Advisers play a huge role influencing decisions when growth is so fast that it is getting hard to cope.
Small-business owners in that fortunate situation have vital decisions to make at that time or they could risk disappointing customers and watching their success slip away.
One natural urge for many will be to bounce ideas off friends and family. Those in business networking groups such as Young Presidents Association (YPO), Forum for Women Entrepreneurs (FWE) or Entrepreneurs Organization will have a natural leg up with plenty of associates with keen business minds.
The other main option is to go to a consultant or a large consulting firm.
Bombay Browbar co-owner Ravy Mehroke was prepared to expand from one salon and six staff in 2010 to three salons and 35 staff today.
Before she launched the fast-growing eyebrow-sculpting salon, she made a point of going to an event where entrepreneur Judy Brooks would be speaking.
Mehroke struck up a conversation with Brooks, who founded, grew and sold blow-dry salon chain Blo. She then asked if she would be able to keep in touch with Brooks as an unofficial mentee.
Once business at Bombay Browbar clicked into high gear, Mehroke was able to hire Brooks as an adviser.
That helped her put systems in place to ensure that rapid growth did not impugn service to customers.
Lift Strategies principal and marketing consultant Jen DeTracey told Business in Vancouver that systems are vital with rapidly growing small businesses because it is so easy to descend into chaos.
“Things can fall through the cracks because they are so swamped,” she said. “You could have a high-growth business but if you upset customers or if they have a bad customer experience [the venture can quickly unwind].”
Mehroke co-founded her salon chain with her husband, Ranbir Mehroke, and her sister Amy Minhas. By 2011, when the salon was starting to show real signs of success she also brought on another family member, brother Nardip Minhas, as an investor.
Minhas brought more than capital. He has an accounting background and was equipped to help Mehroke scout options for best ways to raise future capital.
The strategy of seeking help from family has worked for Mehroke but it has its pitfalls for entrepreneurs who are not careful.
“You’ve got to be very careful with seeking advice from friends and family,” said Ian Smith, vice-president of mergers and acquisitions at EY’s Vancouver office.
“You’re really excited about your business and they will want to share in your excitement. They might tell you to go for a second or third mortgage and to be sure to keep 100% of your business instead of bringing in a partner who brings both money and experience to the table.”
Smith said paying an external adviser to listen to business stresses may also save a marriage because the entrepreneur will not bring home the stresses to unload on a spouse.
One affordable way to get quality advice from business people, he advised is to join the Executive Committee (TEC). There, business leaders get divided into groups that are chaired by a particularly seasoned contemporary.
“Joining a TEC group is about $8,000 per year and that’s got to be one of the best investments you can make,” Smith said. •
