Business advisors can play a critical role in helping your organisation’s bottom line. You might well say that’s the entire point of hiring a business advisor in the first place. There wouldn’t be much point if they didn’t help your business improve its margins and grow.
But how do business advisors do it, and why does it pay to hire someone else to do a job that sounds like it should fall under the remit of every business owner and director? Shouldn’t you be capable of improving your own bottom line?
Yes and no. Sure, anyone who reaches a senior level in business management and leadership would be expected to have skills and knowledge that help to drive success. You’d expect anyone in that kind of role to be an expert in their particular market, for example, with a deep understanding born of years of experience as to what success looks like in that particular sector.
Business advisors bring a different skillset and perspective to the table. They are first and foremost financial experts, they have years of professional experience analysing the financial mechanics that underpin success (or otherwise) in hundreds of businesses across all industries. With that kind of expertise, business advisors can spot opportunities or single out inefficiencies at a technical level that even the most experienced business leaders might not spot.
It’s not about business advisors superseding the expertise owners and directors have, or being better at delivering growth. It’s about bringing on board a complementary set of skills to maximise the chances of success.
Here are five key areas business advisors focus on to achieve that.
No prizes for guessing this one. Financial analysis really is the bread and butter of business advisory. Most professional business advisors are qualified accountants and may be hired predominantly as accountants. So carrying out audits of the company’s financial statements, cash flow, budgeting, forecasting etc very much falls under their remit with their accountant’s hat on. But at the same time, it provides invaluable insights into the inner workings of a business that can help to identify areas where unnecessary costs can be cut, efficiency gains can be made, better deals can be struck and so on.
As we’ve already touched on, with their grounding in accountancy, business advisors make great auditors and analysers. As well as applying this to the company’s finances, they can turn these skills to assessing all other aspects of the business, including strategy. This will typically also involve analysis of the company’s market and competitors for benchmarking purposes, from which will follow setting goals and KPIs, prioritising initiatives, allocating resources and so on.
The flipside to improving business strategy is improving how it is implemented operationally. Does what happens day-to-day align with the strategy? If not, you’re never going to see the benefits in your bottom line. Business advisors can help by mapping operational structures and workflows against business objectives, and also by looking for opportunities to streamline processes and improve output.
Marketing and sales
Marketing and sales might not sound a great fit for an accountant’s skills and expertise. But as the main revenue-generating operational arms of any business, they rightly attract a lot of focus from business advisors. Again, a business advisor’s talent for analysis and investigation comes to the fore. They can help clients with things like conducting market research to identify customer needs and preferences, analyzing competitor strategies, and developing marketing campaigns that are targeted to the company’s target audience. Advisors can also help ensure sales strategies are optimised for generating the highest revenue possible, covering technical areas such as pricing strategy.
Finally, business advisors play a critical role in helping companies identify and manage risks. This includes assessing risks related to market conditions, competition, regulatory requirements, and other external factors. Advisors can help companies develop risk management strategies that address these challenges and help mitigate their impact on the company’s financial performance.