Often, the term “trusted advisor” is used in the business world. In fact, it’s so widely used that many may not truly understand what it means.
Trust is defined as “assured reliance on the character, ability, strength, or truth of someone.” As a trusted advisor, Karen Brown, First Bank Commercial Loan Officer, has found there are key principles that define a trusted advisor, including integrity, knowledge, expertise, and responsiveness. Also important are long-term relationships with clients; finding the best solutions; creative problem solving; and having trust in all parties involved. Another key attribute is having a solid reputation within one’s own organization.
“Having the ability to draw trust internally often grants you a stronger ear that otherwise might be ignored,” said Brown. “This applies when a client needs a special condition in their loan that needs conveyed to the bank’s senior management in order to obtain support for the request.”
In being the best trusted advisor possible, dealing with all stages of business in a professional, proactive manner is critical. Clients in the middle market world come with a level of sophistication, requiring the highest level of banking management. Meaning, that no matter what the goal is, all parties will work together to get the best possible results. As a business owner, it starts by working with a trusted advisor. It then requires your advisor to have a cache of knowledge to reach the best possible solution, even when this involves the added expertise of a third-party.
Brown recalled an existing manufacturing client was experiencing financial stresses in its business from competitive market pressures, gross margin compression, and increasing labor costs. “In discussing with the owner his action plan for moving the business through the current cycle, the owner acknowledged he felt his knowledge base just wasn’t broad enough to work through current issues,” she said. “The owner thought it was time to wind the business down; however, he was concerned about his employees’ futures, many of which were long-term employees.”
The owner admittedly needed direction from industry specialists to help guide him through the next steps. “He knew I had years of experience in financing businesses through many operating cycles,” said Brown, “and that I also maintained a broad base of contacts.” Brown happily referred consultants she knew specializing in business turnarounds and business sales. Through those introductions, the consultants reviewed their business operations, determining it was fundamentally a sound company, required some internal restructuring, and needed stronger financial backing to carry the business to the next level. The consultant recommended a possible merger as an alternative to downsizing or selling.