When I started my consulting business back in 2001, the independent advisory industry had one major problem: The baby boom generation of firm owners was starting to reach retirement age. I built my business on providing solutions for this problem.

In working with hundreds of firms, I realized that most advisory businesses had two basic deficiencies that were hampering our ability to find workable solutions. The first was that most baby-boom owners didn’t understand the fundamentals of running a successful advisory business — an ignorance that surprisingly includes owners of some of the most successful firms, raising the question of how much more successful many of those firms could have become under more experienced business leadership.

(Related: Thinking Boomer: Understanding This Generation and What They Need From You)

The second issue, which was in part based on the first, was that most owner-advisors were failing to train their successors to successfully take over and run their firms. As I mentioned, I’ve built my business on providing solutions to those two problems, such as transforming some larger firms into smaller, cash-flow-based firms that are much easier to manage successfully.

Fast forward to 2017. The majority of boomer firm owners either have retired or will retire soon, turning over a growing number of their businesses to my fellow Generation Xers (folks roughly between the ages of 35 and 50 years old). While many of my compatriots feel this is cause for big-time celebration, they don’t seem to realize that it is also a tragedy. In very short order, whatever business wisdom the boomers have acquired will be lost forever, creating a knowledge void that the Gen Xers somehow are going to have to fill.

But that’s not all — it gets worse. For some reason, we Gen Xers seem to be incapable of asking for or accepting any help from others. My theory is that most of us were raised by boomers to be very independent and to have unrealistic views of our own abilities. Consequently, most of us don’t see the need to learn from others. Instead, we figure that if we just roll up our sleeves and get to work, we’ll be successful.

While this kind of self-confidence can be useful to a point, it can also create serious problems, particularly when trying to run a successful business. For one thing, Gen X owners have no patience for learning fundamentals (or much of anything else). Instead, they want to jump right in with a solution, which means that they rarely, if ever, plan for or even anticipate their strategies not working out.

This, of course, leads to two more problems. First, Gen Xers spend a lot of time denying the actual outcome, and then, when reality finally forces them to acknowledge failure, it becomes a major, often incapacitating, blow to their ego. As you might imagine, both reactions render the firm owner incapable of making adjustments to a plan, or of making other decisions that would ultimately lead to success. Simply put, rather than acknowledge and fix, owners in my generation usually just quit and move on.

I’ve had to radically alter the way I work with owners of my generation. By trying to learn on their own, Gen Xers have developed a lot of bad habits that they need to unlearn. So, rather than assuming my typical role akin to one of the “Men in Black,” the expert who’s here to tell the firm owner how to solve her or his problems, I’ve transformed my approach to that of Mr. Miyagi in “The Karate Kid,” browbeating and cajoling Gen X owners to “wax on, wax off” with their fundamentals until they build a strong enough base to serve as a foundation for a successful advisory business.

I’ve found that there are 22 fundamentals that successful firm owners have to get under control, which can be organized into eight main areas. I have agreed to write more frequently for ThinkAdvisor.com, and in these future blogs, I’ll address each of the fundamentals. For now, here are the main areas along with why they are essential to the success of your business:

1. Leadership. Encyclopedias have been written on leadership, but in an independent advisory business, the basic job of top executive — owner, senior partner, managing partner, CEO, etc. — is to create and protect the brand of the firm. In most cases today, the brand probably already exists, but that doesn’t mean that it can’t be tweaked or even overhauled to increase success.

The most essential element for success is getting everyone in the firm to pull together in the same direction. I know that sounds cliché, but I’ve found it’s both much harder and much more important than it sounds. And to achieve that goal, you have to have a firm “brand” — what you’re doing and why you are doing it — that everyone in the firm clearly understands, can articulate and buys into.

2. Corporate finance. Many successors take over profitable firms and then promptly destroy them. Usually it’s because they don’t know the difference between profits and cash flow. If your primary goal is to take as much cash as possible out of the business, you will erode profits and eventually start choking the revenues you already have. Your income statement indicates the health of the business; if you ignore it, you’re flying blind.

3. Operations. New owners tend to get confused about how to keep their business running smoothly. While they are important, efficiency doesn’t come from processes or procedures. It comes from consistently good client service. Client service is your product, so it’s important that everyone in the firm know exactly how every service should be delivered to each client, every time. No exceptions.

4. Client service. Most client services are delivered by each client’s advisor, so don’t get distracted by new technologies or other bells and whistles; 90% of client service is what comes out of your and your partners’ mouths. The other stuff amounts to maybe 10%. So don’t get tricked into thinking you can improve “efficiency” by reducing your facetime with clients. Generally, the more time you spend with your clients, the happier they will be.

5. Management. Despite what you might have heard or read, managing people is not about inspiring them. It’s about having a solid understanding of your business and your people so that you can ensure you have the right people in the right jobs with the right tools to succeed. Yes, it helps if they like you, but not at the expense of the business. Everyone wants to succeed at what they do. If you help your employees do that, they will like you.

6. Human capital. I find it ironic that the most frequent employee complaint is about the “culture” of their firm (their working environment), but when an employee becomes the boss, she or he usually overlooks the corporate culture they create. The biggest impact you can have on the success of your firm is to create a culture that the employees want to be a part of; one that’s enjoyable, cooperative, mission-driven, supportive and inclusive. Happy, focused, inspired people tend to be more productive and stay with their firms. That leads to success.

7. Marketing. Over the past decade or so, independent advisory firms have been seduced into thinking that the key to their growth lies outside their firms. This notion contradicts the business experience of the first 30 years of the independent-advisory industry’s history.

Historically, and still today, the greatest opportunity for growing an advisory firm lies within its current client base. Yet we seem to have forgotten this reality. Focus on what percentage of your exiting clients’ assets you are actually managing. Typically, you just have to ask the question, but most advisors don’t. Then there’s asking for referrals. Your referral ratio is really a report card on the quality of your client service and the happiness of your clients.

8. Sales. I’m not talking marketing here, I’m talking about sales: the ability to articulate clearly who you are and what your business is. As I’ve written before, you and your team should be able to sum this up in 30 seconds and repeat it virtually word for word to anyone who asks — and sometimes even to people who don’t. The more times your friends and clients hear this pitch word for word, the more likely they will repeat it to their friends and acquaintances. It’s automatic marketing and it never gets old.

These are the eight business categories that today’s generation of owner-advisors need to master to build successful, or more successful, firms. Next month, I’ll discuss in more detail some of the areas within these categories that young owners should focus on.

— Read Don’t Let Your Business Control Your Life on ThinkAdvisor.