Mark: Welcome to unsuitable on Rea Radio, the unique financial services and business advisory show that challenges your old school business practices and the traditional business and culture. You’ll hear from industry professionals who think beyond the suit and tie to offer meaningful modern solutions to help you enhance your company’s growth. I’m your host Mark Van Benschoten.
When it comes to your business you know what’s best, right? Sure, except when you don’t. But that’s okay, you’re not expected to know everything there is to know about finances, legal matters, investments, marketing, I could go on and on and on. Today we’re going to talk about why it’s important to have a business advisory team. We’ll be joined once again by Dave Cain who will provide us some insight into the importance of selecting your business advisory team. He will share some stories about his own advisory team experiences. Dave is very well versed in this and has a lot to offer. Welcome back to unsuitable, Dave.
Dave: Thank you Mark. It’s good to be back, looks like your budget has increased with the size of your road crew here and the equivalent.
Mark: We’ve got a nice support team. Yes we do.
Dave: Congratulations.
Mark: Thank you very much.
Dave: Yes. I really enjoy listening to your unsuitable podcast.
Mark: Thank you Dave.
Dave: They’re very nice, in fact I think I’m going to replace Mike and Mike podcast with yours.
Mark: Thank you very much.
Dave: Well done.
Mark: Thank you, I appreciate that. I normally like to schedule these for Fridays, but I went out to your calendar and you have a standing Friday, your Fridays are blocked out. What client is that you’re working on?
Dave: That’s my new grandson, I do a little baby sitting on Friday. That’s kind of fun, little break from the accounting and tax world.
Mark: I bet it is. Is there an advisory team to help you get through the day?
Dave: No, I’m on my own. There are times when I do need advice.
Mark: You should sell tickets for that, I think you could probably fund his 529 plan.
Dave: Yeah. He’s just now starting to crawl so that’s a whole different game.
Mark: You’ve got to get out of the chair every now and then.
Dave: Absolutely, absolutely. He goes after the remote and that’s a problem.
Mark: We’re here to talk about advisory team and the importance of advisory team. Is it a team of one? A team of a CPI?
Dave: Mark you know, we just came off the Super Bowl and spring training is about to start. I always love to draw analogies between sports and business. If you think of the Denver Broncos, they had an offensive coordinator, defensive coordinator, special teams guy, weight lifting, film study. I look at business in the same way, a business must have advisors in many different areas. It’s not a one person job anymore.
Mark: Getting back to your example, I assume that all those coordinators need to get along and meet and assess the talent that they have.
Dave: Sure, what they do is you … Obviously you played sports so you know you have to assess the playing field, you’ve got to…
Mark: I was on a team I watched, I didn’t get to play that much.
Dave: You were a rugby guy, weren’t you?
Mark: Yes I was.
Dave: Yeah, congratulations.
Mark: Thank you very much.
Dave: You have to assess the field, the competition. You’ve got to study. You’ve got to do film study. Then you’ve got to execute at the end. I think your advisory group is the group that helps you execute your strategy.
Mark: How do you handle a situation where one person on that advisory team’s trying to one up the others?
Dave: You have to go to the strengths of your team, somebody on that team has to step forward and take advantage and get back on point. Again the benefit is for the client and the client’s team, there has to be an agenda and a strategy going forward.
Mark: Yeah. I’ve had experiences where you’re on a team, you’re with a client, the banker’s probably there, and an attorney and maybe an insurance person, maybe a business coach. The we’ll pick on the attorney and the attorney’s trying to take over and drive the whole process and not just listen and input. He has an agenda which might not be what’s best for the client. I’ve struggled at times trying to rein that person in or get it back to what I believe is best for the client.
Dave: I think how you could do that, and how I try to do that is, have a list of what I call power questions that I want to bring to the table. That kind of steers the conversation back to the strategy session.
Mark: What should a business owner look for in sitting its advisory team? The 3 key values as they pick their team?
Dave: I think you have to make sure, just like anything else, your advisors have to have personality and bedside manner, and then the expertise goes without saying. But the playing field has changed, an advisor must have a heavy bench, a good strong bench and resources to go out and solve various problems, whether it be in the US, whether it be offshore. It has to be a diverse group.
Mark: You have a good point there about, not just the advisory, but it’s the bench strength I think is the term that you used.
Dave: Absolutely. Again, it’s a changing world, and it’s a world of specialty now. I think your advisors do need to have access to specialty areas.
Mark: Getting back to selecting of that advisory team, if you’re business owner do you get them all together and see if they play nice? Do you have a scheduled play date?
Dave: You could. I think you can start out socially and set the table of what the business owner wants, or someone on that business advisory team should be the quarterback and pull the agenda together and keep everybody on task because it is for the benefit of the client. In those sessions you really have to go into it about it’s a strategic session, not looking back at prior year financial statements or tax returns. We’re looking at other stuff, that normally doesn’t get touched in the day to day business.
Mark: Probably maybe some disruptive things, things out into the future.
Dave: Absolutely. Are we going into another market? Are we going to go offshore? Are we going to try to diversify? Do we need to make a strategic hire, mergers and acquisitions? All forward type thinking and information.
Mark: Should a business owner evaluate their advisory team? Some sort of evaluation.
Dave: I think those advisors are always being evaluated by the business owner. Every time there’s a presentation of financial data, a report, even when the invoice crosses the business owner’s desk, he’s going to look at it and say, “Did my advisor bring value to the table?” I think that’s his indirect way of assessing his talent on his advisory team.
Mark: A lot of the advice, our interactions with our clients, are not part of the team function, where we’re performing the services by ourselves, we’re not engaging legal counsel, bankers, things like that. Should we be reaching out to those respective peoples? Like, “Here’s what’s going on?”
Dave: Sure, I think what you’re referring to is make sure there’s some homework done by the quarterback of the team, to make sure that the advisory team that comes together, that everybody’s on the same page. They may not always agree but if we’re talking about going into a different market, or a merger and acquisition, everybody should have that knowledge before coming to the table.
Mark: Are there core values that a business advisor should have?
Dave: I think the business advisor must understand their client’s mission statement, their vision statement, their core values. I think that all goes into the package of being a business advisor, that’s a must. You know from your years of experience, you understand the core values of your business owner, makes it a lot easier when you do understand that and take that into consideration. If you don’t I think you’re probably not a very good advisor and probably won’t be on the team for very long.
Mark: You might think you are but your reality you’re probably not.
Dave: That’s correct.
Mark: Have you ever had any unpleasant experience with advisory teams?
Dave: I had. Do we have time for a story?
Mark: Yes we do.
Dave: We do? Okay.
Mark: 2 probably.
Dave: 2? We can get 2. One of the first advisory boards, or advisory group, I was on we had the banker, we had the attorney and I believe maybe one of the insurance, the broker was a the table. The business owner you could really did not want to be in this meeting, very uncomfortable, pretty rude. In fact one of the guys on the advisory team stopped the meeting and said, “What in the heck is going on here?” He sat and he looked at the business owner in the eye and said, “When is the last time you had a vacation?” The business owner said, “I haven’t had one for 3 years. I just don’t trust my employees when I’m away.” Right there the meeting stopped and we planned, the advisory group planned 3 one week vacations for the business owner.
Mark: I didn’t know you were a travel agent.
Dave: Absolutely, you do all kind of things in this business. While he was gone, that was the catalyst, springboard if you will, the gentleman did now have a very good strong management team. The groups then strategic point was to put together and HR team, some leadership training, some evaluations for his team, and he began to be very comfortable about getting away from the business.
Mark: That’s great, gets to what’s the benefit of having advisory team, “I’ll just do it myself. I know how I want it to get done. It will be best that way. I’ll sleep better at night.”
Dave: Again, in your experience you know that a lot of business owners have extreme egos and think they …
Mark: I met a few of those.
Dave: You met a few of those? You might be one of those.
Mark: Hey now.
Dave: Have extreme egos and-
Mark: Most people pay me compliments.
Dave: Well not me. Sometimes it’s very hard for business owners to take advice, but after a while you have to know your business owner, or your client. You get them passed that ego stage. Once you can, I think they start to enjoy the opportunity to collect various information from their advisory group. You think of that advisory group that’s in a room, the accountant, the CPA may have touches in year with 100 clients, the attorney may have touches with 150 client, the banker may have touches with 250 clients. Why in the world wouldn’t you take advantage of all that business experience that’s out there in the marketplace? I think once you get there … You can get there pretty easily.
Mark: Yeah. I guess ego, I’m smarter than the rest of them, what can they tell me? I don’t want to pay their rates, it’s not worth it. I assume those thoughts go through the owner’s mind.
Dave: I suspect. Probably first thing in they go around and they count the people in the room times the hourly rate and say, “Oh man, I’d better get my value out of this,” and they should. The other thing is too, is the flies and gnats get in the business owner’s way, that they just don’t have time to have an advisory meeting, they’re so busy running their business. You just don’t fall out of bed in the morning and say, “Yep, today is the day I’m going to call my advisory board together.” That’s why I think it’s very important that someone on that advisory team, like the CPA, be the quarterback of that advisory group and call the meetings and make it happen.
Mark: Have structure, it’s not, “I have this special event, this special situation,” but to have regular structured meetings?
Dave: You could do it quarterly or twice a year depending on the need of the business owner, but sure.
Mark: Have an agenda, “Here’s what we want to accomplish.”
Dave: There has to be agenda, and there has to be an action plan coming out of those meetings. I don’t use the word accountability, that’s kind of overused I think today, but everybody in that room when they leave has to have an action plan to bring something back to the meeting the next time they get together.
Mark: Would you have just the business owner? Would you have maybe a family member, heir apparent or somebody else in that meeting?
Dave: Again if this is strategic in nature, and it should be, there should be someone in the family if available, or a key member of the management team. Could be a family member but a key member of the management team. Sometimes we’ve tried the business owner’s spouse, mixed results on that. Those are interesting meetings all on its own.
Mark: That might be a different type of meeting.
Dave: That would be a different type of meeting. There’s some very interesting conversation going on, let’s just say that. What’s your next question? By the way did you get that hitch in your golf swing all worked out?
Mark: No it’s still there.
Dave: You need to fix that.
Mark: I need new clubs is what I need.
Dave: You do. You do.
Mark: That’s what I need.
Dave: Yeah.
Mark: The advisors, is it a static group? Is it, “I’m going to bring in a business broker this year, this quarter. I’m going to bring in an insurance person, a life insurance person?”
Dave: That’s an interesting concept, maybe a rotating group. What I have seen is it’s a pretty core group. Usually it is the CPA, the attorney, the banker and lately I think you have to bring in the financial planner, the financial advisor depending on the case of what’s going on. I think it has to be a core group so they can stay together.
Mark: Mm-hmm (affirmative).
Dave: Kind of like a mini board of directors if you will.
Mark: Sure. You’re probably recapping, I don’t want to say minutes of the last meeting, but, “Here’s what we discussed, here’s what your homework assignment was. What are you bringing back to the group?”
Dave: Yeah, I don’t like to spend a lot of time recapping the minutes that happened in the past. I just like to get the, here’s the agenda, forward thinking, and put the issue on the table and go for it.
Mark: Has anybody been reluctant to be an advisor? They’ve been approached and said, “No I’m not interested in doing that.”
Dave: I have not run into that. I think everybody feels that that’s a very positive event. It’s neat to see advisors want to be on that team.
Mark: Right, trusted business advisor status.
Dave: Yes. I think, and you know from your experience, that the team approach to a solution is always kind of fun because you get so many different perspectives.
Mark: Sure, diversity, inclusion, getting some different viewpoints on that.
Dave: Yeah. Even if there’s a dissenting member in the group, that’s okay. That’s fine to hear that. You argue a little bit, you arm wrestle and at the end you can come out with some great results.
Mark: I find it very frustrating when you go to a meeting and everything’s 100% unanimous, nobody has anything different today. I find that very disappointing when I see meetings go that way.
Dave: Well then, take it upon yourself to abstain or say nay.
Mark: I’m not going to abstain, I’m always going to have something to say.
Dave: You should be the quarterback of that meeting and you could raise the question. You could say, “Well now, wait a minute Mark. Last meeting you were opposed to that, now you’re for it. What changed your mind? What facts did you uncover? Help us out here.”
Mark: I don’t know if you had a chance to listen to Mike Taylor’s podcast. He went on about having the ability to admit when you’ve not made a mistake but your viewpoint changes, or maybe you did make a mistake. I think that’s fine especially in advisory group. Here’s what I was thinking before, and now under this fact pattern I’m changing my mind.
Dave: Sure, new facts come to the table. You have time to think about it, assess additional details.
Mark: I thought the comment that Mike made was very appropriate, I think we get too hung up, we only say things that we’re 100% sure of and sometimes we’re missing out on opportunities to provide some good advice.
Dave: You bring up a good point there, your advisory team has to be able to have crucial conversations in a larger group, which sometimes is very difficult to do. Sometimes those dissenting opinions are the catalyst for some change that needs to be made. Sometimes those aren’t always pleasant but at the end you’re talking with a group that has a wide range of experience, and they can get there
Mark: Right. Do you think that an advisory team is appropriate for every business?
Dave: I do. If you’re the business owner, if you have an opportunity to get great advice from individuals who have lived it, breathed it, touched other business, maybe experienced it, why wouldn’t you take advantage of that advice? Whether it’s good or bad, so you don’t make the same mistake or you go down a different path. Strategy is very, very hard to get started. The advisory group I think can get you moving with that.
Mark: I would think an exempt organization, executive director, should consider having an advisory team.
Dave: Sure. I don’t think it has anything to do with entity structure, whether it’s for profit, not for profit, large or small, I think there’s room for everybody to gain this advice from their advisors. I think if you were to sit down with your advisor when you do your fee arrangement for the year, I think can simply build those meetings into the fee structure. The business owner’s not always looking around and saying, “Oh my goodness, they’re charging me X per hour.” I think there’s a way to do that that’s a win-win for everyone.
Mark: Sure. I look at it as, if I didn’t have an advisory team I’m going to be successful, but to reach my full potential I need to learn from these experience of these other individuals have and they can offer up to me. To me it’s about reaching potential to have an advisory team.
Dave: You want your advisory team to push you. You want them to challenge. You want them to help you do the best that you can. It’s all about some continuous improvement, and it’s not always about profit and loss. It’s other things, like I had mentioned earlier before in the example, that business was very profitable but it was not a fun place to be and a fun place to work. They were making money but it was not a fun place to be. Until the owner kind of changed course and put in some leadership structure, then the whole core value, if you will, began to change. That owner did not have what I felt solid core values, or they were constantly moving. Nobody really had talked to him about core values.
Mark: Core values, that’s probably a great subject for another podcast, you think?
Dave: Sure, I’d like to do one. If that’s …
Mark: Do you know anybody who could talk about that?
Dave: I’d be more than happy to come back.
Mark: Okay.
Dave: I’ll have my attorney get in touch with regarding contract language on that.
Mark: Okay.
Dave: That’s a premium topic.
Mark: Okay. We need to wrap up here, but do we already know? We already asked you on your previous podcast what your superpower would be, so we’re going to ask you a different question, but no one’s ever asked me what my super power would be. You got me thinking here today, it would be the superpower of giving people the courage to offer up a dissenting opinion, when you’re in a room of 10, 12 people and everybody’s like, “Yep, yep, yep,” and you have a different feeling, just to give people the courage to say, “No I disagree, here’s what I have to offer.” That would be my superpower, if anybody cares.
Dave: I’m not sure anybody cares but I was thinking that your superpower, actually what your superpower should be, I think, you personally, knowing you like I do, I would say typical day in the morning, you should focus on homelessness and get rid of homelessness.
Mark: Okay.
Dave: In the afternoon, I think you should balance the federal budget.
Mark: Okay.
Dave: Then in the evening, this is where your superpower is, I want you to grab a guitar, I want you to jump on stage with Don Henley and Joe Walsh and Timothy B Schmit, they need a guy.
Mark: They need a guy, they have an opening?
Dave: They need an opening, and you guys got to do Hotel California.
Mark: Okay. I can’t sing and I can’t play a guitar so …
Dave: Just harmonize with those guys, they’ll carry you.
Mark: Okay. All right, back to your question.
Dave: What was my question?
Mark: I’m going to ask it, give me a second here. When you were a kid what did you want to be when you would grow up? Maybe when you want to grow up, what do you want to be?
Dave: When I was a kid there’s no question, I wanted to be a left handed fireball pitcher.
Mark: You’re not left handed.
Dave: No, but those guys make a lot of money and they were always big and tall.
Mark: You’re not big and tall.
Dave: No. I wanted to throw fast balls and hard breaking sliders.
Mark: Do you ever try throwing left handed?
Dave: No, I haven’t but I might try that one of these days.
Mark: You should.
Dave: Yeah. That’s what I wanted to be. Then actually, also I wanted to run a podcast. That was also one of the things I wanted to do.
Mark: I could be sick one month, you can do this.
Dave: Let’s give it a go.
Mark: Thanks for joining us today Dave. Thank you to our listeners for tuning in. If you still want to learn more about the importance of forming a business advisory team check out our website at www.reacpa.com/podcast. Don’t forget to subscribe to unsuitable on iTunes or SoundCloud and remember to share the wealth with your friends and colleagues. Until next time I’m Mark Van Benschoten for unsuitable on Rea Radio, encouraging you to loosen up your tie and think outside the box.
