When Do You Need Professional Business Advice?

One of the reasons people go into business for themselves is they like making their own decisions, so taking business advice from some unknown outsider is something entrepreneurs might naturally resist. But we all know the eighty-twenty rule: When a business grows, founders spend eighty percent of their time dealing with twenty percent of the issues affecting the bottom line, and twenty percent of their time dealing with concerns influencing eighty percent of the bottom line. That’s exactly backwards.

For example, suppose a business sees a spike in orders and doesn’t have the financial capacity to ramp up. Do they borrow the money, bootstrap it, or somehow push their way through? Working capital comes from earnings or borrowings, with diluting ownership by selling equity also a possibility. In the current climate, borrowed capital, already cheaper after taxes than other choices, is tempting because of low interest rates. On the other hand, how much debt can a balance sheet take on without affecting its quality? A business owner spending a lot of time on the matter is necessarily taking time away from what they do best.

Another example might be future growth. If your present market is looking tapped out, where do you look for expansion? A consultant’s business advice can help quantify a business’s current market successes and show the owner how to apply them to new opportunities.

Business owners retain professionals for tax or legal advice because they know that the price of expertise pays for itself and the same is true of professional business advice. A consultant can work with an owner to maximize a business’s strength and minimize its weaknesses; avoiding common hazards while locating new prospects.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.

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