The business was my advertising agency, Red Rocks. The decision was to hire two external Directors. One was a retired advertising guy who added both experience and credibility to my fledgling agency. The other was a smart and logical businessman who I knew would challenge me. I had my Yoda and my Dr Spock… both complimentary to my creative, slightly wild approach to business. We agreed I would pay them each $1,000 per month each – not much really compared to standard Director’s Fees. But for me it was $24,000 off my bottom line in my second year of business. It was a terrifying decision. I was barely making that much in profit! I knew I’d have to seriously up my game in order to afford them. I was scared, but I was sure with the right action plan and these two men to challenge and support me I could get there.
I can now say with complete certainty that it was the best business decision I ever made. Business ownership can be a lonely business. I couldn’t afford to hire senior people to bounce ideas off, to give me feedback on my strategies. I was naïve when it came to business and needed guidance around the financial goals I set. I was headstrong and had regular love affairs with my own sense of brilliance (always followed swiftly by equally strong feelings of inadequacy). My lack of business experience and fleeting spells of over-confidence made me a dangerous force. But with my two Directors meeting me every month, I had to get my act together. I had to have a solid business plan, with convincing strategies. I had to set targets and run a budget. I had to grow up and learn not to be a solo operator. With my two Directors guiding, challenging, supporting and motivating me I grew my business rapidly year on year. My profits grew alongside my sales, thanks to aggressive new business targets and tight control on expenses. I stopped looking at their fees as an expense and viewed them as an investment.
Now I strongly advise all small business owners to invest in an external advisor of some sort. You can look for an independent Director like I did, or you can get an Advisory Board. Or you can bring in a mentor or coach to work alongside you. A piece of cautionary advise whichever way you go, is to be sure the people you invite into this critical role have earned the right to be there. They MUST be experienced business people, who have successfully built their own businesses and understand what it’s like first hand to be in your position. Please DO NOT hire a business coach who has never owned a business or engage a Director who has no experience with governance.
Having been on the receiving end of good external advisors, I know how important it is. I have a couple of spaces coming up and am looking for a committed, ambitious and dedicated business owner to work with me. You can be sure I’ll challenge not only you but your business model too. My aim is to see good businesses become exceptional businesses. If you’d like to talk to me about my mentoring programme click here:
From the desk of Liber8me. Business mentors and publisher of Liber8 Your Business – The revolutionary business planning technique that will set every business owner free.