Creating Your Ideal Life Through Expanding, Enhancing or Exiting
In this series of three actionable tips, I discuss the concept of multiplying the value of your business in alignment with your vision for an ideal life. Pareto Systems has developed and refined a process to help an advisor be best positioned to multiply the value of his or her business leading up to expanding, evolving, partnering, buying or selling, and to expect a profitable outcome in any scenario. If you have a vision for an ideal life and want to strategize to ensure a predictable result, contact Michelle at 1.866.593.8020 ext 1260 or via email at firstname.lastname@example.org to arrange for a complimentary 45 minute strategic planning conversation with me.
In school, you’re taught a lesson and then given a test. In life, you’re given a test that teaches you a lesson.” ~ Tom Bodett
The Many Benefits of Staging Your Business
Life is full of lessons that come in the form of examples and warnings. Examples of things done properly, and warnings where errors in judgment were made. The most effective people in virtually all fields of endeavour study both sides and assimilate in an attempt to create a predictable outcome for themselves.
One simple example I like to share that we can learn from when it comes to multiplying the value of a financial services business can be found in real estate. When you sell a home, it’s a good idea to hire a professional to stage it so a prospective buyer can see the home in its ideal form. Often a small staging investment can lead to an accelerated sale and amplified price. Whatever the future holds for you as you strive to move in the direction of your ideal life, the staging mindset should be applied well in advance so that you are out in front and well prepared.
The beauty of this approach is that it provides you with so many benefits beyond just buying and selling. Every week we speak with advisors who tell us what’s next for them in terms of actualizing specific goals. These come in the form of:
- Achieving the next level of productivity and client acquisition,
- Transitioning to the next generation for a smooth internal succession,
- Pursuing the next challenge in life by right sizing and taking a few marbles off the table,
- Shifting to the next gear of efficiency and profitability through structure and process, and;
- Moving to the next chapter in life by exiting the business or switching firms.
What’s Next for You?
The above list outlines just a few of the goals we hear on a regular basis. Whatever your ideal life looks like in your mind, there will be many moving parts that will require a holistic view on planning and preparation that will include:
- De-personalizing the business – so that it runs like a Swiss watch whether or not you are there,
- Developing and refining procedures – to create predictable and sustainable outcomes, and;
- Documenting your procedures – to fully maximize your intellectual and proprietary assets.
Success in Buying or Selling a Business is Achieved by Design, not by Chance
In this third installment of the Multiplier Method, I’d like to provide an overview of the 3-step process to use when executing the transition. After you have established a fit based on an alignment of interests between buyer and seller, you then shift your focus to deploying a communication process to transition the clients. Properly done, the seller will have multiplied the value of his or her business, and the buyer will predictably multiply his or her profitability and overall ROI by capitalizing on untapped opportunities:
- The Ramp-up – being prepared up-front with a methodical transitional process that will build predisposition and buy-in for the clients involved,
- The Launch – a sequential approach to communicate the process to clients and position it as a benefit and service to them, and;
- The Follow-through – how to fast-track clients to advocate status and uncover untapped business through an empowerment process.
Before I do provide the overview, I want to spend a moment on one of the most overlooked aspects of the buying and selling process. I’m referring to how the concept is positioned, communicated and perceived by the clients involved.
As you are well aware, client relationships are among the most valuable proprietary assets in the financial services sector. But it is common for advisors to be fixated on the asset level of “the book” and financial aspects of the transaction, so many overlook or trivialize the emotional impact on the client. And this isn’t even always a conscious issue. The buyer focuses on the assets and potential revenue stream but not as much on relationship issues. The seller focuses on the asset value being sold but not as much on the legacy issues involved. If you want to multiply the outcome and minimize the anticlimactic issues that can stem from this, you have to take a panoramic view.
Client Perception and Buy-in are Critical
The bottom line is this, this process has to be positioned and communicated as a benefit to the clients involved so that they don’t feel like pawns in a transaction. The investment world is all about confidence and trust. Whether you are buying or selling, the more effectively and consistently you communicate with the clients involved, the more you will multiply the value of what you are buying or selling.
1. The Ramp-up
The objective with this initial phase in the process is to create comfort and predisposition amongst the client base. We’ve seen many transactions in the past where the buyers and sellers did not get out in front of the client communication process to be well prepared to create awareness and clarity before the transition occurred. You can’t wing it and hope for the best. You need to have a clearly defined track to give you scale, efficiency and predictability. If clients are neglected, their imaginations can run wild and they can come to their own conclusions as to what this event will mean to them. Depending on the numbers of clients involved, you may need a 1:many process to address the B and C clients along with a 1:1 process for the A clients. Many sellers will stage the transition and retain some key clients through a protected list making the ramp-up process that much more important in terms of multiplying the value.
It takes time to put this together so we often recommend a 6 to 12 month ramp-up so that clients are well prepared and don’t feel this is being sprung on them. As a foundational kick-start, a call rotation and increase in proactive service is deployed including a FORM gathering process. Client classification tied to a service matrix is essential for clarity. Implementing a Personal Financial Organizer (PFO) process so that clients are aware of the full array of services provided is also an important step. Tangible tools such as Introductory Kits and using agendas in review meetings help take the business from vapour to paper and amplify professionalism. A client advisory council and other seed planting steps about future client service enhancements are also very effective.
2. The Launch
As you segue from the Ramp-up to the actual transition, a reframing process is a major piece of the puzzle to ensure the rubber hits the road smoothly. Essentially what you are doing is saying “this is how things used to be, this is how things are today, and this is what you can expect going forward…” The clients have an expectation and frame of reference based on the relationship they’ve had to this point. It’s essential to roll-out the process so that they view this as an enhancement and benefit to them. Change is not always embraced well by people. The transitional process has to ensure a soft landing so that they are competitor-proof and focus on what you are worth to them rather than what you cost them. Remember, you want to be paid for your skills, not for your time. The commoditization of this business is well underway and often client defections can occur during this process if you haven’t done a good job communicating your unique value proposition.
3. The Follow-through
Once the transition has been formally put into motion, it is essential that the buyer and seller have a predictable and sustainable process in place to meet and exceed the expectations set for the clients involved. For the seller, the transaction has been multiplied up-front but the focus now shifts to legacy. For the buyer, the concept of multiplying the value of the clients acquired is really just getting going. The transitional on-board steps, and the ability to uncover new business and fast track clients to advocate status, can be achieved predictably using a sequential communication process. As I’ve said before, this isn’t a transactional approach where you are getting someone to agree with a change in their reality. Nor is the transition accomplished with a simple announcement process. It is sequential and then blends into your service model to ensure consistency. You want them to buy-into an enhancement in their lives to the point that they feel compelled to empower you more and endorse you to others. That takes time and it requires a process. Those who are prepared and patiently roll-out a communication plan will maximize their new and existing client relationships and multiply the value of their asset.
Continued success!Photo credits: BennyLin0724 (bed), HowardIgnatius (rocket) via FlickR Creative Commons
A key step in our approach at Pareto Systems is conducting a 45 minute complementary evaluation call with financial advisors who are considering hiring us to help them achieve their goals. If you would like to talk to Duncan to discuss your vision for the future and outline what you aspire to achieve, contact Michelle at 1.866.593.8020 ext 1260 or via email at email@example.com. Regardless of whether there is a fit, the conversation will be of value in and of itself.
Learn more about Pareto Systems
Watch our 5-minute introduction video on our homepage to learn more about how we work with advisors to have them run a more profitable and efficient business, and how you can take steps to explore if our process is a good fit for your objectives.
Our best-selling book is available through Amazon.com and now on Kindle as well. It outlines a 90-day plan to build your client base and take your business to the next level. Learn more about our advisor productivity process by clicking here to read a sample chapter.