| Most small business owners seek advisors who can | | | | time?' "Entrepreneurs also fail to notice when they've |
| help them improve their businesses. They want advice | | | | entered a new stage of business development due to |
| from those who have the experience and really know | | | | some kind of major change in their operation that could |
| what they're talking about. But they can only benefit | | | | have been brought on by such factors as new |
| from the sound counsel if they listen to the expert's | | | | owners, loss of owners or major growth."The owners |
| guidance. Unfortunately, there are some entrepreneurs | | | | don't realize they're in a new ballpark with a new set |
| who aren't going to hear the professionals out or | | | | of rules they need to follow," Daniel said.Being |
| follow a plan no matter what. At that point, experts | | | | hard-headed can cost youRoger Bierman, a Fiducial |
| realize that they might as well save their breath and | | | | franchisee relations manager for Alaska and the North |
| hope that the business owner will eventually see the | | | | Central and Northwest regions, says there's no |
| error of their ways before it's too late.When it comes | | | | shortage of procrastinators in the small business ranks |
| to offering his advice, franchisee Sam Badgley is very | | | | who listen to what you have to say but never put the |
| up front with his Fiducial clients in Williamstown, WV. He | | | | wheels in motion."Some have to hear it many, many |
| tells them exactly what he expects and makes it very | | | | times," said Bierman. "There's an association between |
| clear what they need to do to follow his | | | | success and those people who react more quickly to |
| recommendations. If he encounters someone who | | | | changing trends and the procrastinators who just sit |
| repeatedly ignores everything he's been telling them | | | | there and tread water."For unsuccessful owners who |
| which is a total waste of his time, he then decides to | | | | procrastinate, nothing's ever going to happen so they |
| cut them loose as a client."Through experience I've | | | | can grow their business."Those that sit out there and |
| learned that when you run into somebody like that | | | | don't follow a system are least likely to succeed but |
| they are not going to change," said Badgley.Trust gives | | | | you need that to show it to the people who are doing |
| you a great advantageWhere the problems usually | | | | things," he said. "There is a difference between night |
| occur between advisor and client is in the | | | | and day."Bierman has a close friend who's owned an |
| administration of the account where owners fail to | | | | asphalt and concrete business for 10 years as a |
| deliver the timely data Badgley needs to help their | | | | middle man in various projects. He advised the owner |
| business."I'll get them to set timetables and set some | | | | to lower his prices but the owner procrastinated for |
| of those goals or targets but they just repeatedly miss | | | | two years on his pricing and it ended up costing him a |
| them," he said.For those businesses heading for | | | | lot of money."He always wanted to run between 25% |
| bankruptcy that have not heeded his advice, Badgley | | | | and 30% profit on his end but when you add that to |
| has suggested to owners that maybe they might want | | | | the bill you get prices out of the market," he said. "I told |
| to work for another company."Either they have never | | | | him if you lowered your price and get back to the 15% |
| worked for somebody or they don't have confidence," | | | | to 18% range then you would make it up through |
| he said. "They don't understand that they could work | | | | volume."This example does finish on an up note |
| for somebody else. I see the deer in the headlights | | | | because the owner finally came around and lowered |
| look."Badgley says that you can tell whether or not | | | | his prices two years later."Sometimes by not listening |
| people are going to be receptive to change."Most | | | | to good advice and being hard-headed it can cost you |
| people who come to you are desperate," he said. | | | | money," Bierman said. "That happens to a lot of |
| "They are in trouble-its crisis city and you can pretty | | | | people. They continue to use bad practices and some |
| well tell whether they've been there before and what | | | | don't catch it until it's too late. Then they find |
| caused it. They are always willing to change to solve | | | | themselves buried where they never can see |
| the problem but you don't know if they're willing to go | | | | daylight."Personal fortune is on the lineNo matter how |
| beyond that."That's where experience helps, says | | | | strongly Fiducial advisors plead their case to convince |
| Badgley, because after you've seen enough and been | | | | clients, they can only go so far in the process.Gene |
| told enough things it all begins to sound very similar. He | | | | Polley, a senior business advisor in Fiducial's San Diego |
| thinks that trust with any business profession gives | | | | office, has a contractor client who does stucco work |
| you a great advantage because you know what has | | | | in the housing boom that's just making money hand |
| been successful with those types of comments so | | | | over fist. But until he makes some changes in his |
| you can really cut to the chase.Over the years | | | | operation, the contractor is going to be paying vast |
| Badgley has tried following up with former clients to | | | | sums needlessly to the IRS when Polley says he could |
| see how they're doing and whether they eventually | | | | have designated some of those funds for a |
| came around."By and large most just continue to | | | | self-directed retirement plan. He has recommended on |
| struggle but for me it's kind of frustrating," he said. | | | | numerous occasions that the client change his |
| "That's the challenge."New stage of business | | | | business entity from a sole proprietorship to an S |
| developmentLisa Borgerding, a CPA and business | | | | corporation to protect his interests."I guess he's just too |
| advisor in Fiducial's Arvada, CO, office cited several | | | | busy to listen to my advice," said Polley. "He has |
| scenarios of clients who ran into difficulty by not | | | | multiple vehicles but his personal fortune is on the line |
| heeding the advice of their advisors.The first client is in | | | | every time one of his employees gets into a |
| the construction field and owes about $10,000 in payroll | | | | vehicle."It's frustrating for Polley watching clients |
| taxes to the Internal Revenue Service. Tack on | | | | throwing money away on taxes when it could have |
| penalties and interest and it's easy to see why this | | | | been put to better use in the business but he knows |
| situation is having such a great impact on their | | | | there's a limit to how hard you can push people."You |
| business. Borgerding noted that whether you claim | | | | give people the experience of your years and |
| bankruptcy or not, payroll taxes are not going to go | | | | sometimes they listen," he said. "Sometimes they listen |
| away."That's one of the largest expenses they're ever | | | | to you the first time but it varies from client to client. |
| going to pay," she said. "They just don't realize how | | | | You still keep on telling them to do the right thing."In |
| serious it is."And since they've dug themselves such a | | | | dealing with clients of both sexes Polley has |
| large hole it's going to be even that much harder for | | | | discovered that women are smart enough to realize |
| them to escape it.Another client owns a repackaging | | | | what they don't know while men only like advice when |
| company that also hasn't paid its payroll taxes. | | | | things are going well."When they're on a downward |
| Companies can easily fall into this trap especially when | | | | trend they really don't want to hear it," he said.Perhaps |
| the economy takes a turn and they didn't have the | | | | it's the very strength that the business was founded |
| volume of sales they normally do. But when advisors | | | | on that is also its greatest weakness."Business people |
| put together a payment plan to try and right the ship, | | | | are successful because they're self-assured and have |
| owners need to follow through.Experts maintain that | | | | been able to buck the trend because they have this |
| it's difficult for some entrepreneurs to accept advice | | | | independent attitude," Polley added. "They don't follow |
| from others because they've built their business from | | | | conventional wisdom in getting into the business."But |
| the ground up by themselves."The reason for that is | | | | that sometimes makes it harder for the owner to listen |
| they've had success using their own intuition," said Dr. | | | | and act on the sound advice they've been given.Dr. |
| Ralph Daniel, a business psychologist and family | | | | Daniel of the Center for Family Business Dynamics |
| business governance expert at the Center for Family | | | | added that in his experience, the "Rule of Three" often |
| Business Dynamics in Santa Barbara, CA. "They've | | | | applies to owners who resist advice."They don't |
| done really well following their gut instincts while other | | | | believe it until they hear the same difficult advice from |
| advisors were wrong. They say 'why should I listen this | | | | the third person," he said. |