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Other Added - Maximizing the Value of Your Business at an Independent Broker Dealer (Beware the B-Myth)
Women as consumers are different from men as consumers in so many ways! Men are more direct-driven to their destination goal, while women meander and enjoy the journey. Women are multi-taskers and jugglers trying to stay in control while working hard at many different things in their life.As a marketer, you must first understand women as consumers. You must know why health and wellness is important to them in their multi-dimensional roles as consumers, caregivers, career women and community leaders. Gone are the days when most women were stay at home moms or at least similar in their life paths and stages. Today’s women are interested in health for a variety of reasons that relate to their multi-dimensional lives.Here Are My Top 4 Essential Strategies to Reaching and Engaging Women as Consum
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:<
Imagine you have two empty glass vases.One has a rock inside it. The other has a tennis ball inside it.We slowly start pouring water into the vases.The RockInitially the rock is singing away quite merrily, thinking “Aah… this is lovely. The water is pouring in nice and slowly. This is great. I wish I had some more water, but with time more water will come”… and so the water continues pouring in.At some point the water level rises to just under the rock’s nose. And it is starting to worry a bit. Perhaps there is now too much water for it to cope with? It starts scrambling around a bit.Before it knows what has happened, its head is completely under water. “Help. Help me. I’m drowning… I can’t cope anymore. This has now all become too much… Help. Someone hel
All this activity has to make you wonder: Why are all these people doing this? Are they trying to get their equity out of the business? Are they trying to preserve their businesses for a loved one? Are they trying to derive some economies of scale and some synergy by joining forces? Are they trying to gain some strength to protect themselves from the competitive onslaughts that are coming from every direction in the independent broker dealer, financial planning and investment advisory arenas? Yes, probably all of these reasons and many more.
Your independent broker dealer has a business. Do you? Maybe you do. Maybe you don’t. Maybe you just think you do! Maybe you’re wondering what you should be doing with this work area to which you report to every morning, this gaggle of clients that depends on your every move, these employees who support you on a day-to-day basis. Maybe you’re tired and want to slow down. Maybe you’re just burned out from dealing with the everyday hassles. Maybe you’re excited about your work and want to see it grow. Maybe you’re looking for a sensible and profitable exit strategy. Whatever your scenario is, start thinking about your practice and make a conscious decision about whether it is positioned the way you want it to be. Don’t be caught up in “The B Myth.”
The B Myth is my terminology for the situation where a broker, financial planner or investment adviser is under the illusion that he has a “business” when in actuality all he really has is a job. As John Bowen, a senior consultant in this area, says, “If you build a system which revolves around you, it is difficult to transfer the business to anyone else. You own a job, and it’s hard to sell a job.” Yes, I know. When you went in the financial services business someone told you that “you were in business for yourself, that you were building something for yourself.” In truth, that’s what you may have done -- built something for yourself -- which nobody else wants because it has little or no value to anyone but you. Beware the “B Myth!”
Some of you may be asking yourselves, “Haven’t I heard of this B Myth before?” Well, actually my concept is borrowed from one outlined by author Michael Gerber in his best-selling books, The E Myth and The E Myth Revisited and applied to our industry. The sad fact is many financial planners and financial advisers with independent broker dealers are suffering from the illusion that they have a business. In fact, what they do have is an unreliable stream of income, a lease, some employees, a group of clients, some commercial software, and some fixtures and equipment worth only 25 cents on the dollar.
The reality is this: The stream of income is a mixed bag of financial planning fees you generated, commissions you generated, and a slice of RIA fees that is growing slowly and is dependent upon your efforts to sell the client on this way of doing business. Your assistants or employees may not know what to do unless you are around to tell them and might scatter to the wind if they thought the business was for sale. Your clients think you walk on water because you have convinced them that you are what is indispensable rather than the advice they receive. In this scenario, hopefully you have been a good saver because there will not be much equity in your “business" to sell.
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business: The Trust Factor
I'm guessing that there are few things in greater need and shorter supply in life and business today than trust. A quick check of the dictionary defines trust as: reliance on the integrity, strength, ability or surety of a person or thing. In other words, trust means someone or something that can be counted on to deliver.Whether in life or business, it takes time and consistency to build trust with customers, clients, co-workers and employees. And once breached by failure to deliver, excuses, lying or otherwise abusing the relationship, trust is hard to regain. Since I spend a lot of time networking and working to build trust as a cornerstone of my marketing efforts, I've given alot of thought lately to what it takes to increase trust so others come to rely on YOUR integrity, strength, ability and surety.
Your independent broker dealer has a business. Do you? Maybe you do. Maybe you don’t. Maybe you just think you do! Maybe you’re wondering what you should be doing with this work area to which you report to every morning, this gaggle of clients that depends on your every move, these employees who support you on a day-to-day basis. Maybe you’re tired and want to slow down. Maybe you’re just burned out from dealing with the everyday hassles. Maybe you’re excited about your work and want to see it grow. Maybe you’re looking for a sensible and profitable exit strategy. Whatever your scenario is, start thinking about your practice and make a conscious decision about whether it is positioned the way you want it to be. Don’t be caught up in “The B Myth.”
The B Myth is my terminology for the situation where a broker, financial planner or investment adviser is under the illusion that he has a “business” when in actuality all he really has is a job. As John Bowen, a senior consultant in this area, says, “If you build a system which revolves around you, it is difficult to transfer the business to anyone else. You own a job, and it’s hard to sell a job.” Yes, I know. When you went in the financial services business someone told you that “you were in business for yourself, that you were building something for yourself.” In truth, that’s what you may have done -- built something for yourself -- which nobody else wants because it has little or no value to anyone but you. Beware the “B Myth!”
Some of you may be asking yourselves, “Haven’t I heard of this B Myth before?” Well, actually my concept is borrowed from one outlined by author Michael Gerber in his best-selling books, The E Myth and The E Myth Revisited and applied to our industry. The sad fact is many financial planners and financial advisers with independent broker dealers are suffering from the illusion that they have a business. In fact, what they do have is an unreliable stream of income, a lease, some employees, a group of clients, some commercial software, and some fixtures and equipment worth only 25 cents on the dollar.
The reality is this: The stream of income is a mixed bag of financial planning fees you generated, commissions you generated, and a slice of RIA fees that is growing slowly and is dependent upon your efforts to sell the client on this way of doing business. Your assistants or employees may not know what to do unless you are around to tell them and might scatter to the wind if they thought the business was for sale. Your clients think you walk on water because you have convinced them that you are what is indispensable rather than the advice they receive. In this scenario, hopefully you have been a good saver because there will not be much equity in your “business" to sell.
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:<
Most people get into a comfortable career situation and it becomes easy for them to maintain the status quo. As time goes on, and they get caught in a tunnel of everyday activity, it becomes increasingly difficult to change. They become blinded to the vast opportunity that the world has to offer. Indeed, they come to believe the Three Lies of Career Limitation:Security Lie: My company may not offer me the opportunity to make terrific money or to control my own destiny, but it is a safe and secure place to work. While my performance is not recognized as outstanding, I can count on having a job to come to every single day.Truth: The only security you will ever have is confidence in your talent, skills, and knowledge. If you are secure and self-aware, you will always be in demand
The B Myth is my terminology for the situation where a broker, financial planner or investment adviser is under the illusion that he has a “business” when in actuality all he really has is a job. As John Bowen, a senior consultant in this area, says, “If you build a system which revolves around you, it is difficult to transfer the business to anyone else. You own a job, and it’s hard to sell a job.” Yes, I know. When you went in the financial services business someone told you that “you were in business for yourself, that you were building something for yourself.” In truth, that’s what you may have done -- built something for yourself -- which nobody else wants because it has little or no value to anyone but you. Beware the “B Myth!”
Some of you may be asking yourselves, “Haven’t I heard of this B Myth before?” Well, actually my concept is borrowed from one outlined by author Michael Gerber in his best-selling books, The E Myth and The E Myth Revisited and applied to our industry. The sad fact is many financial planners and financial advisers with independent broker dealers are suffering from the illusion that they have a business. In fact, what they do have is an unreliable stream of income, a lease, some employees, a group of clients, some commercial software, and some fixtures and equipment worth only 25 cents on the dollar.
The reality is this: The stream of income is a mixed bag of financial planning fees you generated, commissions you generated, and a slice of RIA fees that is growing slowly and is dependent upon your efforts to sell the client on this way of doing business. Your assistants or employees may not know what to do unless you are around to tell them and might scatter to the wind if they thought the business was for sale. Your clients think you walk on water because you have convinced them that you are what is indispensable rather than the advice they receive. In this scenario, hopefully you have been a good saver because there will not be much equity in your “business" to sell.
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:<
When I was first promoted to management, I had to make a very difficult decision.I had been the best salesperson on the crew, and Bud was number two. He and I vied for the management job, and the fact that I got it meant that he had to report to me.This irked him.So, when I recruited, trained, and launched the careers of new salespeople, Bud found a way to poke holes in their boats, to slow them down, to discourage them from challenging his sales supremacy.In essence, my new people never made a credible challenge to his informal leadership.He lorded over them, mostly nonverbally, with cold stares and by invading their work areas. I firmly believed he was trying to make himself look good by keeping them down.And, I sensed his notion was if he could destabilize my leadersh
The reality is this: The stream of income is a mixed bag of financial planning fees you generated, commissions you generated, and a slice of RIA fees that is growing slowly and is dependent upon your efforts to sell the client on this way of doing business. Your assistants or employees may not know what to do unless you are around to tell them and might scatter to the wind if they thought the business was for sale. Your clients think you walk on water because you have convinced them that you are what is indispensable rather than the advice they receive. In this scenario, hopefully you have been a good saver because there will not be much equity in your “business" to sell.
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:<
Many women restaurant owners and managers have learned how to drive a starving crowd to their restaurants on a shoe string budget.On the other hand, many men restaurant owners and managers seem more likely to stick with the status quo and many keep using conventional marketing techniques even while they continue to lose money.The problem with conventional restaurant marketing techniques is that they are getting more and more expensive while they are proving to be less and less effective.Maybe a psychologists can explain why women are taking the lead of using unconventional restaurant techniques in the restaurant business. This seems odd because we know that men are usually more willing to take risks.Never-the less, women seem to be the more aggressive gender when it comes to restauran
Have I given you some food for thought? If so, here are some of the things you can do to make your “business” more attractive to a potential buyer, more reliable and supportive to your clients, and in the process more valuable for yourself -- whether you ever sell it or not! A good friend of mine (let’s call her Jane) who was successful at selling her investment advisory practice in California offers some key points to create maximum value in your business:
· Accept the fact that making your business attractive to a buyer and building value normally takes some time: Time to streamline operations and build teamwork among staff; time for you to aid in the transition of clients after the business has been sold.
· Don’t make your clients suffer under your own “myth of indispensability.” Being indispensable leaves your clients vulnerable when you are gone -- for any reason. Instead create systems within your office that deliver whatever you deliver in a consistent way regardless of whether you are there or not. That’s what successful franchises do.
· Understand that a knowledgeable potential buyer is looking for a documented stream of revenue over a period of time. Different revenue streams have different values. Commissions and one-time fees have much less value than consistent, annual investment advisory fees or consistent mutual fund trails.
· Valuing your business can be tricky. First ask yourself what you would reasonably pay for what you have. Then consult with a professional. Mark Tibergien of the management advisory services of Moss Adams, LLP in Seattle stresses the importance of “free cash flow” as a valuation measure -- net profitability of your business adjusted by fair market compensation for you and any other principals. To prove profitability and determine free cash flow, you have to keep good records. Knowledgeable buyers will normally ask for two to three years of records.
· Qualify your buyer: Does the buyer’s personality and style fit your clients? If a buyer scares the clients, they will leave and your ability to maximize the value of your business will be limited. Does he have the money to pay (cash and good credit)? As John Bowen points out, “Make sure that you are not taking all the risk in the transaction.”
Falling victim to the “B Myth” is easy to do but also avoidable with some awareness and planning. Do you want to own a “business” rather than a “job”? Then do what Michael Gerber suggests: Think about your practice as if it were the prototype for a network of 5000 outlets. At McDonald’s, the franchise owners don’t flip the burgers, but the franchises have tremendous value because they have installed the systems that turn out a very consistent product or service in the absence of the owner. Something for you to consider!
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