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