Finding the right financial advisor can make your business dreams a reality.
It would seem like common sense, but in taking on a financial advisor, it is extraordinarily important not only to find someone who is ethical and competent, but who also is somebody you are comfortable with and can talk to. It's not quite a spouse, but choosing your financial advisor can and should be a serious exercise.
I would tell any business owner that an important first step in taking on a financial advisor lay in our actually needing one and being willing to listen to the things he or she would tell us. Many of us, men in particular, are terrible about taking advice. If this describes you, I would have you seriously reconsider that approach or put off making this investment and commitment until such time as you are willing and able to listen and do the things that you will be asked to do.Just like a lawyer or a doctor, a financial advisor is (or at least should be) a professional and as such is likely to rummage around in your dirty laundry and just as likely to make recommendations that you are not entirely comfortable with.
He or she is not an hourly employee paid by you to shut up and do what they are told. On the contrary, they are experts whose job it is to advise you of your current financial status and make recommendations that will take your existing operation and make it better. We are not talking about a bookkeeper here, whose job it is to balance your books at the end of the day, the end of the week and the end of the month. We are talking about a financial professional who can give you in-depth and far reaching advice on everything from profit models to cash flow, corporate law and succession planning. His or her job is not to accept your bad habits and misbehaviors, but to take them into account in developing a plan toward your achieving your financial goals.
Goals are Necessary
Having a financial advisor almost insists that you have financial goals. Well let's just proceed as though we actually had some financial goals and things we would like to achieve and accomplish before we keel over and die. That you might actually end up with money in the bank and be able to retire someday are genuine risks to my efforts here but that would seem to be the price of admission.
I am an operations guy who has spent most of his career on or very close to the front line. I have no love or patience for bean counters. I like to think one of the things that has made me successful over the years has been my willingness to bend or break the rules when needed to get the job done. If I have a behavioral opposite, it would be those pesky bean counters.
They don't break rules, they love structure and they traditionally have made my life a living hell.
Whether I set a new sales record or pushed productivity to new heights, these guys invariably disapproved of my actions and somehow expected that I be profitable or at least consider the bottom line in these world saving efforts of mine. Though it pains me to admit it, these guys were mostly right and too often my undisciplined actions nearly always cost money.
I see similarities with the many shop owners and senior managers I have worked with over the years and who now would cry the huge advantages of having a strong financial plan driven by tactics and procedures that deliver that bottom line. Car count and happy customers mean nothing if you are losing money.
I would admit to liking two accountants in my whole life. One I married and the other I had the great good fortune of working with for six years. I was working as a business consultant and leadership coach for a great company near Baltimore. He was working as an instructor for the same company, teaching small business owners the intricacies of the P&L, what drove profits and in a very compelling way, described the importance and intricacies of financial planning. I liked him because he obviously was caring and competent, but more because he had a great sense of humor and made it all seem so pedestrian and doable.
The good news is that a great many of the clients I dealt with at that time listened to him and even took him on as an accountant and financial advisor and saw the benefit of his knowledge, ability and great advice.
I also would note that in the automotive world he had seen and heard it all. No matter the pleasing personality or bad habits, he always was willing to engage and advise better paths toward success. In matters of financial planning, he knew that the customer was not always right and did what he could to overcome those broken belief systems and bad habits. His favorite saying was, "Cash is king!"
Finding Your Fit
We of the automotive repair and tire worlds can take great pride in our ability to take on extraordinarily complex repair and service challenges en route to taking care of our customers on a regular basis. We also can take pride in our commitment to excellence and in our tenacity in overcoming huge challenges such as technician shortages and government regulation.
That the average shop and shop owner in the U.S. in generating under 6 percent net operating profit (NOP) would make it very clear that despite the many things we do well, financial planning is not one of them. Just as our customers look to us for our expertise, we need to look to an expert to help us get our financial house in some kind of order. We need to have a financial plan.
I could not tell you who would be the best financial advisor for you, because you and your business are unique, with your own strengths and weaknesses and your own goals. I would caution you against hiring somebody just because you liked him or her, but also warn you against hiring based on his diploma and resume alone. He or she will certainly need to be a professional with a track record, but they just as necessarily will need to be somebody you can be comfortable with and willing to engage.
This is a very intimate, important and far reaching relationship you are trying to establish and nothing like hiring that B-tech you have been looking for. In finding that perfect match, I would tell you to take your time and hire tough. Remember that if he or she is successful, you are successful. If he is not successful, well you know where that is leading.
If you do not have a financial goal, you are adrift on a stormy sea without a compass. If you have a goal you need a plan toward accomplishment or you are just dreaming.
It is not about what your labor margin should be or what you should charge on parts. It is about quality of life, making your business into an asset and being able to retire some time before your 83rd birthday. It really is about cash being king!
Brian Canning is 30-year veteran of the automotive repair industry who recently moved to the federal sector as a business analyst. For most of the past seven years he worked for a leading coaching company as a leadership and management coach and team leader, working with tire and repair shop owners from across the country.
