Five steps to a successful business

All healthy and successful advisory businesses share five common attributes, according to Rod Bertino, partner and director of Business Health.

Bertino says he is regularly asked why some planning practices succeed, while others succeed less well, or even fail.

“You see a lot of things that advisers and owners are doing in the market, are there any common signs of success?” Bertino says.

On June 27 Professional PlannerHUB hosted its second live event for members, with Bertino providing an insight into the five characteristics that “all healthy practices” possess.

“It’s a really good question and we really gave it a lot of thought,” he says.

“We went back to the best practices we worked with…and what we found is that there were five common attributes to successful advice businesses.

“I understand that marketplaces are different, regulatory regimes are operating differently, pricing models are all different – but that’s a given.

“So I’m not saying there is a silver bullet [and] here is the answer for the perfect practice.

“They understand that they are running a business and they approach it like that”

“There is no one right answer to what you do. That’s not to say you can’t learn from the people that are doing it well.”

The first common attribute in every successful advisory business is “without fail, they usually have a great leader or a great leadership team”, Bertino says.

“That’s you guys. Whether you’re the owner of the business or advisers looking to take equity stake, it doesn’t matter.

“You are viewed as the leaders of your business.

“You can’t delegate this. This is your responsibility as business owners or future business owners – they think like successful business people.”

Bertino says that even though a buisness owner must “wear a few different hats around the course of the day”, when it comes to the business itself “they think like successful business owners, not talented advisers”.

“They understand that they are in the business of advice. They understand that they are running a business and they approach it like that,” he says.

“The other thing they do exceptionally well – and they devote an inordinate amount of time to doing it – is when you sit with them they can paint you a picture of what their business will look like in three, five years’ time.

“They have an incredibly clear vision for their business and when you sit and listen to them they can articulate what it will look like, how many staff they have, what sort of clients they’ll be dealing with, what sort of revenue turnover they’ll have, what the premises will look like, what sorts of products and solutions they’ll be recommending.”

Bertino says that “as leaders of your business you need to take your team by the hand and walk them into that future”.

The second common attribute Bertino discovered was that healthy businesses “surround themselves with the best available talent that they can afford”.

“They’ve come to the realisation, or they came to it long ago, that no matter how good they are their future success won’t be solely predicated on their own ability, it will be predicated on how good their team is,” he says.

“If you really want to take your business to the next level, you’re going to have to surround yourself with the best available talent you can afford and then give them the scope to do what it is you’re paying them to do.

“You don’t buy a dog then bark yourself.

“If you’ve got good people, give them the tools and leadership they need and then get out of the way and let them do what you’re paying them to do.

In order to maximise the return on this investment in staff, Bertino says he encourages business owners to look at payroll “as an investment you make every second Thursday” and not as an “expense”.

“Role clarity is incredibly important,” he says.

“If you’re going to get the best return you can out of the people you’re employing, they need to know what success looks like, they need to know how it would be measured, they need to know what you expect of them and they need regular feedback as to how they’re travelling, not once a year in a formal performance appraisal.”

The third common attribute of successful advisory businesses is that “they really do build a client-centric business; they have a client value proposition”, Bertino says.

“When you drill it down, these successful businesses truly understand who their target clients are.

“They know that not every client out there will see value in what they do for the price they charge.

“They’ve realised they don’t want every client, they’ll go broke trying to attract every client,” he says.

Bertino also says successful businesses seek regular feedback from their clients.

“They formally survey their clients, they listen to what their clients are telling them and they make changes because at the end of the day it’s those best clients’ opinions that’s most important.

“They segment ruthlessly and they all do it differently.

“We see no perfect way to segment clients but fundamentally, they build upon the premise that every client deserves to be treated fairly, with respect but not all clients deserve to be treated equally.