Friends tell you what you want to hear. Advisors tell you what you need to hear. When the message is the same from both, you don’t need the advisor anymore. In that sense, you should think of an advisor more like your mentor who has done all he can. You always need the friend.
Also don’t confuse a business advisor with a business coach. An advisor’s aim is to teach you what to do and how, in specific situations, unlike a coach who helps you develop your generic skills for deciding what to do and how. The advisor helps the entrepreneur fill an experience gap, and a coach helps fill a skill gap. Both may be required.
Before you are ready for an advisor, you must know yourself. Have you assessed your strengths and weaknesses? What are your goals? Where are you heading? Unless you know these things, no one can help you. Also, you need to be prepared to take advice and criticism if it is honest, helpful, and given in a friendly way.
Once you are ready, what are some attributes of a good advisor that you should look for? You need someone who:
Applies pragmatics to your ideas. Most entrepreneurs have lots of ideas. Some can be put into practice easily, but others will be off-the-wall and need refinement to implement. A good mentor will have some knowledge and some perspective on almost every business subject, which compounds their effectiveness.
Challenges your accountability. Entrepreneurs tend to be driven by the crisis of the moment. As such, it is easy to neglect the real priorities of growing the business. Sharing your goals with your advisor means that if you don't complete them, you have a credible voice to remind you and help get you back on the right track.
Able to extrapolate the business. A successful business never stands still. You need a constant stream of ideas for scaling and expanding, with a realistic understanding of the costs and resources required. Then, there is the exit strategy which needs planning, connections, and forethought.
Has the contacts you need. When you need contacts for investors, equipment, and legal or accounting advice, your mentor has the contacts and knows where to find the information. More importantly, the advisor tells you what you need to do to build and maintain your own list of contacts.
Provides perspective as someone from the outside, looking in. An advisor knows what to look for, and sees what your customers see. It’s natural to become so immersed in your business that you forget to step back and look in from the outside. Like living next to the railroad tracks; after a while you don't hear the trains.
How do you find a person who meets these criteria? Sometimes an advisor just appears naturally, but continues to network among friends and colleagues. Look for a person who could be a good role model, someone who has the skills and personality that match your chemistry.
This person could be a professional who does this for a living, or a role model in a related business who is willing to help you. An ideal candidate is someone from the Boomer generation, who is semi-retired, but still active in local organizations or the investment community.
I don’t mean to imply that an entrepreneur needs an advisor more than a friend, just that friends are not normally positioned for double-duty as mentors. You need at least one of each, and the ability to tell the difference.
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