Trusted adviser Featured

6:39am EDT October 29, 2006
Running a business can be a lonely job, but it doesn’t have to be. Even if your nameplate says president and/or CEO, that doesn’t mean you can’t get a little help, especially when it comes to making the difficult decisions.

In fact, some executives have a whole behind-the-scenes army of advisers to lend their expertise and advice. Smart Business spoke with the leaders of several regional businesses about engaging the help of advisers, as well as area experts to see how they view their role as a trusted adviser.

Join the club
So what constitutes a trusted adviser? Is it an accountant? A banker? A financial planner? How about all of the above?

“I have a network of advisers, all with different areas of expertise, and I turn to the appropriate talent,” says Barb Cagley, president of visual marketing firm SCK in Tremont.

When it comes to advisers, most CEOs subscribe to the idea of the more, the merrier. Often, various advisers play different roles and come in at different times in the decision-making process.

“My employees are the first [ones consulted] to seek answers to certain questions,” says David M. Wheeler, president of Hughie’s Audio Visual Service Inc. “Once a decision is considered, then it’s time to consult the money men — my accountant and banker. The accountant keeps me focused as to whether this is the right direction for the company to head and if this is the best use of time, money and resources.

“The bank is then brought in, and if they give the green light, then it usually means that all the planning and thought process has been done correctly. Banks do not like to lend money to bad ideas or losing propositions. The attorney is finally consulted to make sure we have covered all the legal ramifications.”

Each one of those individuals can bring distinct insights into your business operations. They regularly see other companies and how they operate, which lends itself to making good decisions within your own business, says Terry Poltorek, CEO of HP Manufacturing Co. Inc.

Advisers also complement your knowledge and should be considered an extension of your own skills.

“Even though I am a former CPA, I still don’t know all the ins and the outs of the changes on the new tax laws, for example,” says Richard Sippola, president of Carnegie Body Co. “So I rely on my CPA to do that for me. ... I’m asking somebody to have some expertise that’s different than what I have, or where we don’t have the time or capability in-house to get something done.”

Advisers are also there to help you navigate unfamiliar territory. Sippola says his corporate attorney was an invaluable asset when he was purchasing the company out of bankruptcy several years ago. Sippola didn’t have the background to navigate the complicated issues of bankruptcy court and the necessary pleadings and filings.

“He was able to help me through that maze of problems so we could get through the end goal, which was to buy the company,” says Sippola. “He helped to properly structure the deal without killing it so I ended up with the company that I wanted to purchase.”

While advisers may be beneficial to your operation in nine out of 10 situations, they aren’t infallible. It’s important to get someone who is truly knowledgeable in their field, something Sippola learned the hard way.

“My former 401(k) adviser told me that there would be no fees if we transferred our 401(k) plan to a different investment platform,” he says. “We went out to bid and changed firms. When we transferred our plan, we were hit with a substantial penalty for early withdrawal, and of course our pension adviser completely changed his story. I should have gotten the withdrawal liability in writing.

“Needless to say, I am pleased to no longer use that adviser for our retirement plan.”

What to expect
While everyone makes mistakes, it shouldn’t be a regular occurrence with your adviser. This brings up another important question: What, exactly, makes a good adviser? For this, we turned to the advisers themselves.

Dave Nash, an attorney at McMahon DeGulis LLP, says first and foremost, make sure you are seeking out a trusted adviser and not simply a vendor of certain services.

“Trusted advisers, by definition, give equal or better value for their services compared to cost,” says Nash. “Vendors, on the other hand, are out to maximize their own profit.”

And nearly every adviser questioned said it was important for them to thoroughly know their client and his or her business. The more they know, the better advice they can give.

“We need to understand our clients’ business issues,” says Don Misheff, managing partner of Ernst & Young’s Northeast Ohio office. “This allows us to bring the necessary specialization to fill their needs.”

So how does an effective adviser gain that crucial inside knowledge?

“It’s by having a very strong informal relationship as well as a formal relationship, and actually rolling up your sleeves and visiting the business and learning more about it,” says Misheff. “It also takes somebody that’s a good listener as well as a good answer provider.”

Executives appreciate an adviser who will be frank and honest with them.

“As a trusted adviser, my clients include me in some of their most sensitive and important business discussions because they know I bring value to the table,” says Nash. “Much of that value involves giving straight advice — no sugar coating.”

Also, don’t be afraid to seek out specialists or experts in specific fields, even if you have a good, long-standing relationship with other professionals.

“All lawyers are not created equal,” says Nash. “Small businesses often rely on general business practitioners when they really need expertise in specialty areas such as tax, labor, real estate, corporate and securities, estate and succession planning, and regulatory areas like our own.

“Our firm, for example, does nothing other than environmental law and related litigation. ... We help our clients find other trusted counsel for their other legal matters so that they can get the best advice as efficiently as possible.”

A trusted adviser also should have frequent interaction with his or her clients, maybe even daily, says Misheff.

“You have to be proactive, not reactive,” he says. “Interaction has to be a normal part of your business day where you’re just talking to the people to see what’s going on, or see things that may impact them.”

However, it is possible to overuse your trusted adviser. And it may be necessary to learn when to call for help and what issues can be handled without legal or other expenses.

Good advisers also will be understanding when you choose not to take their advice.

“There are many times the client has other facts that go beyond our current knowledge of the company,” says Misheff. “At the end of the day, it’s their business. ... It’s OK to agree to disagree.”

So if you’re considering enlisting the help of an adviser, go ahead and take the plunge. More than likely, it will not only help you run your business better, it will help you run a better business.

HOW TO REACH: McMahon DeGulis LLP,; Ernst & Young,; Carnegie Body Co.,; Hughie’s Audio Visual Service Inc.,; HP Manufacturing Co. Inc.,; SCK,