BBQ Advisers and You

BBQ Advisers… you know the ones, they claim to know it all and then some. There’s even a song from Stevie Wonder about them ‘He’s Mr. Know It All’. Have a listen – there’s some great lyrics there!

So why would we talk about ‘them’ from a small business owner’s perspective?

Well, in the business environment, we call them ‘BBQ Advisers’, as they offer advice that can often do more harm than good. If they have no experience in your field, why would you take their advice – as well-meaning as it can be – to heart?

Would a surgeon take medical advice from a banker?

The thing is, however, that people DO take on this kind of advice. The more you listen to it, the more it will erode your confidence, and potentially lead to disastrous results. Such opinion and advice you choose to then act upon without verification from your industry or professional support network, or at least, has eroded your confidence that you are doing the right thing.

An even more concise definition is: ‘Prescription without proper Diagnosis is Malpractice’

All too often, this advice is being championed by someone whose ‘village is looking for their idiot’.

What this really does is AMPLIFY your isolation in business. ‘Isolation…’ you say – yip. This often culminates in the 3.00am ‘wake up in a cold sweat’ moment – sound familiar? This is ultimately because of your isolation, and you think you have no option or desire to share the business issues of concern (‘burning issues’ or ‘hot button issues’) with the people that are closest to you, like:

  • Spouses

  • Business partners (yes, they often don’t know what you’re fretting about)

  • Family

  • Friends

  • Bankers

  • And, of course, your professional support network of accountants, lawyers and consultants

 

So why would the typical SME not confer with their professional advisers? Often, it’s because you won’t value the advice you should be seeking or want to pay for.

This could also be because SME operators justify the BBQ advice because it sounds like a ‘sweet deal’ the tax man doesn’t know about, and your Accountant will just say what you think to shut down this shortcut.

So, who is really to blame here? Obviously, it is YOU. Worse still, you know it. A business never outperforms its leadership, and by you making ill-informed decisions from snippets of information gleaned over the BBQ, not only is it careless, it is dumb!

Seeking the right advice and the right time will always save or make you money – even if it is to confirm the advice you have received. It is still peace of mind and something you should treat with respect and not think you are being ‘clever’ by acting on this unproven shortcut.

So why is this, and how does it manifest itself in normal circumstances?

Here are some examples:

BOB

Bob goes to the party after a successful week where he has made great strides to sell his business for a price he wanted and would set him up nicely to look after his children.

His goal was to step back after his wife passed away and be there for his children, and, after a planned 5 years of stepping back, he would re-enter the business world. In the meantime, he would potter on his farm.

At the BBQ, his ‘mate’ Bazza hears he is selling and says he is crazy because the business is successful (based on hearsay) and launches into a period of strident advice to hang onto it.

Bob thinks about this and agrees to withdraw from the business sale, hang onto it and employs a manager to run the business. Sounds like a good outcome, right?

Well, this actually happened, and I know the business struggled without Bob heavily involved. He couldn’t see as much of his children as he wanted and ended up having to grow the business to achieve enough to retain the Manager – otherwise he would have had to work even longer hours without the Manager at the expense of family time.

The outcome is adequate from an income perspective, but Bob’s personal goals were largely sacrificed by advice given by someone that did not know Bob’s real desires for his family.

Bob now risks selling the business in a market where there are less buyers – something he could have taken advantage of had he sold in the first place. Yes, it was still Bob’s decision but good ol’ Bazza’s words kept ringing in his ears and Bob chose not to seek a second opinion.

 

MARY

Mary starts up her own business, and in her social outings is often told by her friends that being in business is great because you can write off all the expenses that the tax man didn't get disclosed.

Even though the tax man only gets 28 cents in the dollar for the bulk of the costs being written off (not the 100% of the expense), she is effectively taking a risk with her tax returns for a paltry 28 cents and is totally focused on hiding profits rather than making it.

As we know, a business is valued on it profit history, so in effect, Mary is eroding her business investment value markedly. As it would happen, her personal life changed and she needed to relocate, requiring her business to be sold for a price based on her under-performing profit history.

Both these are real case studies and highlights the impact BBQ advisers can have on any business.

So, what is the solution?

 

Firstly, don’t be an island! Seek verification and validation to any key advice you glean from your network of contacts if it has potential to significantly impact on your business.

Value your professional business support – if you don’t then change your professional adviser(s).

Don’t give advice on topics you are not fully briefed upon – sure, express an opinion but be wary not to state it as fact or is ideal for the people you are conveying it without fully understanding the total issue.

Finally, remember the two key sayings in this topic:

  • Monkey do what monkey say – enjoy the banana!

  • Better to keep your mouth shut and look a fool than open it and remove all doubt!