This week, we will get into the required adjustments to shift your team to offer advisory services.

Same Team. Different race.

This past weekend, I completed the Wilderness Traverse adventure race.

It was a 150 Km (93 mi) course over 24 hours, travelling by bike, canoe and on foot.

Our team finished 26th out of the 56 teams that started, finishing in 26.5 hours.

It was exhausting but one of the most fulfilling things I’ve done this year.

This wasn’t my first adventure race. But it was unlike any other I’ve done.

Earlier this year, in May, our team completed a 75 km race. We finished that race in 7hr 41mins

It is interesting to see our race this week was only double the length of the one in May but took us almost 4X the time.

I was doing the same three sports, with the same equipment and with the same guys, but the cadence, focus, and mindset were significantly different.

We had to adjust many things, even though just one race variable changed.

Here’s my point: To do well in one race can be entirely different than another.

When it comes to your firm, starting to offer advisory services with your existing team, clients, and market presence requires significant adjustments.

Not so much on your firm’s tech and team but on priorities and objectives.

What works in one firm and service type will not work in another.

Here are three missed priorities when transitioning from offering compliance to advisory.

Education

When you offer compliance, there is no time (and usually no point) to educate the client.

You get the info you need, prepare the work and move on.

With advisory, your value cannot make an impact without education.

Each advisory encounter should equip the client with deeper education and understanding.

Good advisory educates the client to be permanently better at running their business.

The required adjustment:

Be upfront in your engagements about what your role is: An advisor and educator.

Build in time and budget for client education in your engagements.

Cash flow projections are not advisory services. It is a tool to educate your client about the cash levers in their business.

Time Horizon

Compliance has a fixed time horizon.

With compliance, you complete the work based on a deadline. There is no value provided after that deadline.

Advisory has no deadline. Its time horizon can be until the end of life for the business.

Advice and conversations should have 2, 5, 10 year perspectives.

Good advisory presents and helps balance short-term needs against the long-term restrictions imposed by those needs.

I used to think 5 year projections required by VCs for startups were dumb.

I mistakenly viewed their preparation and predictability as I did annual budgets. What was the point of wasting time making pie-in-the-sky projections?!

But 5-year projections aren’t for predictability or testing viability; they’re for creating and extending the business operator’s vision.

The required adjustment:

In addition to any short-term rolling forecasts, help them to maintain a 5-year outlook.

Track revenue, headcount and profit. It forces them to think about the future, not just the week’s minutia.

This is an exercise that most business owners never do.

If they can’t put a basic framework around what they want in 5 years, there’s a high probability they’ll stagnate where they are.

Achieving 5-year goals usually starts with today’s actions and intentions.

Accuracy

As a compliance firm, if you don’t get at least 98% of your engagements correct, you’ll be out of work quickly.

You have to be accurate and correct. That’s it.

Advisory is not like that. There is no objective ‘right’.

There are best practices and good general biz advice.

But what doesn’t get said enough is that your clients pay you, so they make fewer choices incorrectly.

Good advisory is not so much increasing profits but identifying and mitigating business risks during business transitions and growth.

The required adjustment:

Give yourself some grace and space as you advise your clients.

If you and your clients get 60 -75% of your decision correct, you’re doing better than most businesses.

Build a personal relationship with your clients so they know you are human and that your advice won’t always be perfect.

But assure them that the advice will be rooted in good data while balancing their appetites and motivation.

Good luck with the race.

Mark