Recently a professional association newsletter covered the subject of stepping outside your area of expertise (the advice was, “don’t do it, no matter what the fee”). There are very few people who haven’t learned this lesson the hard way. Smart people only need to learn it once.
I realized early in my consulting career I’m not good with startups, business plans, or raising money. So, I don’t do it. In my buy-sell world I don’t work with clients looking for deals on micro-businesses, such as dry cleaners, delis, C-stores, etc. I also don’t work on middle-market deals as the investment bankers have much better resources than I do for them (and they are great referral sources for deals too small for them).
I wish someone had told this to a Bellevue law firm where it appears they have absolutely no experience with buy-sell deals but yet are advising clients on a deal (I use the words “it appears” to be nice, this firm is incompetent when it comes to buy-sell, I think most of their contract language was copied from a text book).
At the same time I’m doing some pro bono work, helping a friend who wants to buy a sports pub. While it doesn’t appear the business is “on the market,” there is a commercial real estate agent (supposedly) helping the owners with the sale. It’s obvious this is not his field, as he has NO idea what the heck he’s doing.
The only thing he’s done so far is send over a handwritten note stating what the sellers “best and final offer” is. Oh, he also forwarded one year’s financial information, when asked for it, after stating the price. When asked about the financials he told me, “I didn’t look at them, I just put them in an envelope and gave them to you.”
Did he think all he had to do was send over the price and some financials and get a deal, i.e. just walk us through “the property”? BTW, I don’t mean to insult competent commercial real estate agents by implying all they do is show a property and get a deal. They do a lot more.
There’s a lesson here, isn’t there? Do what you’re not qualified for and you will:
- Get in trouble with your client.
- Build a bad reputation.
- Risk a lawsuit.
So why do we all keep running into people who take on things they shouldn’t touch with the proverbial 10-foot pole?
The answer is simple; it’s the lure of the lira, the glitter and the glory of the guinea, the romance of the ruble, the feel of the franc… (credit to Monty Python and their Money Programme skit).
Translation, to some people any client/customer is a good client/customer. Well, no, absolutely not. The only thing worse than no customer is a bad customer (a paraphrase of my buy-sell line, the only thing worse than no deal is a bad deal).
No matter what your business, keep this in mind. Realize you have to screen customers as much or more as they screen you. In the long run it’s worth it.