Typically when owner advisors decide they want to grow their firms, they create and launch a marketing program and/or hire more employees.
But when owners seek advice from other advisors, business consultants, and friends and family who also are business owners, they usually are told to start by creating a clear picture of where they want their businesses to be (i.e. vision, mission, goals) and only then to start thinking about how to get there. While this isn’t bad advice, particularly when implemented at the right time, it’s not the best advice.
What could be more important than knowing where an owner wants their business to go? The answer: Taking a hard look at where the business is today.
I‘m still dumbfounded by how many advisory firm owners want to jump right into their growth plans without evaluating where the business is right now. That’s the real starting place.
Perhaps many owners skip this step because they believe they already know where their business is. But remember, I said a “hard” look — not just the view from the front office or from 30,000 feet.
The Importance of Clarity I’ve come to realize that many firm owners have lost touch (or “clarity”) with where their business is today. Not last year, or five years ago, but where it is right now.
And without that clarity, marketing, networking, and referral programs won’t get owners to where they want their businesses to be. Unfortunately, in many cases, the substantial amount of money lost in these attempts frequently discourages firm owners from trying to grow at all.
However, the loss of clarity about where your firm is right now is the real reason your business isn’t growing — or growing fast enough.
To help firm owners gain clarity about where their businesses are and what they need to do to reach their goals, we have developed the following questions. These have been used countless times within our consulting practice to get a business growing again.
1. First, we look at leadership and structure. What is your management strategy? Do you make all the key decisions, is there a CEO who reports to you, or do you have a management team made up of the firm’s senior people — who may or may not all be advisors — who have input on and some influence over major decisions relating to the business? Ultimately, who makes the final decisions?
Giving senior staff the ability to provide input about and influence over major business decisions not only increases motivation but greatly increases the likelihood of success for new initiatives.
2. It’s important to have a clear vision of what type of advisory firm you are building. Who are your target clients, and what type of services are you providing for them? Are you “fee-only,” providing fiduciary advice to your clients, or are you primarily a sales-oriented business? And how does this affect both the services you offer and the clients you attract? Knowing where you want to take your business is important, but it won’t help if you’re not clear about where your business is today. Once that is done, you can then match that up with where you want your business to go.
3. Ask about the firm’s core values: How often do you review those values? What is your management strategy to support those values — that is, to instill those values in all your employees and monitor their compliance? These questions help you design your culture. In RIA firms, these issues usually are easier to address. But even RIAs have their challenges, such as if or when they should raise fees and/or AUM levels or offer flat fees, and how to tackle client spending vs. saving for the future.