My consulting business has the exact opposite problem of most independent advisory businesses. In my business, I tend to spend more time on the business — thinking about new ways to help advisory firm owners and how to get that information out to more of them — than I do working in my business.
In contrast, most advisory firm owners (at least most of the owners that I’ve come across) are far more likely to spend their time working with clients than working on their businesses. This can create problems.
The owners of today’s advisory firms that are generating $2 million or more in annual revenue who wish to grow their businesses toward the $1 billion in client assets-under-management mark (or roughly $10 million or so annual revenue) need to appoint or hire a full-time CEO to guide them to their goal.
However, most smaller advisory firm owners — with more modest growth goals — don’t have the resources to support full-time management, either by filing the role themselves, let alone hiring an outside professional.
But that doesn’t mean that these firms wouldn’t benefit from having someone working on the business — that is, thinking about ways for their firm to be larger, more profitable, and more successful.
In most independent advisory firms, that means the owner needs to spend more time working on the business, rather than in it. To do that, firm owners need to change the way they see their business — and their role in it.
Most advisory firm owners would be more successful (however they define success) if they learned to manage their time better.
For firm owners who want to grow their businesses to have more clients, increased revenues and/or higher profit, better time management is essential. This means they need to spend a significant portion of their time on their business, rather than in it.
Of course, if you’re like most firm owners, you barely have enough time to do what you’re currently doing, therefore the prospect of spending more time on your business doesn’t sound possible.
The reality is it’s a lot more doable than you think.
The first step is getting some help. I’m not talking about hiring more people, although in some cases that can really help.
For many owners, “more help” is available from two sources: delegating and outsourcing.
If you’re like most firm owners, chances are that you are still performing some tasks that could be done as well — or better — by someone else in your firm. Remember, your primary job is to make good business decisions. Delegating is usually as good for the employees as it is for you.
For instance, if you have 10 or more employees in your business, you probably don’t need to be managing all of them. You can have some employees report to other more senior employees, and try not to interfere unless problems arise.
What’s more, your job as CEO, or de facto CEO, doesn’t have to include gathering information on every issue that comes up.
Usually, one or more of your employees will know as much or more about many problems than you, so use them as resources to find out what’s going on, and then make recommendations about what needs to be done.
Don’t limit the resources you need to those inside your firm.
You may have to make decisions that affect all areas of your business, but you don’t have to be an expert in each. Most successful firm owners get outside professional help in key areas: legal, accounting, compliance, marketing and business management.
Spending an hour or two with a professional on a problem is far more efficient than spending hours in research.
To keep track of how your business is really doing without wasting a lot of time, focus on key financials: gross revenues, the profit margin and the expense ratio. These numbers and the directions they are headed are the scorecard for how well you are doing as CEO.
And finally, cut back on your client load.
The good news is if you manage your time well, you can continue to work with some clients. But you’ll probably have to hand off a good portion of them to one of your other advisors.
The key is to give yourself enough time to spend in your business to make it successful. If you can’t do this, you may want to reevaluate your definition of success.