According to business experts, entrepreneurs should have a circle of outside advisors such as an accountant, attorney, banker or insurance agent who can provide honest feedback even if it means giving constructive criticism on the way an owner is running their operation.

Fiducial franchisee Rocky St. John meets monthly with the Colorado group of the National Association of State Boards of Accountancy (NASBA). He's been involved with that group for so long that the children of those who originally started their practices are now entering the picture in their parent's firms.

"We do staffing like an audit and review the audit procedures and consequences at the meetings," said St. John from his office in Colorado Springs. "If we run into new tax laws we discuss that and people bring resource information on it and anything that they've run into. We're always talking about unique stuff, always talking about marketing and staffing and compensation of staffing."

Fine tuning your business

Fifteen years ago, St. John compared notes at these meetings on how others in the accounting industry charged for their services and he raised his fees accordingly. He also became more selective about who he would accept as a client.

This is practice management and St. John plans to work his oldest son, Scott, who has a background in marketing and his youngest son, Kent, who works in the human resources field, onto his board of directors. His wife, Marilyn, is a co-owner of the business and assumes the role of devil's advocate.

"This minimizes the number of mistakes that I've made and kept me alert," St. John said of his board of directors' feedback.

Through the mentoring he received from his colleagues, he learned not to be afraid to ask for the order rather than being intimidated. It also changed the way he accepted information from clients.

"When I started out 27 years ago, I would take data in grocery bags or from the trunk of their car," he said. Now he stipulates that financial information be sent to his staff in a specific manner or the client will be charged at a $100 per hour rate for processing.

St. John advises his clients that there are organizations in every industry that can mentor businesses just starting up or those that have already been established. One of his clients has found a niche by teaching people how to use beads to make craft items such as belts and necklaces. She's been to various trade shows and has recently incorporated her business.

"She's more of a teacher and a coach," St. John said. "She does well because people come there to talk shop since a novice doesn't know where to begin."

Referrals are as good as gold

The route Joanna Hoffman elected to take for her Fiducial franchise in Raleigh, NC, was to have a board of advisors or a network of resources. She joined a local chapter of the Business Network International (BNI) six years ago which has been a boon for her business.

"I call on them very often to discuss my business or get information about rules and information about options," she said.

For example, one BNI member processes Small Business Administration loans so he's a great resource to go to for financing options for clients. She's found out what he looks for on a balance sheet and talks to him about credit management.

"Yesterday I talked to my insurance contact about worker's compensation insurance and what options are available," Hoffman said.

Being closely linked with the networking group gives her an added boost when it comes to referring various sources to her clients "because trust is an important part of our relationship."

"People who are our clients recognize they can't manage alone," she said. "They need to develop relationships with an accountant and an attorney."

A little feedback goes a long way

Sam Badgley, a Fiducial franchisee in Williamstown, WV, tries to get clients to create a board of directors and encourages them as entrepreneurs who are "traditionally not very disciplined."

"You lose an accountability issue that you might not have if you're an employee," said Badgley. "I encourage them to establish a board of directors with an accountant, banker and people who can be objective and aren't afraid to tell you things that are a little embarrassing like ‘last month you said you were going to do this so why hasn't this been done?' I think the feedback is helpful."

Without this kind of feedback, Badgley says owners can develop some bad behavior and aren't learning anything to help improve their business when sales are down. With a sounding board of advisors they can pinpoint why they aren't making money. For instance, a client that has an office supply and copier rental business was very family-heavy in the operational end but by bringing in non-family people they were able to become a little more objective.

"It helped strengthen their organization chart and had a profound effect on their sales and growth," he said. "They were able to deal with real facts and real issues which took away impulsiveness. Trying to commit to a board helps them from being so compulsive and has prevented impulsive purchases that weren't in the best interests of the organization."

Badgley's been in practice 16 years and had several partners during that time. Ron Christ has been a partner with him since 1988 and the two serve as a sort of checks and balances system for each other in their office.

There's still time to make a difference

In Oklahoma City, OK, Christian Brim participates in various advisory components such as the Fiducial franchise network, its leadership summit and NASBA meetings. He also holds regular board meetings which discuss timely practice issues for his business.

"I've found this makes us better having multiple shareholders as opposed to one because you have a different perspective," he said.

Brim believes meeting informally with a third party advisor like a banker on the golf course may be more effective in getting the message across when you're trying to understand how they do things.

"When you get an external board of directors if it's your business you may not want that kind of feedback," he said. Most of his small business clients are type "A" personalities so it's difficult for him sometimes to tell them things. "We have that problem as advisors," he said.

Whether it's holding a formal board meeting or getting together with your banker for some impromptu advice during a round of golf, having a professional you can bounce ideas and concerns off can make all the difference. Brim says small business owners should make it a point to schedule their mid-year reviews now because there's ample opportunity to fine tune their operations for the rest of this year.

"They still have time to affect something this year to make a difference," he said. "In October, they might have some last minute things to tweak but not a large amount of time to do it."

Making a memorable impression

A relative newcomer to the small business scene in Fenton, MI, Deanna Przekora opened her Fiducial doors last August. From the start, she knew just how essential it was to attend meetings of local chamber of commerce groups. One of the chamber groups she's aligned herself with is a home business committee where they share like-kind needs and experiences.

"It seems to be an opportunity for start-up businesses and helping them out," she said.

Przekora also belongs to a business issues committee for new business owners that provides critical information for companies opening up in the area.

"It definitely does help you to get out and meet other businesses and feel comfortable interacting with the community and the many events they sponsor," she said. "Because it's a very close community, everybody kind of intermixes."

At a morning seminar she attended this week on marketing, Przekora noted that the theme of the day was "make a memorable impression." That reminded her of a quote by renowned motivational speaker Zig Ziglar that hangs on her wall that reads: "You can have everything that you want if you help enough people get what they want."

"That's really what I'm trying to do," she said. "If I'm successful at doing that then I get what I want." 

STEPHEN PAREZO is the Media Manager for Fiducial.