|
Get practice-building tips and information from our team of experts delivered to your e-mailbox every Thursday. Sign up for our free Practice Builder e-newsletter.
Unless you've pigeon-holed yourself as purely an investment manager with little interest in real financial planning, then you know clients come to you with all kinds of ideas on which they expect your advice.
Not all of these ideas make sense, nor do they all fit neatly into your areas of expertise, but wanting to be helpful (and, in the client's mind, valuable), you try to help anyway. If it hasn't happened yet, a client will eventually come to you with an idea for his or her own business.
I remember when my I first decided to change careers and become a financial advisor. I'll bet the conversations that went on between my wife and me (and between you and your spouse) were somewhat like the conversation you may need to have with your business-bound client, except now you're playing the role of the cynical spouse:
Advisor: You're planning to do what!
Client: I'm tired of working in a job I hate. I've decided to go out on my own.
Advisor: But you don't really know anything about running a sushi bar, do you?
Client: I like to eat sushi!
Advisor: Have you ever had any management responsibilities in any of your jobs?
Client: I was once in charge of supervising a summer intern.
Advisor: Do you know anything about marketing?
Client: No, that's why I hired you--to watch the market for me.
Hopefully, the cautionary conversation you have with your client will inspire a bit more hope than this. But, suffice it to say, clients won't always have the skills or capital they need to really make a go of it. Yet, some will, with enough guidance and coaching from you. The question is, are you up to it?
Mary Gibson and Glenn Kautt are, and they're happy to tell you how they do it.
Kautt, president of The Monitor Group in McLean Va., is, like his predecessor in the firm--Lynn Hopewell--a Harvard MBA, and he has started and operated six different businesses. He says he's not a business coach, but his experiences tell a different story: "I don't do much business coaching, per se, but do have clients who had careers and then wanted to start businesses. It's a subset of our clients that's growing because some clients are forced to retire, or just want to stay active in retirement."
The first question Kautt asks a client is much like that asked by the hypothetical advisor above: "The first thing I do is ask why do you want to get into business?" Typically, he says, clients name one or more of the following: financial security, the freedom to make their own decisions, family well being, building a organization that could survive and prosper against tough competition, bringing their creative ideas to the marketplace, and getting satisfaction from creating something that might last after years of hard work.
"What most starting entrepreneurs forget is the end-game. While it’s enjoyable to look back, they still must look forward. As a financial planner, I've found it’s much easier to start, than to end, a business. So I tell clients, if they start with the end in mind, things usually work out better all along the way, regardless of the size or nature of the business they're contemplating."
Sometimes, the best service an advisor can provide a small business wannabe is to give them a stiff dose of reality. Kautt does this by having his clients read Michael Gerber’s E-Myth and E-Myth Revisited. "In this way, they begin to understand what being an entrepreneur is all about, and how far they can take their business on their own. If these books don't scare them off, I discuss with them the financial exposure and tremendous uncertainty that goes along with any startup operation. We make sure they have the capital base to withstand the fiscal “shocks” that can happen with a startup."
The next step in Kautt's process is to cover with his client the various business functions that must be provided for. Either the client has the skills himself, or he knows he must obtain the skills some other way. "The five critical elements of any business are sales and marketing, production and operations, distribution, accounting and taxes, and human resources."
|
