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You have inherited or are underwriting a company, and the team inside it is either a cost centre, a diligence risk, or the lever that closes the gap to your exit thesis. You do not have the luxury of learning the craft. You have to judge it, and then decide what to do about it. That decision is worth more than any single hire, because it moves EBITDA, integration speed and multiple at the same time.
There are over 800 thousand management consultants in the US alone. While large enterprises can leverage the services of titans like Deloitte, McKinsey, KPMG, Accenture, Bain & Company, portfolio companies operate with different budgets compared to the average size of a US government contract exceeding $4.5M. The bill matters less than whether the engagement converts into enterprise value you can bank at exit.
At any stage of a hold, you face strategic obstacles with multiple ways out. Gauging the right path forward is an expensive exercise, in wasted quarters more than in fees, that could easily turn into a value-creation engine working with the right business advisor.
Some of the recurring challenges I’ve worked on with my portfolio of clients are:
- Tapping into new markets (new personas or ICPs, launching new products and solutions, repositioning, moving up market, pricing, exploring new channels), which is the revenue-growth half of most theses
- Management issues (lack of proper frameworks and organizational systems to keep everyone on the same page, facilitate onboarding, handle vision and core values, set roadmaps and sprints, gauge efficiency, handle PIPs), which is what slows integration and hides key-person risk
- Digital transformation (migrating traditional businesses to the digital landscape, from positioning through SEO to lead generation, bootstrapping demand generation campaigns and developing playbooks for new hires and contractors)
- Revenue targets (refining the current business propositions, analyzing the total addressable market, interviewing ICPs, exploring new areas for growth, repositioning existing solutions to match a broader or higher ticket audience, setting benchmarks for growth)
- Optimizing profitability (increasing operational efficiency, automating processes, introducing tools and solutions that streamline workflows, reducing overhead and the margin of error, working on an economy of scale, strategic partnerships and long-term discounted deals, finding the right contractors), which is EBITDA expansion in plain language
While the list goes on, the summary is simple:
Sponsors want revenue growth, expanded margins, dependable cash flow, a team that retains its talent, and protected intellectual property, all while mitigating the risk of legal and tax surprises that surface in diligence and reprice the deal.
Hire me as your business advisor
Sounds familiar? Keep reading.
Why sponsors bring in an advisor at all
Advisors and consultants work with a portfolio of clients, manage multiple companies, and/or sit on boards. Their broad overview of the business ecosystem provides insights into what works and what doesn’t, which is exactly the pattern library a board wants when the same operational failure keeps recurring across a portfolio.
Tech businesses can benefit from non-tech consultants. Running a business is rarely about tech alone. There’s recruitment, branding, marketing, sales, business development, positioning, pricing, building successful funnels, PR, networking, legal, and finances among many others. A CTO who can translate all of that into EBITDA impact and diligence risk is worth more to the deal than one who only reports engineering activity.
Others discredit consultants for not owning an actual business (or any business at all). In some cases, consulting a company with 1,000 employees would otherwise require a similar background as a business founder. It is extremely complicated and just a handful of people have ever done that. The test is not whether they own a company, it is whether their advice survives contact with your value-creation plan.
The decision this drives: before you fund a full-time executive search, buy a short advisory read on whether the team you own is fixable, replaceable, or already good. That answer changes what you spend for the next year.
What do business advisors do across the value-creation plan
Here are the ten business advisor skills a portfolio company benefits from, framed as the jobs they actually do for the deal:
- Creative Thinking Skills
- Problem-Solving Skills
- Communication Skills
- Negotiation Skills
- Sales and Marketing Skills
- Financial Management Skills
- Strategic Planning Skills
- Management Skills
- Time Management Skills
- Public Relations Skills
Read the list as advisory skills that either grow revenue, expand margin, or reduce risk. The business advisor skills that do none of those are decoration. Below, each one is scored against that standard so you know which to insist on when choosing the right business advisor.
1. Creative Thinking Skills
Lots of unique business problems come up for growing companies. Some hit a plateau at some point and need external advice to approach these problems creatively and keep scaling. For a sponsor, that plateau is a stalled growth curve inside the hold period, and it is what turns an aggressive thesis into a flat one.
These problems, unique as they are, need to be viewed from a creative perspective because most of them lack existing data or studies that will guide you in making decisions.
Creative thinking skills help the advisor:
- analyze your situations and problems at hand.
- structure a plan with clear goals
- explore out-of-the-box ideas
- come up with relevant solutions to a specific problem
- communicate solutions effectively
What consultants do is lean on their intuition for out-of-the-box ideas and innovations. They also gather up a think-tank from the different departments of a company so you can get a fresh perspective and an inclusive approach. The decision this drives: ask the advisor for the second and third path to your revenue target, not just the obvious one. If they only see the plan you already own, you are paying for agreement, not insight.
2. Problem-Solving Skills
The ability to handle difficult situations that are usually unexpected and complex in nature is what problem solvers have.
What makes most business advisors effective is their inherent penchant for solving problems that others would keep away from as much as possible.
To be great at problem-solving, you will need an analytical mind that is good at critical thinking, organizing ideas, and identifying patterns, as well as noting details. This is one trait consultants and business people share in common because most of the time, those who have decided to run or start a company are those who thought of a problem they wanted to solve.
According to Lifehack, you can take the following steps to enhance your problem-solving skills:
- Focus on the solution, not the problem
- Adapt ways to define the problem clearly
- Simplify things
- List out as many solutions as possible
- Think laterally
- Use language that creates a possibility
By cultivating problem-solving skills and encouraging it among the core group in the workplace, the company addresses its own operational risks before they become covenant or forecast problems. The decision this drives: give the advisor the ugliest inherited issue first, the one nobody in management will touch, and judge them on whether they scope it into a fix with an owner and a date.
3. Communication Skills
According to Workforce, 60% of companies don’t have a long-term strategy in place for their internal communications. Business operations falter when communication channels are broken or ineffective, and for a sponsor that shows up as slow integration and management reporting you cannot trust. When all of a company’s stakeholders value proper communication, it results in the following:
- stronger relationships
- more innovations
- efficient team processes
- better customer experience
- growth and transparency
Consultants must be excellent communicators to successfully land a client. The job requires that they manage teams, deliver presentations, and coordinate. Failure to do so may cause a project to stagnate or the client to leave. The decision this drives: hold the advisor to the standard that the board should be able to read the situation from their update without a translation layer. If you need a call to understand the memo, the reporting is not fit for a hold.
4. Negotiation Skills
While you can learn how to negotiate over time, the most successful deals often happen when you involve a great negotiator. What separates a great negotiator from the rest is experience. In a hold, that experience shows up in vendor contracts renegotiated, renewals held, and terms that flow straight into cash flow.
You may have found yourself more than once on the receiving end of the negotiation table, being subjected to hard-bargaining tactics such as the following:
- extreme demands from aggressive opponents
- “my hands are tied”
- “take it or leave it”
- good cop, bad cop
- bluffs and lies
Having effective negotiation skills has a lot to do with a person’s communication skills. Those who are experienced at negotiating know how to say the right words at the right time. One must know how to package an offer in a way that is appealing to all parties, but actually more favorable to you. The decision this drives: point the advisor at your largest recurring spend line first, because a point of margin recovered there is realized value you keep every quarter of the hold.
5. Sales and Marketing Skills
Learning about sales and marketing became a need for me when several of those I had worked with in the past failed to deliver their basic commitments. Consultants I have talked with via Clarity were the most helpful during that time. I also got a lot of help from other business and agency owners who went through a similar ordeal.
In another article, I have enumerated 4 ways a business executive can become a better marketer:
- Read and learn
- Explore different marketing channels
- Work closely with your marketing team
- Find a freelance client in need of marketing
Although selling is a different activity from marketing, your sales skills and marketing skills often get intertwined because they both revolve around convincing prospects to get so interested in the products and services that you offer to the point where they would actually make a purchase. For a portfolio company this is the top of the revenue-growth thesis, so the skills to grade are:
- Product Knowledge
- Communication skills
- Prospecting Skills
- Relationship-Building Skills
The decision this drives: make the advisor tie any go-to-market recommendation to pipeline that converts to run-rate revenue, with the assumptions stated. A campaign plan with no revenue line attached is activity, and activity is not the outcome you underwrote.
6. Financial Management Skills
Allocating resources for operational expenses without neglecting overhead costs and potential risks requires serious financial management skills. Not all portfolio companies have the luxury of a deep finance bench, and the gap tends to surface as unreliable forecasts and a quality-of-earnings surprise you did not price.
Financial consultants review past data and study future projections as well as create investment plans. According to Investopedia, successful financial advisors share the following qualities.
- Passion for Financial Planning and Wealth Management
- Deep Analytical Ability
- Professional Salesmanship
- A Belief That Interests Must Be Aligned
- Curiosity
Navigating around financial challenges usually takes the same qualities and some detective work on the part of the owner or executive. The decision this drives: an executive business advisor who can tighten forecast reliability and cash visibility protects the covenant headroom and the exit story at once, so grade this skill on whether the numbers they hand the board hold up under a QoE lens, not on how the model looks.
7. Strategic Planning Skills
A strategic business advisor earns the title on this skill. Solopreneurs must think like a 10-person team from the start, and a portfolio company must think like the platform it is meant to become by exit. Planning this way positions the business for the multiple you underwrote.
Studies show that 95% of a typical workforce doesn’t understand their organizational strategy. Several organizations fail to employ a strategic approach in their future direction resulting in problematic transitions and misalignment among team members, which is exactly the drag that stretches a hold period past plan.
You can use a strategy map as a graphic representation of the strategies you have discussed with your planning teams in consideration of the following four perspectives:
- Financial
- Customer
- Internal Processes
- Organizational Capacity
Here’s what a typical strategy map looks like:
Note that the more stakeholders or teams involved, the more encompassing your strategic plan development will be. The decision this drives: require the plan to name which lever each initiative pulls, revenue, margin, or risk, and drop anything that maps to none of them. A strategy the team cannot recite is a strategy that will not survive the hold.
8. Management Skills
According to research conducted by Gallup among 7,272 U.S. adults, 50% of employees leave their companies because of their managers or supervisors. In a portfolio company, that attrition is key-person risk and lost institutional knowledge, and it reprices the asset at exit. A business management advisor who fixes the management layer protects both retention and continuity.
According to American psychologist Robert Katz, there are three basic types of management skills and these are:
- Technical skills
- Conceptual skills
- Human or interpersonal skills
Technical skills or technical leadership refer to the manager’s ability to use machines and software, production tools, and other equipment but also the skills necessary to help the other aspects of managing a business.
Managers who can see the bigger picture and design solutions accordingly have what we call conceptual skills.
Last but not least, interpersonal skills are very important in relating with and motivating your employees. This particular type of management skill maximizes the value of a company’s human resources when honed properly.
Interpersonal skills are what enable managers to relate with their employees effectively. If managers have a healthy relationship with their employees, then the employees become highly motivated to work. The decision this drives: inspect voluntary attrition by team and the depth chart under every single point of failure. Where one departure would stall the roadmap, fund a backup now, because that is risk avoided you can defend in the exit narrative.
9. Time Management Skills
Your time management skills will help you select among several time management strategies and productivity frameworks that you can use to manage your time effectively. In a hold, time is the scarcest input you own, because every quarter spent on the wrong work is a quarter subtracted from the value-creation window.
These time management strategies normally include the following steps:
- Organization
- Goal-setting
- Communication
- Planning
- Delegation
Developing time management skills may take time for some, but great managers often grow within a business promotion after promotion. This sets a manager apart because they become more productive, achieve goals faster, and do the job more efficiently. The decision this drives: force a ranked sequence of the value-creation initiatives and kill or defer everything below the line. Speed to the initiatives that move EBITDA is worth more than doing all of them slowly.
10. Public Relations Skills
Several business consultants work as the company PR with the following tasks:
- Written Communication
- Organizing Events
- Media Relations
- Developing Promotional Strategies
All of the tasks mentioned require that a consultant has excellent written and oral communication skills, among others.
Marketing teams and PR teams often overlap without proper directives. The primary tasks of the Public Relations experts include communicating news and stories to the different media channels and ultimately creating a buzz about your new products or services.
Most of the time, PR strategies include events hosting like product launching or merger announcements. No matter the company’s size, it can leverage media mileage, especially in the long run, and for a platform building toward exit that reputation feeds directly into how a buyer perceives the story.
Public relations skills are skills that you can acquire with proper research and immersion.
As a top executive or manager of a company, big or small, you could be the face of your organization. Every time your customers, the media, and the other company stakeholders look at you, they see what you represent. The decision this drives: treat PR as reputational risk management with an exit audience in mind, and only fund it where it protects the story a future buyer will underwrite.
What to inspect before you fund another sprint
This is the section written for the sponsor, the operating partner private equity teams field on the ground, and the CEO or CTO who has to act on their read. You have inherited a team. Before you approve another quarter of spend on it, run a structured inspection, because the point of the exercise is a decision, not a report.
What to inspect, in order:
- Where the money goes. Map engineering and operating spend to the outcomes it produces. If the team can only describe hours, tickets and features, and cannot connect them to revenue, margin or a risk retired, you are funding activity and calling it progress.
- Forecast reliability. Compare the last four forecasts to what actually landed. A team that misses its own numbers by wide margins is a covenant and repricing risk long before it is a growth problem.
- Key-person concentration. Find every single point of failure. Where one departure stalls the roadmap or empties the institutional memory, price that as risk and decide whether to fund a backup now.
- Diligence exposure. Look for the things a future buyer will find, unlicensed dependencies, undocumented systems, security gaps, contracts that do not survive a change of control. Each one is a discount at exit unless you close it during the hold.
What good looks like: spend maps to outcomes a board can name, forecasts land inside a tight band, no roadmap depends on a single irreplaceable person, and diligence risks are being retired on a schedule rather than discovered by the buyer. What it costs when it is wrong: a stretched hold, a repriced exit, and value you underwrote that never becomes value you realize.
The decision this drives is the one you came for. Fix, replace, or leave alone. Fund the fix where the team is fundamentally sound and the gap is a system or a manager. Replace where the leadership will not produce a plan that maps to the thesis. Leave it alone, and say so plainly, where the team is already good, because spending management attention on a working team is its own kind of waste. Whichever way it goes, an advisor earns their fee by giving you that call with the reasoning attached, not by adding another opinion to the pile.
Bonus: 16 Must-Have Soft Skills
Apart from the 10 business advisor skills you can leverage, these 16 must-have soft skills can be extremely useful as well, not only in advancing a career and professional development but also in running a business. Inside a portfolio company you are dealing not only with technical problems but also with business challenges sprouting every now and then, and any one of them can move the number.
Running or managing a business also has a lot to do with working on activities such as risk management, sales, marketing, negotiations, project management, legal, and accounting, among many others. Those are the same lines a buyer runs their own diligence against.
With several activities and a heavy workload, the leadership has to plan, delegate, and communicate with clients and partners while juggling multiple tasks at the same time. Being skillful across many aspects helps the team handle these tasks efficiently and deliver high-quality work without burning out.
This is where the benefits of hiring a business advisor become concrete for a sponsor. You can employ the consulting services of a reliable business advisor or consultant who provides insight and assistance in exactly the areas where the team is thin, and buys you a second read without a permanent seat on the P&L. The qualities of a good business advisor, and the mark of a trusted business advisor, come down to the same test used throughout this piece: do their recommendations map to revenue, margin, or risk, and can they own a call rather than survey the options. That is also the plainest answer to what is a business advisor worth to a hold. The role of business advisor here is to protect the time you have for research and development that can help innovate and scale your business toward the exit, and enhancing advisor skills across your own management bench compounds that over the hold. When you weigh advisor skills and advisory skills against the plan, keep only the ones that move the number.
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By Mario Peshev, DevriX
