How Small Businesses Select Advisors

PROFESSIONAL DEVELOPMENT

By California Broker Magazine

CA brokers help small businesses navigate taxes, finances, and insurance policies effectively. Learn how advisors can make all the difference when it comes to establishing and maintaining small business clients. Understanding the selection process enables health insurance professionals and other advisors to strengthen their skills and market effectively to the businesses they can help the most. Learn about the seven most important selection criteria businesses use to pick advisors to help you prioritize how you work with your clients and open doors to win new business.

Types of Small Business Advisors

Small business advisors are typically experts in their fields. They provide critical support and information that business owners may not have. For example, a small business owner may know how to file taxes for their enterprise, but they may not be aware of deductions and liabilities. A tax advisor has the knowledge and experience necessary to help the business file taxes correctly with maximum savings. Did you know CCSB has the only tax credit program that fits small businesses? Learn more: www.coveredca.com/forsmallbusiness/

Expert advisors for small businesses may include:

Financial advisors
Employee health benefits advisors
Tax advisors
Risk management advisors
Management advisors
Life insurance and LTCi advisors

Of course, every business has different needs, so building your collaborative partnerships will help you be a go-to solution provider for your clients. Find trusted colleagues in finance, accounting, and HR as these areas are common for recurring problems and businesses experts in these areas to function.

Seven Most Important Selection Criteria Used to Pick Advisors

The selection criteria for a business advisor can vary greatly depending on the type of business. Small business owners may consider the following criteria when selecting an advisor for their enterprise.

1. Experience managing a small business
  A small business owner may want to look for an advisor with experience specifically in small businesses. Advisors who have firsthand experience managing or owning a small business are better equipped to understand an entrepreneur’s unique challenges. Whether they are helping with employee benefits, risk mitigation, or financial management, an experienced advisor will know how to identify and address the business’ greatest challenges.
2. Industry specialization
  Small business entrepreneurs often look for an advisor who has a deep understanding of their specific business niche. This advisor is more likely to understand the relevant jargon, business requirements, and special challenges. They may also have access to resources and connections that can help the business thrive.

“Choosing the right advisor for a small business requires a personalized approach”

For example, a coffee shop will face different challenges than a jeweler or clothing boutique. Each business has distinct supply chain dynamics, employee requirements, operating needs, and financial obligations. Not all business advisors are suitable for all types of businesses. In fact, a one-size-fits-all approach can harm the business rather than help it. Small businesses benefit from having an advisor with insight into the unique aspects of their industry.

1. Certifications, licensing, and other credentials
  Depending on the type of advisor they need, a small business may look for certifications, degrees, or licensing. Examples of credentials a business owner may seek include:
  - Certified Public Accountant (CPA) license
  - Certified Management Accountant (CMA) certification
  - Bachelor’s degree in business
  - Master of Business Administration (MBA) degree
  - Certified Professional Coach (CPC) certification
  - Certified Management Consultant (CMC) certification
  - Professional license in their area of specialization

Consultants interested in helping small businesses may benefit from obtaining additional education and training in their niche. Credentials help validate an expert’s knowledge, specialization, and commitment to providing quality consulting services.

1. Affiliations with advisory and regulatory organizations
  An advisor registered or accredited by organizations like the Better Business Bureau (BBB), SCORE Foundation, or a local Small Business Development Center can be valuable for a small business owner. Business advisors may benefit from partnering with organizations in their field of specialization, such as:
  - Financial Planning Association (FPA)
  - National Association of Insurance and Financial Advisors (NAIFA)
  - Association for Financial Professionals (AFP)
  - National Association of Tax Professionals (NATP)
  - Private Risk Management Association (PRMA)
  - Association for Supply Chain Management (ASCM)

National, state, and local professional organizations can provide support to advisors so they can better assist their clients. Small businesses can then benefit from the shared knowledge, resources, and network that these advisors bring to the table.

Recommendations and reviews from previous clients
Reputation can be a strong deciding factor for small business owners looking for an advisor. The BBB, Yelp, and other review sites can provide important insight into a business advisor’s capabilities. Reviews can provide a snapshot of client satisfaction and additional information that may not be readily available on the advisor’s website or marketing materials.
Communication style and methods
When choosing the right advisor for their small business, an owner will likely prefer someone they can connect with. The advisor’s methods and style of communication can greatly influence a business owner’s decision. For instance, a business owner who prefers open communication and regular updates may not appreciate an advisor who communicates rarely or only through periodic reports. Similarly, a small business entrepreneur with a casual communication style may be alienated or put off by a business advisor whose communication style is very formal. While there is no one “right way” to communicate, advisors can appeal to potential small business clients with an adaptable communication style. Advisors may benefit from asking about the client’s preferred communication methods and frequency from the outset.
Preparation and attentiveness
During the selection process, a small business owner may consider the advisor’s preparation and attentiveness to their specific needs and challenges. An entrepreneur can reasonably expect an inattentive or unprepared advisor to continue in the same vein. If the business owner is not confident that the advisor is looking out for their business interests, they may opt for a different expert. A business advisor can avoid this pitfall by presenting themselves as an expert with the interests of their clients in mind. They should be able to demonstrate how their knowledge and expertise can help address the challenges faced by a business. Directly referencing industry challenges can instill confidence in their clients.

Choosing the Right Advisor for a Small Business Requires a Personalized Approach

Selecting the right advisors can make or break a small business. These seven criteria can help your clients choose the best advisor for their business needs. They also provide health insurance professionals and other business advisors with insight into the unique factors that can influence a small business owner’s decision to choose one advisor over another. Ultimately, expertise, communication, and preparation are the key ingredients to craft a successful partnership between a business and its advisors.

CA brokers need to stay current with their chosen work with clients and continue to learn and grow in their personal skills and build a collaborative network including carrier reps/partners and colleagues. Many advise joining a local chapter of NAIFA or CAHIP to meet new colleagues and learn fresh ideas to bring to clients.