Advice worth the price

While some people might think that the current construction ‘boom’ gives builders a licence to print money, the reality is very different. Seeking advice from the right place can help your business take advantage of the opportunities available to it

The talk about a ‘boom’ period for the construction industry is born mainly out of the Christchurch rebuild and continued growth in Auckland.

However, working in a challenging industry such as construction during a high-growth period doesn’t make running your business automatically easier. In fact, due to the pressures of quoting, tight deadlines and a highly competitive market, it is often just as tough as during a downturn!

Steady as she goes

Despite the good times, we are still seeing the collapse of a large number of firms in construction or related industries.

It seems that every month another medium-to-large firm has gone into liquidation, catching many people by surprise. The reasons for this are varied but, undeniably, a major contributing factor is that the owners have taken their eye off the ball and lost sight of what made their business great to begin with.

They may have grown too big too fast, or bitten off more than they can chew and, all of a sudden, they’re closing their doors.

How do I avoid this?

It is an undisputed fact that small businesses succeed due to the strength of the owners. All of us have our own weaknesses, but often they are not as obvious in small business, especially when the core business can take care of itself.

Once a business starts to grow, many owners find themselves stepping out of their comfort zone and dealing with issues that they don’t know the answers to. This can become a crucial turning point for a business, as the owner spends more time focusing on weaker areas (for example, studying up on changes to law).

What inevitably happens is that the owner ends up not having as much time to play to the strengths that got them to a strong position in the first place. While the business may continue to go well, it doesn’t go as well as it could.

Advisory boards

An advisory board can help guide business owners in key areas that have caused them concern and stress, such as:

• Financial reporting and analysis.
• Prospecting and selling services.
• Keeping up-to-date with law changes.

Whatever area your business needs help with, building a board of experts tailored to meet your specific needs can greatly help. Such a board is usually made up of industry experts (such as a business mentor or a previous boss), an accountant and a lawyer.

If there are other people required, such as sales experts, include them as well. At monthly meetings, run through a set agenda of items that the business needs to focus on and work towards providing solutions. The upside to this approach is immeasurable. While there is going to be a cost involved (we recommend negotiating this upfront) having access to expert help is invaluable.

You will be able to tap into other industry experts who have been through similar situations. This means that plans can be formulated in advance to avoid any potential problems.

It also allows the business to change from being reactive to proactive – identifying in advance potential issues that the owner may never have considered and ensuring that they are effectively addressed.

This advisory board strategy is applicable to any stage of a business’ lifecycle – be it start up, growth, maturity or exit.

While the advisory board may change according to requirements and phases, the result is always the same – the business receives ongoing expert advice and support.

For details of your local Crowe Horwath office, go to:
www.crowehorwath.co.nz/locations or telephone 0800 494 569.

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The information contained in this article is general in nature and not intended to be personal advice. 

If you would like to find out more about how an advisory board can work for you, contact Peter van der Heijden at peter.vdh@crowehorwath.co.nz or your local Crowe Horwath advisor.