THE BUSINESS OF ADVICE- Prospecting for Gold

The second, and most beneficial, type of research is talking to individuals face-to-face. This tactic allows you to gather information and build relationships that will lead you to business opportunities.

Think Like a Mining Engineer

If you are a mining engineer, you are trained to understand where certain types of minerals are formed and are most likely to be found. Once geologists identify a land formation where there is a high probability of finding the minerals they are looking for, they drill test holes. Then they have the soil assayed. If they find any traces of the mineral they are looking for, they move up the hill and dig a hole on the right and the left of their test hole. Then they have those soil samples assayed. The soil sample with the most mineral content indicates the direction they move in; right or left. They will then move up the hill and drill another series of test holes until the traces get stronger and stronger. Finally they follow the richer soil samples to the mother lode. Once they find a vein of the mineral they seek, their company sets up a mine and they start pulling the ore out of the mine.

For financial advisors, finding prospects is like mining for minerals. It takes a lot of knowledge and a very organized information-gathering and evaluation mechanism. Instead of drilling test holes, advisors can conduct research interviews. When you get positive results you pursue those opportunities; if you get negative results, you move in another direction.

Research for Knowledge, Relationships, and Profit

In a research interview, you spend an hour or 90 minutes talking with a local center of influence who is well connected. Some examples are business development officers, people involved with the Chamber of Commerce, business leaders, business editors at the local newspaper, and leaders of business or social groups in your community.

You are looking for people who are helpful, friendly, and open to giving you advice and recommendations. When you interview these people, ask them questions such as:

• What are some of the major industries in town?
• What have been major industries that are now declining?
• What are some of the industries that are growing?
• What are the major economic drivers in the business community?
• What are some of the major employers in the region?
• Traditionally, what has been the primary driver of wealth or economic foundation for this community?

It’s critical that you understand the economic demographics and financial foundations of your community if you want to find hidden opportunities. San Diego, just south of where I live, is known for tourism, for its large Naval base, and for its dynamic biotechnology startups. However, the largest industry in San Diego County is actually agriculture.

This indicates to me that there might be tremendous opportunities in serving the employees of companies who support the agriculture business: farm supply and equipment distributors, wholesale suppliers of irrigation material, fertilizer distributors, agricultural product processors, specialty agricultural services, specialty contractors, or dealers of trucks and farm equipment.

These industries should all have large percentages of blue-collar millionaire business owners and professionals that service them. These people have accumulated significant assets, and are often not big spenders.

Rich Niches Will Transform Your Business

Hal Klein from Newport Beach, California, established himself in a rich niche among Chevron employees. He worked the rollover market, and soon 95% of his clients were from this one company. He was generating almost $1 million a year in revenue, and he believed that the biggest reason for his success was the high level of service he provided. How could he provide such great service with only one part-time assistant? “When all of your clients come from the same industry, are in the same age group, have the same investment and insurance products, and the same issues and concerns,” he told me, “service is a snap.”

Hal had identified a key benefit of focusing on niches: Everyone has the same problems, so you can offer everyone the same solutions (within limits, of course). This creates a highly streamlined business model. You get really good at delivering a specific solution, and you acquire a knack for finding people who have that problem.

Once you identify and start to serve a rich niche, you will be able to start a consistent flow of introductions to ideal prospects. You will develop specialized services that meet the needs of these ideal prospects. Your clients will have many of the same issues and concerns, which will allow you to provide an efficient and streamlined level of service. The days of trying to be all things to all people are long past. In mature industries, it is critical to identify specific business opportunities and align your business services to serve the people in those niches.

When you find your market niche, it will fundamentally transform your business. If you cannot find a niche for your services, you run the risk of being left out in the cold trying to find low-hanging fruit when there is none. The new model for the new millennium is to plant deep roots in fertile soil, and then carefully tend your own garden. Those advisors who identify and serve rich niches will survive and thrive in the years ahead. Those who continue to try to be all things to all people will find it more and more difficult to attract profitable clients and to serve them efficiently.

Steve Moeller is president of American Business Visions and author of Effort-Less Marketing for Financial Advisors. Call American Business Visions at 800-678-1701, or visit www.businessvisionsp.com.