In my early days as an entrepreneur, I ran into a lot of consultants who claimed to be “experts” and guaranteed they could help me out.
Then I’d do some fact-checking and discover they were neither reliable nor experts, and their advice wasn’t worth the space in our email inboxes.
In the last few years, many people have turned their hands to entrepreneurship, which has resulted in an amazing startup boom. However, as history has shown, whenever there is a popular movement where people are investing their time and money, there will always be others trying to exploit them.
Popping out of the woodwork to make a quick buck are consultants providing all types of advice from brand positioning and operating agreement legalities to sales strategy and creating a lean canvas. I’ve seen startups spend an exorbitant amount of money or make irreversible mistakes based upon the “expert advice” that was “guaranteed” to take their business to new heights. New, impressionable founders seem to be especially susceptible. They are hoping for a savior who will come along and give them all the right answers.
But how do you discern good from destructive advice?
Some of the best advice I’ve ever received came from our business coach, Shawn Kinkade. Other business owners I trusted had worked with Kinkade and only had good things to say about how he helped them successfully navigate the rough seas of entrepreneurship. Based on his reputation, I knew he was someone to be trusted. The digital agency I owned in those days was going through a difficult time, and I reached out to Kinkade for help with strategy.
One of our flagship clients was an airline. We had worked with the company for close to eight years, but it was restructuring, threatening our relationship as a result. We were in a scary position. This client represented roughly 80 percent of our total monthly revenue. We had to plan for the inevitable bad times.
With Kinkade’s help, we got to work and evaluated every facet of my business. We put in place a new mission, financial and marketing strategy, and built a dependable sales pipeline. We also became laser-focused on what service offerings we should and shouldn’t provide. With Kinkade’s advice, I learned how to be proactive instead of reactive, and grew as a business owner and a leader. This advice ultimately helped me build a well-rounded company with a nimble and sustainable business model.
Within two months of losing that client, we became a stronger company than ever before — generating more revenue with a more diverse client base — and were eventually acquired.
So when we started a new company, DivvyHQ, the first person I reached out to was Shawn and invited him to join our advisory board.
No entrepreneur is on an island
You can’t build a successful company by yourself. Outside advisors and mentors are important to give you objective opinions and help you evaluate your business from the outside. However, you want to be sure you’re always evaluating their advice. What is it that makes that person credible?
Here’s how to filter the gold from the pyrite when it comes to finding a great mentor, consultant, or advisor:
- “Show me your results.” Don’t trust that everyone offering advice is an expert. Ask for the supporting data to back up their track record of success in helping their clients achieve their goals. Read any content they have published on their specific subject of expertise to see if they know what they are talking about. Do they frequently blog? Have they given any presentations you can watch online? Have they written articles for any reputable publications? Do they have a large online following? Have they published a book?
Talk to their clients. Ask those clients about their experience and the impact (good or bad) that consultant made on their business. This type of due diligence is especially important with any financial, accounting or legal advice.
- “What, no questions?” You’ve spent hundreds of hours strategizing. You know your business intimately — it’s your baby. Then an advisor comes along, listens to you for 10 minutes and starts rattling off exactly where you’re going wrong. This is a major red flag.
After all, how could he really know what’s wrong? He hasn’t dug deep enough to truly understand your business. He’s just telling you what worked for his business, and how you can duplicate those lessons. What worked for another company may not work for yours. This is a major red flag.
Be cautious of an advisor who rambles about himself. Typically, if someone spends most of his time talking about his accomplishments and how great he is, it’s usually because he’s compensating for a lack of confidence. Look elsewhere.
- “How well do you know my industry?” Search for consultants or advisors who have a deep knowledge of your specific industry and market. Why would you hire a consultant who has spent their entire career in commercial real estate if you have a financial tech company that has nothing to do with real estate? How could they possibly understand the nuances of how to scale a technology platform, or how to handle cyber security, etc.?
Talk to other founders or investors in your space and ask them who they recommend. Find experts who know your field well and have the battle scars to prove they have been there and done that. They will provide invaluable guidance to make sure you aren’t reinventing the wheel.
There’s plenty of great advice out there. Clarity.fm is a great place to start. As you gain experience, you’ll find it easier to differentiate the good from the bad. Until then, solicit second opinions, look for the metrics and don’t be wooed by consultants selling their own success. When you find the right advisors, hold on tight. They’re gold!
Brock Stechman is a co-founder of Kansas City-based DivvyHQ, a cloud-based content planning and production workflow tool built to help businesses with all their content initiatives.