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Practice Management > Building Your Business

4 Topics All Owners Should Be Thinking About

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A key part of our business management strategy is to create firms that take as much off their owner-advisors’ plates as possible. Not only does this eliminate what’s almost always the major bottleneck in a firm, it also gives firm owners more free time in and out of the office. That greatly lowers owners’ stress levels and significantly increases the quality of their work. However, we’ve also found another result of “leveraging” firm owners that we hadn’t expected: many advisors kind of “freak out” when they find themselves with little or nothing to do when they don’t feel “busy” every moment of every day. 

While it’s often difficult to get firm owners to take the quality down time that is essential for all of us to maintain peak productivity, and sustain mental health, we’ve found that’s even harder to get them to refocus a substantial portion of their new-found “down time” on their business, rather than on their job.

Over the years, we come to realize that successful businesses—whether they are Apple, JP Morgan, or small independent advisory firms—don’t become successful by themselves. They are the result of thoughtful decisions and careful nurturing over many years. So business owners, and/or CEOs, should be spending most of their time just thinking about their businesses. 

I know, to most owner-advisors this sounds like crazy talk. Believe me, I’ve heard that reaction hundreds of times. But for advisors who have made the decision to grow their business beyond themselves and one or two clerical assistants, there isn’t really another option. Both businesses and employees need to be managed. And sound management requires clear thinking—lots of it. Which means most advisory firm owners should put on their CEO hat most of the time, and simply “think” about their business.

What should they be thinking about? Here are just some of the topics we encourage our owner-advisor clients to think about when they aren’t managing employees, working with clients or trying to get new ones: 

  1. Are you building the firm you want to have?  
    I can’t tell you how many owner-advisors we’ve run into who are so focused on “building” their firm that they have never stopped to think about what firm they are building.

    In my experience, most advisory firm founders started their businesses as much for the lifestyle, the working environment, and/or the control over client care as they did for financial considerations. Yet they often forget that when they grow their firms.

    We tell owners to be careful what they wish for—and when they are making choices about how big they want their firms to be, who their clients are, what client services they offer, and whom they hire as employees. I always find it heartbreaking to talk with an advisor who’s spent decades building a firm that they don’t want to work in anymore. 2. Do you have the job you want to have? Owners should also carefully consider what they do now and what they’ll be doing in three, five and 10 years. Some advisors just want to be advisors, period. Others like managing a team, or even running a business (more on that later). But whatever it is that gets you up in the morning, be sure you’re creating a business that will enable you to keep doing it.

    3. How can your business be better?  
    Once you figure out the role you want to play, it’s time to turn your focus toward your business. In our experience, very few advisory firms can’t be more efficient, more profitable, generate more revenue, offer better client services, attract more clients, better train employees, better motivate employees, be more valuable to a buyer or find and groom a successor. However you measure “success,” chances are your firm can be better at it. As owner/CEO, it’s your job to figure out how to make it better and then to come up with a plan to get there, step by step. You don’t have to do this alone: your employees and/or an outside consultant can help. But first you have to make the commitment to get better.

    4. How are your past decisions working out? 
    Building a successful advisory business entails much more trial and error than most consultants would have you believe. There are just too many variables for hard and fast rules: the owner, the employees, the local market, the clients, the economy, the competition, etc., etc.

    Each of these factors has multiple facets, and then they all interact together. To get it right takes time, and usually as many missteps as successes. 

    The first key is to not quit. The second key is to constantly assess how your strategies, initiatives, and employees are working out so far, and whether they need tweaking, fixing, redirecting or simply trashing. The third key is to always learn from what you’ve done—good or bad—so you don’t keep making the same mistakes over and over. With time, you’ll get better at knowing what will work, and at trying new things. 

Of course, some advisors don’t want to be a CEO: they just want to work with their clients, their way, in their own business. Our advice to most of them is: Fine. Stay solo. But, of course, there are always advisors who don’t want to be a CEO, but do want the other benefits of a larger firm (higher income, sellable equity, more staff support, colleagues, a team environment, a succession plan, etc.).

These folks have three choices: bite the bullet and become CEO; hire a CEO to run their business while they work with clients and/or get new ones;  or work with a consultant who can take on most of the CEO duties (sort a virtual CEO, if you will), leaving the advisor(s) to work with clients and mentor young advisors.

There is no one “right” choice: but there is a need to make the decision. Businesses that don’t have someone thinking a lot about making them better rarely get better. 


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