It is the term du jour. That big wow buzz phrase that is making the rounds at cocktail parties and conference rooms around the country. If you aren’t talking about it, then you aren’t doing it, so take note as I give you (drum roll please) The Sustainable Business Model phenomenon. Everyone is atwitter about the S.B.M. and its implications on this sector of the financial services industry.
While it’s one thing to make cocktail party chit chat about exploring a sustainable business model, it’s an entirely different thing to actually execute one. The first thing advisors must do is define the term. What the heck is a sustainable business model and why is something with such a boring name grabbing all the airtime?
The truth is, there are as many sustainable business models as there are advisors. What is sustainable for Advisor A, might be completely different than what is sustainable for Advisor B.
According to Joe Finora, a financial writer and researcher (and frequent contributor to this magazine), a truly sustainable business model can be measured by how the business is growing, the trends in referrals, the achievement of goals and the strategic plan for the future. An oft-overlooked, but critical element of almost all sustainable business models is a solid succession plan. Without an exit strategy, no business is sustainable no matter how successful.
So, don’t fret if you don’t have an official document tagged as your S.B.M., if you are successful and your business is thriving, not slowing, you’ve got your S.B.M in place. If your business is not sustainable, you’ll know it soon enough.
Speaking of succession plans, beginning next month, SMA will have a new face on this page. I am pleased to announce the appointment of Brian Anderson, a veteran editor and journalist, to the post of Editor.