This external "advisory board" has a vested interest in helping client businesses thrive, but all too often, business owners underestimate the value of keeping the positions in play. Unfortunately, the importance of establishing and maintaining good working relationships with all three advisers is often underrated, as are the ways advisers' interrelationships can advance an owner's interest. In fact, it's rare for most business owners even to consult this group of advisers regularly.
Properly chosen bankers, attorneys and CPAs, however, can provide a "spoke in the wheel" advantage that saves businesses money while helping to ensure that strategic plans are, indeed, strategic -- and that the business team is advancing toward its goal.
For example, a business owner considering an acquisition should first call his or her attorney to learn what is involved in such a transaction. The next calls will be to the banker to discuss financing and the accountant to analyze tax and other financial impacts. When the accountant, banker and attorney have established working relationships independent of the business owner, they are comfortable consulting each other to answer questions, and the whole process works smoothly.
Leveraging that expertise can be extremely beneficial to business owners, but it's important to select advisers who are best suited for a particular business, in terms of size and other areas of expertise.
When an imbalance is present as, for example, with a medium-sized firm that uses medium-sized law and accounting firms but a major international bank, the level of service could suffer. The business owner is probably dealing with partners in the law and accounting firms, but at the bank, the task may be delegated to a junior officer. The different backgrounds of these advisers can impede communication within the triangle offense and may prevent the business owner from leveraging the advisers as effectively as possible.
In addition, businesses that select the wrong-sized firm can end up paying for services they never or only occasionally use. Many businesses use their accountants only to prepare statements and annual reports, their banks only for checking accounts and loans, and their attorneys only for general business purposes.
If that's the case, they should be working with generalists in each specialty. If those generalists are the right people, they can refer clients to equally competent professionals when unusual needs arise.
For example, an accountant will know who provides pension planning, auditing or inventory control services; an attorney knows where to find expertise in litigation or estate planning; and a banker can make referrals for mezzanine debt, investment capital or leasing services.
By seeking referrals for such specialized needs from advisers they know and trust, business owners can pay for those services only when necessary. The fees for larger, full-service professional firms may be more than the value the business owner receives from those firms.
More important, a trusted triangle can coordinate the play off the bench during significant actions such as out-of-territory expansions, when multiple issues often require multiple players on all three fronts. A strong triangle can work closely with internal staff such as comptrollers or CFOs and marketing managers to address the complexities of any major undertaking.
Business owners are, of necessity, focused on their businesses, but those who don't make full use of their personal triangle offenses may be missing the opportunity to score a three-point advantage and truly achieve their goals. Jim Houston is senior vice president in the commercial banking department of MB Financial Bank. Reach him at (773) 292-5403 or www.mbfinancial.com.