When to use a business advisor?

Business advisors can be used in a range of scenarios, and it is important business owners know when to use them. More importantly it is important they use the right business advisor for the right situations!

Using a mix of business advisors to solve problems

Generalist advisors and specialist advisors

At Royce Stone Capital we have found the best way to solve our clients’ problems is through a mix of generalist advice and specialist advice. Where we act as a general advisor, that stays across several business issues, allowing us to bring in the right specialist advisors. Simultaneously we are the specialist advisor for finance, M&A, structuring, corporate advisory, shareholder agreements, debt layering, government grant structuring and corporate governance.

If our clients require specialist advice from lawyers, accountants, restructuring experts, grant providers and bookkeepers, we have the right specialist advisors to provide solutions for them.

A key learning we have adopted, is that as our clients’ needs evolve, so should their advisors! A business turning over $10M is very different to a business turning over $200M, and accordingly different accountants and lawyers will be needed. This is to service the more complex needs of the client as they grow, but also to manage costs in proportion to the stage they are at. This also includes replacing us, once they are above a certain threshold.

When should you use a business advisor?

Business advisors are generally used in one of three situations.

Business that are rapid growly

Businesses that are rapidly growing usually suffer from a number of issues that we’ve listed below. During these times they’ll often engage a business advisor such us to help them overcome the below issues.

• They have a free cashflow issue, because they are using more capital to grow the business, than what they have available to them.
• They lack the proper internal structures, people, processes and governance to properly manage the internal growth of the business to meet demand.
• They lack the proper governance and legal agreements, whether with staff or external parties to handle the growth.
• They do not have the proper accounting or bookkeeping practices in place.
• They are using a small business mindset and approach to solving problems, rather than a medium size business approach.
• Their business solutions are short term focused, and not long term focused.
• They have not negotiated the right terms with suppliers or end purchasers.
• They do not have the right finance solutions in place, to scale with their business.
• They are not properly structured for government grants.
• They are not structured to take on investor funds.

Businesses that require a turnaround or restructure

Businesses that require a turnaround are very similar to rapidly growing businesses. In that they both have a free cash flow issue, with structural issues that need to be addressed but in different ways. Typically, a business advisor is brought to resolve the below issues, in addition to other specialist advisors.

In such scenarios all efforts are made to turn the business around, but we also ensure that everything is prepared for life after a voluntary administration or liquidation.

Typically, these businesses suffer from the below issues.

• They have numerous sources of debt, some of which is priced at very high rates.
• They have debt repayments that not conducive to giving the business breathing room.
• They have acquired businesses that are causing a loss for the business.
• They are operating an outdated business model.
• They have high tax debts and have used the money for other purposes.
• They are draining their business to live a lifestyle that does not match their income.
• They have entered loss making business transactions.
• They do not have the right people executing on the right tasks.
• Their debtors aren’t paying them on time and they have a free cashflow issue.

Businesses advisors for specialist advice

This can cover a broad range of matters, but businesses may wish to have assistance with solving specialist issues such as.

• Structuring for asset protection.
• Structuring for tax minimisation.
• Structuring for government grants.
• Corporate governance and hygiene.
• Corporate advisory matters
• Government grants
• Finance solutions
• Bookkeeping and accounting issues.

To read more about our business advisory services click here.

To read more about our corporate advisory services click here

For a confidential discussion on how we can help you elevate, contact us here.