Do I need an independent adviser before looking for finance?

This article focuses on the role of independent business advisers and mentors, looking at how they could help your business, rather than financial advisers.

Finding the right finance is a huge step forward for your business' growth. And like with any important business decision, you're probably in the market for valuable advice before you make the jump.

That's why many entrepreneurs consider finding an independent adviser to help not just with your search for finance, but the process too.

Advisers come in all shapes and sizes - from paid-for pros to key contacts or networks. Which is why it's so important to consider exactly who you want to have by your side. The best advisers can bring valuable business contacts, with useful experience and specialist knowledge that may be missing from your repertoire.

But choose the wrong person and they could become an unnecessary distraction, costing you both time and money.

So how can you avoid the pitfalls? And what characteristics should you look for in an adviser who can help you grow?

A decision that could pay off further down the road

Most successful business owners will tell you they wouldn't be where they are now without the advice of an individual or mentor. That's because successful businesses often start with a good partnership.

When it comes to building valuable connections, it can pay to play the long game. Choosing an adviser is an opportunity to develop a long-term relationship which could establish indirect paths to finance. It's a chance to get to know a potential business partner and secure investment further down the line.

If this is your approach, ask yourself, 'can I work with this person regularly?'. You don't have to become best friends, or even get on, but it certainly helps.

Do you trust them to take an interest and offer balanced advice even in a few years' time, when your business could look very different to how it does today?

Look for someone who brings unique value to your business

It's tempting to go for recognisable names when you're looking for advisers. With the right people around you, you can earn credibility in the industry, and you'll also attract the attention of potential investors - particularly useful if you're considering Angel Investment - if you work with a well-respected adviser within the industry.

If you’re already talking to those key industry players, that shows you have the ambition to scale. They may not be investing, but just having them around gives you credibility in the industry. Jenny Tooth CEO @ UKBAA and Angel Investor

But be wary of appointing advisers for their name only. Remember that this relationship has the potential to blossom into long-term support, so it's worth choosing someone with an authentic belief in and understanding of your business.

The most important thing to consider is your business' needs. Understanding the gaps in your company - where you're lacking skills or knowledge - will help you make the most of any new relationships.

Could you benefit from a PR specialist for marketing advice? Someone with more technical or financial experience? Or maybe a 'wise old head' who's been there before and can pass on greater industry knowledge?

Look to your peers for advice. You'll learn a lot from other entrepreneurs who have recently been through the same process. Get to know founders who are only one step ahead of you and you'll also benefit from building connections in your network.

Paying more doesn't always mean you get more

Once you've found the right adviser for you, that's when you can decide on value. There's no hard and fast rule about the cost of an adviser. They can be cheap or expensive, and many expect some sort of retainer as a sign of commitment.

Informal advisers can be really powerful and don’t cost you a lot of money. There are a lot of people out there who have been successful and want to give back and help other entrepreneurs. Part of a successful ecosystem is founders giving back and sharing that experience with others. David Mott Chair of the Venture Capital Committee @ BVCA

Your starting point should be how much an adviser can add, rather than how much you have or are willing to spend. You may conclude that a larger expense or a more experienced adviser will pay dividends. But you may also find that you don't actually need one at all. And that's ok too.

All things considered

Choosing the wrong adviser could be worse than not having one. Even when considering some of the more complex finance options like Venture Capital, one of the most common myths is that you need a good corporate adviser to help you get anywhere. This often isn't true.

You don’t need a corporate finance adviser to introduce you to VCs. Lots of entrepreneurs do it successfully themselves. David Mott Chair of the Venture Capital Committee @ BVCA

Whether you like the idea of going it alone or embracing independent guidance, choosing an adviser is a unique process for your business.

Work out what success looks like to you and you’ll find people who are willing to invest their time, expertise, and maybe even their money to help you grow.

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

Making business finance work for you

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.

Read the guide to making business finance work for you

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