Ever hired someone to do a job for you and regretted it? I know I have. The end result – substandard work and an outcome that was way less than satisfying. The professional service industry falls into two broad categories – qualification necessary (e.g. accountants and lawyers), and no qualification necessary. Business coaching (and consulting) falls into the latter. There is no mandatory qualification to practice as a business coach or consultant, so it’s very much a case of ‘buyer beware’.
There’s only three things a business coach should be doing for you, and if they’re not, then it’s time to ask why not. Not in any order, here they are.
Profit and Free Cash Flow
If your coach is focussed either primarily or solely on sales or without considering the impact on your profit or cash flow, then run a mile. They must have a ‘profit and cash flow first’ mentality not a sales (or revenue) first mentality. One of the worst bits of business advice I have ever heard a consultant say is ‘sales fixes everything’. It can, but only if you are running a sufficient gross and net profit margin, and your working capital absorption rate is adequate to sustain the growth.
Your coach should have an unrelenting focus on helping you drive profit and cash flow, to the point where every major business decision should pivot on what effect it has (on profit and cash flow).
If you want some more detail about this then download my e book ‘Maximum Profit and Free Cash Flow’.
Making You the Best You Can Be
A coaches role is to make you, your team, and your business the best version of itself it can be. That is, to move you forward by co-designing goals and strategies with you based around your vision, then holding you accountable for implementing and achieving them. In a business sense, this involves working with you on your vision, your leadership ability, your time management, your business management knowledge and skill sets, your productivity, and your accountability level.
We all need to be accountable to someone in order to move forward at speed. Make sure your coach is red hot on accountability, working with you on the things that really matter, and has a number of accountability tools such as an action list with due dates (Smartsheet or other), and regular check-ins or requests for updates on outstanding actions.
Making Your Life Easier
At some point your coach must make your life easier. This doesn’t mean you won’t work as hard, but it should mean that he/she has assisted you to build a high performing team (A Grade) around you that gets things done, so you don’t have to do or be across everything. This is called leverage and without it you can’t grow (profitably). Again a significant part of this is the coach working with you on your leadership ability, and assisting you with HR matters such as recruitment, productivity, performance management and culture building.
How to Choose a Coach
Like every profession, there are some good business coaches in Australia and some that probably need to find another vocation. It is buyer beware, so make sure you do your homework and look for the following:
Experience – have they worked with your type of business before and how long have they been coaching? Are they able to quickly adapt and assist you with daily challenges across a range of situations? Do they understand strategy formulation? Can they share their experiences from other like businesses that have overcome similar challenges? Do they have the experience to pull a result?
Business knowledge – do they have significant or specialist knowledge gained from previous employment or coaching that is relevant to the assistance you require? For example do they understand what drives gross and net profit and which of the profit levers to pull and when? Do they understand working capital absorption, how to free up cash flow, the top 14 criteria for effective leadership, and how to drive efficiency through a factory via lean manufacturing principles?
Communication ability – Will their personality type get the best out of you and your team? Can they facilitate a group or family board meeting? Can they train your staff across a whole range of skill sets? Can they assist you and your team with their emotional intelligence, communication skills and team collaboration? Do they have significant leadership ability to help you drive the changes you desire?
Accessibility and responsiveness – Can you contact them daily if required and do they get back to you within the day? Do they come and sit with you regularly as well as be available via Zoom, email, and phone when you need them?
Consulting ability – As with experience, can they roll up their sleeves and actually perform work for you such as budgeting, implementing factory efficiency initiatives, writing position descriptions, designing KPI reporting, performance managing staff, recruiting interviews, strategy development and HR planning?
Lock in – Beware the coach that want’s to lock you into a fixed timeframe contract such as 12 months. If they’re a good coach they shouldn’t need to lock you in. You should be free to leave the relationship if you feel you are not receiving value.
References – Ask to speak with some of their existing clients so you can check the coach out. When speaking with their clients ensure you are specific in terms of finding out what results the coach has delivered around the three areas above; profit and cash, making them the best they can be, and making their life easier.
Return on Investment!
A good business coach should also be able to give you an indication of the financial return on your investment in them, based on the current state of your business and co-defining with you ‘what’s possible’. It is very rare to receive a financial return on a coaching investment within a few months. Not impossible but rare. Normally it takes 6 plus months to get some traction and see a return, and in my experience the gold really starts to arrive for my clients sometime after year two.
As I said earlier, your coach should make sure you understand the profit and cash flow impact of every major business decision, including hiring them as a coach!