August 1, 2007
Wall Street-quality advice: a missing piece in the inner city small business puzzleBy Tim Ferguson, Founder, Chair and Managing Partner
Every effective business leader needs a sounding board: a trusted advisor who provides frank, constructive input and guidance on day-to-day operations and long-term strategy. Larger firms typically have deep resources in this area, with in-house experts and easy access to outside analysts, strategic consultants, management experts, and investment bankers. Even more important, however, these CEOs have longstanding, wide-ranging networks, both formal and informal, of current and former peers who share their unique experience and insight.
While small businesses have just as much need for this high-quality input, they often have very limited access to it. Even those on the high end of the “small business” scale – up to $100M – struggle to identify and tap the right resources. Their founders have grown the businesses alone and their management teams often lack deep domain expertise. As a result, they are intensely engaged in daily operations and may not spot critical opportunities for growth and expansion.
What they need and where to find it
Before they can tap high-quality financial advice, small business owners must first recognize the need for input and then work out a way to access it. Often, however, they fail to realize when outside advice can help them to manage and plan for growth. Their instincts are good and they are highly skilled in managing the business on a short-term basis. But they need to “get out of the now”, however briefly – to disengage from day-to-day pressures and look to the long term.
A small business usually can’t get the help it needs from the sources tapped by larger businesses. To begin with, a small business needs advice that is highly customized for its size and market – not just a scaled-down version of what’s provided to larger businesses. In other words, small businesses need advice that is both qualitatively and quantitatively different. A small business poised for growth also needs ongoing support from advisors who are invested in their long-term interests. This skill of focusing high-quality advice on small – but growing – businesses is in great demand but short supply in today’s small business market – especially in the inner city. Implementation management is even scarcer.
