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Choosing a professional advisor
Choosing a professional advisor
By Nick James on July 28, 2010
When you're buying or setting up a franchise, it's important to get accurate and useful advice. Nikolas James offers some hints on choosing the right advisors.
Franchising is a great way of doing business and it really suits Australia. However, great care must be taken in order to avoid potential pitfalls which could prove to be costly, for a franchise relationship is like being in a marriage - easy to enter and expensive to leave.
So be prepared to bite the bullet and pay for some professional advice particularly in the franchise documentation set-up areas. You need quality advice from people who actually understand the nature of franchising, so always endeavour to get the best possible advice. And, having obtained good advice, make them most of it.
How do you choose?
In choosing any advisor it is essential that you can build a good rapport with them and trust them implicitly. You will be paying them for advice, and you must have confidence in the person giving the advice.
Having said that, there is no point using, say, your family lawyer to examine a franchise agreement just because you trust them. Franchising is a specialist area, so you should shop around to choose professional advisers experienced in it. Many excellent lawyers have never seen a franchise agreement before so their advice will be superficial and off the mark.
Many excellent accountants do not understand the real value of a franchise branch and system. If you choose inexperienced people, not only will you be paying for uncertain advice - you'll be paying for them to get their experience.
So look for people with experience in franchising. Contact Franchise Management Services.
Ask for an initial meeting with your prospective advisors, sound them out and ask questions. Feel free to interview several. The important thing is that you should only appoint them to act for you once you are happy.
Value for Money
Experience and expertise costs money, so be prepared to pay a reasonable fee to each of your professional advisors. The additional cost of using an experienced advisor will be offset by the quality of the advice given; the cost of a mistake makes the cost of experience look cheap.
Most advisors loathe to work on a fixed fee basis because so many contingencies can pop up without warning. They therefore charge on an hourly basis, which you should find out. If you can't obtain a fixed price, get a written estimate of the likely hours involved with fairly rigid parameters to avoid misunderstandings.
Remember - your advisor will be on your side, by they will also want to be paid for a good job well done. Many advisors ask for some money up front, which is fair enough so do not be put off by it. The key here is to understand the basis of charging, understand the likely costs, and set money aside in your budget to pay the bills when they come in.
A Reasonable Fee
This is a tendency for people to feel that professional fees are excessive. Where this happens, this is usually because the advisor has not communicated the basis of charging or has not given accurate estimates, which means that the result is bad for everyone.
If you are not happy with the final bill you receive, you should communicate with the sender right away. Ignoring bills and monthly statements does not make them go away; it merely makes the people more determined to get the full amount.
Your advisor should put everything in writing as to likely costs, and you should be able to rely upon that. If there are unforeseen expenses, ensure your advisor keeps you informed as you go along - not when the final bill arrives. As in franchising itself, communication is all important.
Should You Follow the Advice?
The advice you receive from your advisor will be based upon their professional expertise, their knowledge of the facts in your particular instance, and their researches on your behalf.
However, whether you choose to accept the advice or not is up to you. If you disagree or don't accept the advice, then discuss it. Ensure there are no misunderstandings or misconceptions which might lead to the wrong advice being given. Sometimes a gut feeling might tempt you to reject the advice given. If you do this, be prepared to accept responsibility for your actions.
Do not expect an advisor to tell you what to do. Their role is to comment on a situation objectively and without emotion, using all their relevant skills, judgments and knowledge of the factors involved. Bear this in mind when deciding to accept the advice, but remember that the final decision is always yours.
Built on Trust
The client and the professional advisor must always trust each other to tell them the whole truth. If you want good advice, you should give them every piece of information you can and always be entirely honest about your circumstances, because their advice will be based partly upon what you tell them.
When appointing an advisor, you should have the objective of a long-term relationship with them. The longer they have acted for you, the better they will know you and your business, and the better their ongoing advice will be. People who change advisers regularly miss out on this valuable relationship.
A Necessary Good
Whatever your business, in this day and age you cannot do it alone, no matter how good you are there will always be concerns outside your own area of expertise. The ideal is to have experienced and trusted advisors who will help to make you more successful.
Professional advisers are not a necessary evil, but a necessary good. They can bring additional breadth and wisdom to the purchase or operation of your business. Select them well, use them wisely and treat them as your friends, for they are there to help.