Business owners may represent the “Holy Grail” for many financial services representatives, but cultivating and securing those clients can be one of the most challenging sales of a representatives’ career.
Why? Because business owner clients have complex needs that require a financial services representative to be more than a salesperson. Successful financial services representatives who work with business owner clients know that to truly meet their needs, they must take a holistic approach that starts with asking the right questions.
Starting on the wrong foot
Small businesses — defined as companies with 500 or fewer employees — now make up 99.7 percent of the businesses in the United States, a figure that’s poised for continued growth. This growth, coupled with some significant regulatory changes coming down the pipeline from Washington, means that the time is right to start building your business-owner client base. So where should you start?
Succession planning is the major challenge facing business-owner clients today. But succession planning isn’t a once-and-done process. Succession planning involves a whole host of risks and financial challenges for business owners and their employees that only a holistic plan can solve. Business owners need plans for their personal retirement, insurance, wealth transfer and estate planning needs. And they also need plans to help them ensure business continuity in the event of their own premature death.
With so many facets impacting a business owner’s financial and business plan, financial service representatives may be tempted to begin their discussions with prospects using succession planning questions — i.e., when do you want to retire? Who will assume control of your business, and are they aware of your plans? How do you want to go about transferring control of your business? However, that approach may be a mistake.
Take a holistic approach
While business owners’ needs are complex, it’s important to remember they are approaching some of the same challenges as your other clients. They are concerned about retirement savings, confused about upcoming changes to tax codes and unsure about which financial products will help them meet their personal and business goals. It is your job to start from the ground up to ensure you’re focused on all of their needs — not just those related to their succession plan. It’s not surprising that business owners can become easily overwhelmed by their options.
Unfortunately, all too often, financial professionals will attempt to answer every objective at once and spend a tremendous amount of time creating all-encompassing plans to address each potential concern. As a result, the complexity and multitude of solutions may effectively paralyze the business owner into a state of inertia.
See also: From business success to succession
In many ways, a direct approach can be more effective. It’s helpful to think of the business owner’s situation as being similar to that of a couple that has recently purchased a century-old home. Immediately fixing every blemish the home inspector caught is not only too intimidating, it might be a waste of time and resources. Instead, it’s important to take one step at a time, identify the priorities and then tackle the challenges. Start by fixing the plumbing. Once corrected, the next task can be accomplished with even greater confidence. The same is true for helping business owners — find out what part of the overall structure needs the most support and start building from there. The other issues will follow, and business owners will appreciate your guidance because you’ll have already earned their trust.