no feel for "the numbers," an advisor with a strong finance background can really provide insights that you might never have discovered on your own.

Benchmark Position or Plan (and the willingness to share it)
You need to have a relative starting point to give your trusted advisor(s) a perspective as to where you are and what you are trying to accomplish. This should be documented and should contain as much detail as you feel comfortable sharing (but you need to be both honest and willing to share - they are either "trusted" or they're not). While you can verbally present it over pancakes and sausages, if they have something they can refer to either at the initial meeting and later, they can ask questions that might not have been evident in just your verbal outline. Plus, it gives them a way to track progress and ask about how you are doing relative to certain objectives or strategies that you initially presented.

Willingness to Listen to Criticism and New Perspectives (and the desire to change)
If you think you have all the answers, don't waste your time with advisors. You need to be willing to have some individual or group hold you accountable. To be able to listen to the potential that you might be doing something wrong from someone who has a way more experience, expertise or objectivity than you do. Further, they might bring value by presenting a contrarian view to a potential strategy you are considering that might work even better than the one you have developed.

Compensation (agreed upon at the outset)
This is always a knotty issue for entrepreneurs, especially when it involves potential cash. Sure, there are a lot of retired execs out there who will do this for nothing because they don't need the money. Not the point. The point is, when you pay for something you value you it way more than when it's for free. So structure something that works for you and for them, whether that be cash or stock options in your company. And understand, the more they are involved, the higher the comp should be. If you decide to create an advisory board and you will meet monthly, expect to pay a monthly fee. No matter the level of altruism, good business relationships only work when they are "win-win."

So to take a step back from that tree and observe the forest around you, find that trusted advisor to help you stay that way.

"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!