Small-business owners are typically a self-reliant lot, and this fact cuts two ways for financial advisors who would serve them.

On the positive side, the advisor who gains access to a small-business owner has reached the decision maker, the person who makes the call on how and by whom the money generated by a business will be managed. The downside is that the mini-moguls are not always looking for help. According to a 2002 survey by the National Federation of Independent Business, just 25 percent of small-company owners with 20 or more employees had sought advice from a management, marketing or financial consultant in the past year.

Of course, that leaves a rather large group of potential customers — but only for advisors who understand the benefits small-business owners would seek from an advisory relationship. Here are some clues from the small-business owners themselves:

Personal or Business? The business owners interviewed for this article typically use one advisor for both personal and company needs. Indeed, one of the things that make small-business owners such an intriguing market is the way their personal and business finances intertwine. Making sense of the tangle is in large part what a financial advisor brings to the table when meeting with such a client.

Stanley Lukken, a Dallas-based businessman who six months ago started the education software company Go Figure Learning Software, exemplifies this type of client. When he was a corporate executive at a previous company, he used a broker to handle his investments. But now that he's running his own firm, he needs someone to handle both business and personal matters, and he is in the middle of a search for a new advisor who can handle the double duty.

Of course, not all small-business owners want all their financial matters handled by the same person. For instance, Michael Morigi, CEO of CFD Sports Framing in Carrollton, Texas, has long used his best friend as a his personal investment advisor, and he was reluctant to give up that relationship when he became a partner in the firm in 2000. He now uses one advisor for business-related financial matters, including life and health insurance and retirement plans, while keeping his personal accounts with his friend. “There's a lot of email, as well as face-to-face meetings with the three of us,” he says.

What They Don't Like. For starters, small-business owners need personal attention, and if they do not get it, they often take it personally. Judy Katz, who runs Katz Creative, a ghostwriting and public relations firm in New York, says she dropped her last advisor because he spent very little time with her. “I was a stepchild to these people,” she says. “I got lost in the shuffle.” She remembers calling up after not hearing from her advisor for many weeks and getting the distinct feeling he hardly knew who she was.

Communication is extra important when the markets are rocking client portfolios. In the absence of a conversation about portfolio losses, clients are likely to blame the advisor — even in cases where it's obvious the markets are the source of the problem. When David Dean, CEO of Tri-Country Realty in Chapmanville, W.Va., lost $60,000 it undermined his relationship with his financial advisor. “It's caused me to feel a certain amount of distrust about investing in the market and dealing with financial advisors,” says Dean.

Another dislike: a high level of trading activity that is not easily explained. Barry Epstein, head of Barry Epstein Associates, a public relations firm in Boca Raton, Fla., left one advisor after just eight months for that very reason.

How They Want to Pay You. The bad news is, there's a big concern about how advisors get paid. The central issue: Advisors are not compensated for what they really do — or, at least, that is the perception. “My whole life I've been performance-driven. If I don't perform, I don't get paid,” says Dean. “It should be the same with them.” Lukken echoed that feeling. “I would like a financial advisor to make a commitment to performance,” he says. “I would like them to have some skin in the game.” In fact, he's trying to replace his old advisor largely for that reason.

How They Find You. The most common way small-business owners found their advisors was through referrals — sometimes third-hand referrals. John Liberati, head of Liberati Investment, a real estate investment firm in Souderton, Pa., met his advisor through a banker referred to him by his attorney. Others, like Katz, found them through networking events. She attended a meeting of the New York City chapter of the Association of Women Business Owners last year, just when she had decided it was time to make a switch. During a cocktail reception, she happened on a financial advisor who impressed her. Soon after, she hired her.

On the other hand, there's Thomas Wade, who recently sold his Carrollton, Texas-based GVI Security Solutions. His current advisor contacted him though a cold call, then made a sufficiently impressive presentation, highlighting an assortment of investments, retirement vehicles and insurance plans, along with an obvious business savvy, that Wade almost immediately decided to get rid of his previous broker. “We immediately perked up and said, ‘We never thought about that stuff,’” he says.

Why They Want You. In some cases, small-business owners went shopping for a financial advisor when they realized they had to diversify their holdings. That's especially true for people like Liberati, who are heavily involved in real estate. “I have to make sure that when the market drops my income doesn't go sour,” he says. In other cases, a momentous personal event — such as the arrival of a first child — touched off the search. Dean, with a four-month-old toddler, has been looking for several months for an advisor to help him diversify away from his real estate.

Another big motivator is time: Most small-business owners say they work constantly and simply do not have enough time do devote to their investments and other long-looking financial matters.

Another jumping off point is during a period of rapid expansion for the company. Chris Consorte of Integrated Direct, an advertising agency in Westbury, N.Y., is a case in point. He started working with a broker about 12 years ago, two years after graduating from college. But it was just one year ago, after the then five-year-old business had doubled in size, that he and his partner figured they needed more financial savvy. Consorte brought in a new advisor to deal with the business.

Another major driver is that many small-business owners do not know much about finance. Aaron Bodin of Akolyt Medical, a Morgan City, La., says he specifically sought an advisor who could provide him with a financial education.

Says Dean: “The most successful business people realize what they don't know — that's what makes them successful…I know real estate; I don't know finance.”

Business Investments and Other Products. Though a small business might well turn into a great generator of investable assets for the client, many favor reinvesting in their business over other sorts of investments. As such, it's important for small-business advisors to understand that much of their investment-strategy efforts will go towards the client's personal accounts. “I put everything back in the business,” says Epstein. “Most of my investments are personal — stocks, bonds, the occasional real estate deal.”

Also, when it comes to insurance, advisors need to have experts ready if they expect a client to deliver business. When it comes to implementing 401(k) plans and other retirement vehicles at their business, though, advisors usually get first crack at the business. Wade, for example, originally used a payroll service to administer a 401(k), but he turned the business over to his advisor, in part because the advisor was willing to do some employee education on topics such as writing a will.

Ultimate Goals. In short, small-business owners seem to be searching for sophisticated, long-term payoff from their work with a financial advisor. “I'm looking for a real relationship with somebody who will help me grow,” says Katz. More than that, she wants to build a team. To that end, she also recently replaced her accountant and now the three meet regularly. “Even though I don't have a lot of money invested with them now, I want them to feel I will some day,” says Katz. “We can grow together.”

Bodin is another case in point. His advisor helped him value the company, which he bought six months ago, and helps with budgeting and long-term projections. “He's more like a chief financial officer,” he says.

In some cases, these entrepreneurs have started using their financial advisors for strategic advice. Morigi's advisor, for example, recently suggested a change in strategic focus — concentrating on online auctions held during games, which tend to be considerably more lucrative than retail sales. Over the past four months, Morigi has significantly expanded that side of the business.

For Wade, the difference between his old and new advisors was so stark, it made him realize what an opportunity his old broker had let slip away. “If you take the initiative and present yourself as more of a business partner, you'll probably get a lot of business,” he says.

KEY POINT

Small-business owners want personal attention, and if they do not get it, they often take it personally.