The Benefits of Business Advisories
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Across the United States small businesses are facing unprecedented challenges such as labor shortages, supply chain breakdowns and record market volatility. In such difficult times, many owners are turning to external help, such as consultants in order to gain clarity and direction in their entrepreneurial endeavors. However, this brings up an entirely new set of questions. How do I choose the right firm? What can they do for my business? Are they even necessary? All of which are entirely legitimate, especially considering the investment of time and resources in such a partnership. In this article, I will explain the differences between a consulting firm and an advisory, and what services they provide.
What is an Advisory?
A Business Advisory is a professional firm that provides strategic guidance and specialized consulting services such as business plan development, branding, marketing, and human resource management. Of course, these services can vary quite a bit depending on the specialization of the firm and the needs of the business seeking advisory services from them. In addition to providing guidance, advisories assist with the development and implementation of strategies, plans, and procedures to help businesses achieve their goals both short and long term. Another vital function of advisories is analyzing the current state of the business including finding issues in the day-to-day operations and processes, such as inefficient time management, gaps in talent, underutilization of resources, etc.
Advisory vs Consultant
Although Advisories and Consulting firms seem to be similar at first glance, they are actually quite different! For instance, most consulting firms tend to work on specific projects or problems related to their area of expertise, such as implementing a new IT system. However, once the project is completed, the consulting firm will simply leave the business to assist other clients. Advisories, on the other hand, tend to work on long term, ongoing projects and work with the owners on a much more technical level, such as developing HR policies, employee onboarding procedures, and contributing to the overall long-term success of the business. Businesses tend to partner with advisory firms for years, continually collaborating and building the relationship over time.
Benefits
- Risk Reduction
Once an advisory firm gets a chance to perform a top-down analysis of your business, they can clearly outline the opportunities and threats to your current situation and provide the necessary counsel to avoid potential problems and pitfalls going forward.
- Increased Profit and Efficiency
Refocusing and reprioritizing after the introduction of an advisory firm allows for processes and systems to be implemented, improved, and streamlined leading to tangible results regarding day-to-day operation of the business. Better employee training, financial restructuring, strategic planning, and ongoing support all lead to greater profitability and more opportunities as time goes on.
- Objective Counsel
Although an advisory firm works closely with the executives of a business, they are not “yes men” who will simply go along with the first idea that gets thrown out by the owners. They rely upon their years of industry experience to provide unbiased and direct solutions to whatever issues the business is currently facing. That being said, client feedback is invaluable, and the best consultants take a collaborative approach to developing solutions to problems.
- Long Term Partnership
Even after the foundation is laid out and the primary issues have been solved, an advisory firm will continue their partnership with the business they set out to assist for years to come, providing advice, research, meeting with the owners to gauge progress, and even preparing an exit strategy should the owners decide to retire one day.
Summary
Advisory services are becoming more and more popular among small-medium sized businesses as time goes on, and for good reason. Their industry expertise combined with their long-term dedication to their clients provide a sense of confidence and security that is in increasingly short supply these days. Scaling any business is not an easy feat, but with the expertise and guidance of a trusted advisor you are sure to reach new heights!