Red and green flags when selecting an advisor
The Women in Entrepreneurship group meets monthly at the Knoxville Entrepreneur Center.
When operating a start-up, building a team of highly skilled and invested advisors could be the key to success or the pathway to failure. It’s a bold statement, but it’s true. We have all heard the saying, “You are the product of the five people you spend the most time with,” and the same goes for your business. The company will be a product of the proverbial cooks in the kitchen.
So, as a first-time founder, how do you go about finding the right people? July’s Women in Entrepreneurship (WiE) meeting, hosted at the Knoxville Entrepreneur Center (KEC), provided some guidance on this topic in the form of red and green flags.
At some point in a founder’s journey, many will have to hire or work alongside an accountant, lawyer, logo designer, marketer, web developer, financial planner, auditor, or insurance agent. The panel, comprised Allyson Virden at Mid Mod Collective, Erin Reece at Bear Financial Solutions, and Rebecca Saldivar at Tootsie Food Truck, helped attendees identify some things to look for when selecting these types of partners.
Their first bit of advice is to evaluate the communication style of the advisor. If the advisor provides clear communication, promptly replies, and sets expectations and timelines, then they are more likely to be an efficient partner compared to someone who has delayed responses and unclear answers.
“I always ask my advisors and clients what their favorite form of communication is – email, text, call? If they are receptive to your preferred method of communicating, they will be a better fit for you,” Reece said. “I always try to cater to the form of communication that my client prefers.”
Another helpful tool when evaluating bringing an advisor onto your team is testimonials from prior clients. Are there any? If not, it could be a red flag.
“It’s important to hear directly from someone about the service,” Virden said. “Testimonials are a great way to see that, but they can often be misleading, too. True word-of-mouth recommendations are even better.”
As helpful as they may be, connections are not always easy to come by. Another tip from the panel was to request a portfolio of past work that reflects the advisor’s full scope of ability. It should showcase success stories and a diverse set of previous projects.
Saldivar offered some advice when it comes to reviewing those portfolios.
“You should get a clear picture of what they do well and what they don’t do. If someone says they can do it all, be wary of that,” she said. “For example, at my food truck, I do not make chicken tenders. I will never make chicken tenders, and if someone asks, my honest answer will be no.”
Even after all this advice, what if you hire someone who doesn’t turn out to be a good fit for you, your brand, and your company? The panel said, “Fire them.”
Advisors can be fired, just as clients can be fired, and regular employees can be fired. The panel advised that any wasted money during the start-up phase can be the difference between success and failure.
“Trust your gut. If you don’t feel good about this person, they nickel and dime you, and you’re not sure what you’re paying for, it’s time to cut the relationship,” Saldivar said.
The next meeting for the WiE group will be on August 13 at the KEC. Join the Facebook group here.
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