Be The Trusted Advisor Of Small Business Owners
While the small business market is huge in this country–LIMRA estimates there could be as many as 6.4 million businesses with fewer than 500 employees–many producers still haven’t learned what it takes to crack the market.
Agents who have become successful in this market have done so, experts say, by listening to small business owners, understanding their needs, and developing customized plans to help them achieve their goals.
Lisa O’Day, vice president of business planning at Jefferson-Pilot Financial, Greensboro, N.C., says agents who are not actively working with small business owners can get started in a couple different ways.
“Business owners are the high net worth crowd in this country, and they are not typically the visible crowd,” she says.
Finding small business owners may not involve looking for individuals with big houses and expensive cars, says O’Day. “I think we are such a consumer-driven society, we equate high consumption with high wealth. I think there are a lot of people who look like middle Americans who are in fact well-to-do business owners,” she says.
“There are so many small business owners,” she continues, “that if agents go back and review their client base, they will find that someone they met through a different avenue is a small business owner.
“Cross checking your client base and mining your client base for further referrals,” O’Day says, “is one way to get into the small business market.”
Yet, even agents who have small business owners as clients may be overlooking other potentially lucrative areas in that market.
Mark Teitelbaum, second vice president of advanced marketing at Phoenix Life, Hartford, Conn., feels that many agents tend to be too focused on one aspect of planning, and as a result they often miss opportunities to plan for an existing client’s business.
“Were aware of many agents who have been very estate planning focused, and yet they’ve dealt with small business owner clients and never once broached the issue of business continuation planning or even benefit planning,” he says.
“There are many agents who, just because of their focus, end up leaving business on the table,” he says.
Teitelbaum explains that these “specialists” may find success in the small business owner market by taking the team approach to planning. “In terms of better serving the market, look at either providing more full service to the client or partnering with someone who can provide those ancillary services.”
Teitelbaum says that by working with a group of advisors, agents can provide business owners with a complete financial plan including the business continuation plan, the employee benefit plan, and the estate plan.
O’Day says agents should get better acquainted with businesses in their local markets. This can help a producer better understand the business owner. “If you understand those people [business owners] and talk to them credibly about their business, and show them you understand their concerns, they will gravitate to you as an advisor and someone they come to for information and advice,” she says.
O’Day says agents can get a better idea of their local market by “staying in touch with their chamber of commerce, and reading all the local financial journals to find out what’s going on.”
Finding business owners is one step in getting more acquainted with this specialized market. But experts warn that agents need to take special care in marketing to this group.
“The one thing I caution agents against doing is going in with a product focus,” says Teitelbaum.
“You’re going to have some level of success if you walk in with a hot idea,” says O’Day. “But quite frankly you’re going to be far more successful if you walk in and listen to your client and give him some options based on what you’ve heard from him.”
Teitelbaum says that when agents go into an interview with business owners and employees, they should try taking a planning approach. “A benefit plan, a business continuation plan, and a product sale will reveal itself,” he says.
“The biggest mistake I see is someone coming into a business already knowing what they want to sell,” he says. “What I recommend to producers is to come in with a couple of solutions, and give the employer the choice.”
O’Day says, “The really good producers are so people focused and focused on truly helping as much as they can with every aspect of their client’s life.”
She notes that many producers are often sought out by clients for all types of financial information, ranging from section 529 plans to IRA distributions, and some even seek advice on buying or leasing a car.
“You take a producer who is committed to understanding the financial marketplace, and their clients come to them almost more than they go to their family doctor,” she says.