Ahead of Financial Planning Week, Mark Stokes argues nothing is more valuable in helping make your business more profitable than thinking hard about what an outsider would make of it.
Whatever your business's goals, the best way to transform it into a more profitable operation is by running it as though it were permanently up for sale.
Left to our own devices, we all tend to become set in our ways. Imagining you could be asked to justify any part of your business process at any time, however, will give you the discipline to transform it into a unit that will deliver better services to clients, a greater sense of engagement among your staff and increased profitability.
In reality, this imaginary buyer is you, the current business owner. It is you who needs to see management information that is two days old, not two weeks old. It is you who needs to know key staff buy into the long-term story of the business. It is you who needs to know the company avoids unnecessary risk and targets its most profitable business sectors.
At a practical level, this means taking a cold hard look at several key areas, including operational efficiency, staff engagement, marketing and last, but by no means least, understanding and sticking to your core business proposition.
Many advisers are guilty of making little or no use of their back-office system. If you cannot find the telephone number or a list of your client's investments within a matter of seconds then you are costing yourself money.
It goes without saying you should make sure all staff, including yourself, stick to business processes, but these processes also need to be sensible. That means making sure all forms and questionnaires are filled in properly. But it also means, if there is a question that never gets answered because it is pointless, then take it off the questionnaire.
In an ideal firm, staff should only deal with most documents once. Operational efficiency is particularly important given the increasing tendency of providers to require advisers to upload data themselves. Wrap platforms have become commoditised products, and you do not want your high fee-earners becoming data processing operatives.
Slick operational systems should also stop you from overpromising and under-delivering. Make sure the timescales you give clients - and your own staff - are realistic. If you leave clients in the dark they will start to question your professionalism. Keep contacting them to let them know what is happening. The more touch points you have with your clients, the more opportunities you get to impress them.
It is a cliché to say your staff are your most important asset but only because it is true. So, don't be stingy when it comes to rewarding them - lost productivity through high staff turnover, particularly for a small firm, can be significant.
Advisers need clients, and everyone will tell you professional introducers are the best way to get them. Many advisers find, however, they do the legwork with local solicitors and accountants yet it doesn't translate through to actual referrals. Make a concerted effort to engage them as clients themselves - professional introducers who are also clients will be valuable advocates for your business.
It is worth remembering you do not own clients, you serve them. Everything you do to create a better business should translate into a more fabulous client experience. When you have this approach in place, all your clients can be part of your marketing effort - you just need to nudge them into action. Advertise yourself at the end of every meeting by saying: "We have built our business through referrals - 85% of our clients have come through personal recommendations, a statistic we are very proud of. If you know other people who need planning, do ask them to get in touch with us."
Core business proposition
Arguably, most important of all is understanding your core business proposition and following through with it week in, week out. That can mean accepting you do not need to be independent if you are not scouring the entire market every time you make a portfolio recommendation.
Or, if you have 15 partners and a discretionary fund manager, but a client says they do not want that, tell them to go elsewhere. Have the strength of your convictions and stick to your core proposition.
Stepping outside your core proposition for the occasional client is not only time-consuming, it is also very risky. Don't dabble in things you don't understand. If you are a tax adviser, wealth manager or financial planner then be well-informed, disciplined, and be the best you can be within your field of expertise. Of course, engage with other professional advisers such as tax accountants and solicitors, when you need to.
Above all, set aside time to think about the big picture. Nothing is more valuable than thinking about what an outsider would make of your business.
Mark Stokes is managing director of Lewis Chambers "powered by Succession"
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