The Cost of Advice will be Far Outweighed by a Superior Outcome

I tend to have a personal philosophy when it comes to dealing with matters or situations in which I have little or no knowledge or experience. Despite my education, qualifications, experience, general worldly knowledge and business acumen, there will always be areas of life, both in business and personally, that I simply no little or nothing about. So, what are the alternatives? Well, I can either try to know a little about everything and still experience difficulties, or I can engage with others who hold these areas of expertise. It is this latter approach that I generally choose. Why? Because I know I am receiving sound valuable advice from the outset and I am also avoiding the future cost of initially doing the wrong thing in the first instance and then having to pay more to fix up the problem or issue I have caused.

So I am always intrigued when I speak with practitioners that try to implement something within or for their firms without the current, right or sufficient knowledge. As advisers, we endeavour to encourage our clients to contact us to discuss various scenarios or decisions prior to taking action. We want our clients to see us as their key advisers. This helps avoid mistakes, at times costly ones. Thus, when it comes to our own businesses, why do we avoid engaging suitable expertise to get it right from the outset?

I appreciate that there are probably two prongs to this – cost and sourcing the right adviser. Yes, for specific advice, there will generally always be a cost, whether that be for something such as an SOA, or selling a practice, for valuations, as well as for more general verbal advice. Whilst some of this is required by legislation, irrespective of whether this is so, I would challenge that the outcome from that guidance outweighs its costs. Furthermore, in some instances, you are able to delegate a large proportion of a process to that chosen adviser, such as in business sales.

The second aspect is finding the right adviser for you. Now there are parties out there that tout themselves as experts with the required knowledge in your areas of need with your best interests at heart and they’re simply not. There will always be some advisers that are a better fit for you, and there is no harm in acknowledging that, so it’s a matter of finding the adviser with whom you engage with well, trust and believe will do the best job for you, someone who is hopefully professional and ethical. Again, the cost of their service will become less important when you can see the value they can contribute.

If I can provide a couple of examples, which in this instance relate to the sale of practices. This is an area that I can in part understand why someone selling their business doesn’t want to pay a broker $20K, $30K, $50K or whatever. But, on the flip side, this is a transaction relating often to one of the vendor’s most significant assets, which quite often, will fund their retirement. Therefore, is this something that you want to gamble with; I would think not.

If I had a dollar for everyone that said to me they wished they had spoken to me prior to the sale of their practice, I would be one wealth women. However, that’s not the point to me. It’s the feeling of regret that I try to help practitioners avoid. In fact, I will often say to a client when providing advice that you may not like what I have to say, but I will be saying it rather than sitting on the fence, and I will tell you why, thus enabling the practitioner to make an informed decision for themselves with their eyes wide open.

Anyway, I had a discussion recently with a client who we had been working with on and off for several years now regarding the sale of their practice. We had appraised the firm highlighting its strengths and opportunities, we regularly spoke about the market conditions of the day and so on. During one of the later meetings, the client informed me that they had been approached by a firm wanting to acquire them and they were going to proceed with the sale rather than taking the practice to market. Yes I was disappointed because it was a great practice that would have generated significant market interest and for whom I felt we could have found a great new home. We spoke about some of the facts to watch out for and some of my concerns in respect of the proposed purchaser and suggested deal. When I spoke with the practitioner recently they mentioned the deal had been done, and despite some of those mentioned concerns arising, they still proceeded. But, even after only a short period following settlement, they then expressed significant regret, stating that they didn’t believe they had done the right thing, but couldn’t undo what had been done. I was gutted; I didn’t know what to say. These are the types of conversation I try to avoid at all costs, but ones that I have way too frequently.

I had another scenario where a client made enquiries about a practice for sale listed with another agent, was forwarded information about the listing which the agent clearly thought had been cleansed, only to find that the name of the firm was included as part of the file name. Now we can all make mistakes, no-one is infallible, however that information had been supplied without the need to sign a confidentiality agreement and the enquiring party now knew who was for sale without any restrictions.

The last scenario was when a client who was going to list their practice with us advised us that they had been approached separately by a third party offering to buy them. They were apologetic because we had already spent some time with them and they hadn’t paid us any money. However, they wanted to investigate this opportunity prior to committing to going to market. Our response – sure, no problem. That’s really important to do prior to signing up an agency agreement. However, I also let them know that we could act as their adviser throughout that process, if they so wished, given our services are significantly more diverse that simply the full practice broking service. For us, the central point of importance in all of our services is assisting our clients to get the best outcome possible.

Now some may see this as purely a promotion for our services. I’ll accept that call, if I have to. But I would ask you to see this more as a mix of frustration and disappointment. Frustration that as advisers, practitioners at times, fail to heed their own advice – speak to an expert prior to making or implementing a decision; and disappointment, when I hear the practitioner say that the outcome was not what they expected or desired and they now regret their decision. A little advice can certainly lead to a better outcome with less regret.

  • LinkedIn
  • Google+
  • PrintFriendly