Business tips: don't trust professionals

Remember the track “Everybody’s free (to wear sunscreen)” by Baz Luhrmann? In the song there is a line “Do not read beauty magazines, they will only make you feel ugly”.

Well it’s the same with professionals, don’t listen, they will only give you heartache; or worse.

At the end of this article, I am sure you will think: “Who does he think he is?!” I promise you, this is all true.

“I will ask my bank manager”

How many times have you heard this statement when someone is talking about starting their own business? The question is, what experience has the person you are approaching in self employment, marketing, sales, purchasing, recruitment and all the other disciplines essential to starting and running a successful firm?

The answer is fuck all. If they are young, they are probably a graduate virtually straight out of university and as worldly wise as a pack of organic pinto beans.

I have had the misfortune of being allocated an individual like this in the past. I couldn’t believe when they started to talk to me about what I “needed” to do; my cheese plant would have given me better advice.

If they are older, they are more dangerous, having greater, perceived gravitas. A young person may believe them and do what they recommend; potentially fatal.

Now, they are encouraged to sell additional services, such as factoring and insurance the purveyors of which are, of course, wholly owned subsidiaries of the bank. My advice is shop around.

So, what are bank managers good for? Well they can facilitate lending money to you which can assist you in setting up, or expanding your business. Of course, this is easy providing that you don’t need it in the first place. let me explain.

Before banks lend you money, they need security in case it all goes wrong. The amount of security is vastly in excess of what you need to borrow, plus the valuation usually stinks. In the past good security in the banks eyes has been property, and look what’s happened there.

A good bank (and manager) will lend on your business and it’s cash-flow, but these are rarer than hens teeth. Even rarer are bank managers with any sort of power or discretion.

“Ahhh, you need an overdraft facility of five pounds – will need to refer the request to regional office. Can you provide a cash-flow forecast for the next 40,000 years? Naturally will require personal guarantees plus taking your youngest sister as security; is she a virgin?”

Remember, any bank manager that you speak to is likely to had been wholly or partly involved in the repossession of someone’s house due to defaults on a loan, or overdraft; they are very, very good at that.

“I will ask my accountant”

Accountants are strange beasts indeed as you would expect them to have been trained in business. Not the case, they have been taught to create near useless bits of paper called profit and loss/balance sheets plus understand the rudiments of UK taxation. When it comes to running a business, they unfortunately have the same level of expertise as bank managers.

I have been through, at one stage or another, all the top firms of accountants. When dealing with a large practice, being a small firm or individual start up, you end up dealing with low level people for top money.

It’s better, in my opinion, to use a small/medium sized firm where you can secure the services of someone at partner level.

Accountants though can be useful, as they can deal with our friends at HM Revenue and Customs.

A great accountant can save you tens of thousands by recommending the correct type of business structure and ways of best using your accounts.

But for the love of God (whichever brand you do or don’t believe in), don’t ask them any questions like “Do you think its a good idea?” or “How would you do it?”. If they give an opinion at all, it will be pre-qualified with disclaimers and if they do it is likely to be total tosh.

“I will ask my solicitor”

Perhaps the very worse of the lot, solicitors feed on your misfortune.

It is rare that you will go to a solicitor for business advice, but if you are even thinking about it, don’t! All the above applies and more.

The temptation is to try and resolve an issue by using a solicitor; just think about divorces that are normally OK until lawyers become involved.

In the past, I have approached them to sue another party on “a matter of principle” – fatal. It will always cost you money, lots of money. I have also used them to sort leases, convey property, structure financial deals all of which they do with varying levels of competence.

On occasions, however, a great lawyer can be very useful indeed. I once was taken to court by a firm of accountants for non payment of fees that I didn’t owe – long story. I fortunately had the benefit of 'Legal Protection Insurance’ (totally essential in any business in my opinion). My solicitor recommended a barrister who turned up at court and tore the other side to shreds in about five minutes. Great thing to watch, even better when the judge awarded me damages and they had to stand the total legal fees – nice.

But please, don’t ask them to give you advice on starting or running your business.

The rest

Surveyors, estate agents, insurance and stock brokers, can all cause trouble in their own little way. So I always suggest not to trust any of them until they have proven, over a number of years, that they actually know what we are doing.

So who do you trust for business advice?

Ask a successful entrepreneur that has done it before, or better still, doing it now. Not one, but loads across an array of different businesses.

The enterprising greengrocer, the successful garage owner (there are a few still around), the dynamic bookseller – there are loads around. Call in or telephone and ask to speak to the owner; many of them will be delighted to give you the benefit of their experience.

Take it all, stick it in a big cauldron, boil it up along with a large dollop of your ideas, regularly taste and add bits and pieces to get it just right, then serve it up to your customers and clients and see what they think.

Finally…

It’s not all bad, over the many years of being in business, I now have a posse of firms that are reliable, good value and provide excellent advice in their respective fields. But even now, I never ask them anything about creating and/or running my business.

The next time you are in front of one of our revered professionals, ask them what business experience they have and how they are qualified to advise you on your business and see what they say.