6 Questions to Ask When Choosing Advisers

When hiring staff, most retailers put a great deal of effort into the application process to make sure they’ve found the right person. Choosing your business advisers is equally important. These are the people you rely on to help you with specialized areas of the business, such as helping you understand estate laws and doing your taxes. When it comes to succession planning, these are the people who will be by your side as you negotiate the terms of the sale and set up estate plans. 

Wayne Rivers, co-founder and president of the Family Business Institute, has extensive experience helping small businesses transition to new ownership. He offers guidance on what you should consider when choosing advisers, both for helping in your day-to-day operations and also in guiding your business through a succession plan. 

Start With a Unified Front
Before you start a succession plan, make sure your team shares the same goals. For example, you may be involved in a partnership and will be bringing other leaders to discussions about your company’s future. If that is the case, work out your differences (as much as possible) before sitting down with an outside adviser. That will help you make better use of your time spent with the professionals guiding your plan. 

“Make sure everyone in leadership has a common vision,” says Rivers. “Partnerships or other cases where there are multiple owners are notoriously hard to manage because it’s rare they all share the same vision for the company. If there’s not a shared vision, then they end up with competing agendas. When the leadership is confused, the rank-and-file employees are confused. That can lead to strife and be unproductive.” 

Also, Rivers says it’s vitally important to involve your spouse in the process, even if they are not involved directly in the business. While they may not be a part of all discussions with your advisers, keep them apprised of major decisions so there are no surprises. 

“Don’t waste time and effort preparing your plan before you discuss it with your spouse, because you could set yourself up for trouble,” Rivers says.

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6 Questions to Ask

There are five advisers every retailer needs to have on their team at all times throughout their business career: A banker, a lawyer, a CPA, an insurance professional and an investment professional. In special cases, such as planning for succession, you might want to add a consultant. They may not all play an equal role, but they all will have something to contribute in their area of expertise. 

Here are some questions Rivers suggests you ask as you are choosing those advisers. 

1. Who will do the bulk of the work? Don’t think you have to get all of your advisers to sit down together when you’re contemplating a big decision. While sometimes it could be ideal, it will also be expensive. You might also get conflicting advice. Choose the one who will help construct most of your plan; consult the others as needed. And if you do need to get several of them together, keep a tight agenda so you don’t waste your time and money. 

“Most of the time, you’ll find one adviser who will do 80 percent of the heavy lifting,” says Rivers. “You can go to the others to help fill in the gaps.” 

2. Is my current team of advisers still the best for me? More than likely, you already have advisers. They may have been with your business for decades. But as you are thinking about planning for succession, it’s critical that you take a close look and consider if they are still the best fit for you going forward. Do they still have the energy and capacity to help you through this important transition? 

3. Do they interact well with upcoming leaders? When you’re thinking about succession, the decisions you make about the business are no longer about you. You need to create a vision that will appeal to the next group of leaders following you. The advisers you choose need to interact well with that new group of leaders because they will be a big part of the transition. 

4. Do they specialize in the industry? Look for advisers who understand the home improvement industry, preferably those who have experience helping other retailers in a business transition. Similar to going to a specialty doctor, the advisers you choose should be dialed in to your unique needs. 

5. Who else have they helped? Ask for references or find who else they have helped. This will tell you a lot about what they can and cannot do. If your CPA, for example, has never helped another business with a succession plan, then they are the wrong pick for you. 

6. What do other retailers say? Consult your peers in the industry who have already been through the succession process, either as incoming or outgoing owners. They can help you sort through your adviser options and other aspects of the process. 

“If you can, find someone who operated a hardware store and then sold it successfully,” says Rivers. “They know what worked and what didn’t. That retailer can teach you more about succession planning than anyone else.”