Many advisors think running a successful small business is easier then running a successful larger business. But that’s usually not the case, and here’s why.
Typically, the people who get the top jobs in larger corporations have professional business school training. What’s more, they have more resources at their disposal to get help when they need it.
In contrast, the owners of independent advisory firms usually have professional training in finance and/or financial planning. Plus, their resources often limit the amount of professional help they can get when they need it.
As a result, owner advisors tend to make “rookie” mistakes when they are trying to grow their businesses. A classic example is how many owner advisors react to movements in the stock market.
My consulting firm does internal assessments of all our client firms, which includes the standard financial data that result in “key performance indicators,” lie the growth rate, lead flow rate and close rate.
Based on these assessments, we can form a good idea of a firm’s growth problems and its opportunities. This info serves as a good starting point for working out a strategy to move toward the owner’s growth and other goals.
Unfortunately, what we can’t predict is the behavior of the firm’s owner and other leaders. Even though we can pinpoint the problems, the behavior and decisions of the owners and/or CEO determine the ultimate outcome — success, failure or something in between.
Success or failure often depends upon not just a willingness to make changes but also the rate at which a firm makes changes. The simple rule of thumb is that the faster you change, the faster your business grows. It’s that simple.