Last week I met with an entrepreneur whose young company has a validated business model and revenue model and a group of angels ready to invest. She handed me a sheet of paper with the names of three accounting firms on it. “Which one of these firms should I use?” she asked. My answer may surprise you.
I quickly looked at the names on the list and handed it back to her. I was familiar with each firm. My response was, “Each of these firms can provide accounting and tax expertise, but you should expect and demand more, much more, not only from your accounting firm but from all of your service providers”.
All of your service providers should be providing value-added services at no additional cost to you. Quite frankly, service providers are a commodity, we’re generic. There are more than 4,000 lawyers in Boston, probably as many accountants, many more consultants, and many thousands of bankers, insurance brokers, employee benefits providers, commercial real estate brokers, and… Recognizing that service providers are generic, the key question for all entrepreneurs is, “What are those additional services that I should expect that will be so compelling, my service providers will become indispensable?”
The answer is: advice, guidance, and solutions to my biggest business challenges.
The Top 5 Challenges
The clients I work with are early and mid-stage, rapidly growing tech companies. When I ask about their biggest business challenges, entrepreneurs almost always respond with issues related to just 1 or more of 5 topics:
- Marketing
- Sales
- Finance
- Building both inside and outside teams
- Raising money
As service providers, with particular areas of expertise, we may not all be able to provide advice and guidance on all of these issues but it’s an enormous value to be able to provide advice and guidance on issues like:
- maintaining focus and targeting particular markets,
- sales leverage
- sales and distribution strategies and
- revenue models
At a minimum, we can certainly provide introductions to those in our networks with enormous expertise in these areas.
Making Introductions
The old adage is that financing sources will more often fund a stellar team with a good product rather than a good team with a great product. Building a stellar team is a necessity. Helping entrepreneurs build their inside and outside teams should be a given for every service provider. Opening our networks and making introductions is one of the most valuable gifts we can give, whether to
- “star” salespeople and engineers
- entrepreneurs with track records of success, individuals who have walked in the shoes of the first-time entrepreneurs, who can help avoid common pitfalls and can provide guidance and mentorship to increase the probability of success
- candidates for Boards of Directors and/or Boards of Advisors who are incredibly important to the success of every entrepreneur
And last but certainly not least, it’s of enormous value to provide guidance to an entrepreneur on a
- business model
- revenue model
- financial projections and
- slide deck in preparation for financing.
Once all of these big “puzzle pieces” are in place, making introductions to the “right” financing sources is invaluable.
Every entrepreneur should expect value-added services and every service provider should be indispensable.