Michael Gerber’s The E-Myth series is often cited as a must-read for small business owners—most of whom fail, Gerber says, because they possess technical skills without entrepreneurial acumen. In short, they know how to do the work but not how to run the business.
You may consider yourself among the best financial advisors in the country, but that isn’t going to ensure that your business will thrive. “E-mything” your financial advisory practice means stepping outside your comfort zone as a technician and into your role as a CEO. It also means working on your business, rather than in it.
Two Kinds of Work
The reality is, you need to engage in two kinds of work—what Gerber calls strategic work and tactical work.
Strategic work is internal; it’s about what you want to do. Strategic work involves asking some key questions:
- Why am I a financial professional?
- What will success look like? What will it feel like?
- What will my business look like when it’s “done”?
- When do I want it to be “done”?
Strategic work is the work of an entrepreneur. This work can be difficult because the answers aren’t always clear. But if you don’t do it, you won’t have a business—you’ll just have a job.
Tactical work is the process of implementing what your strategic work designs. It is external and what you need to do. Simply put, it is the “job.” Tactical work is easy because it’s what you’ve excelled at for years.
When you’re very good at doing the tactical work, you might make what Gerber calls the fatal assumption—that you know how to run a business that does the tactical work.
Think Like an Entrepreneur
How can you think like an entrepreneur, rather than a technician? Gerber says to look at the processes that deliver your products. The value of your business lies in these processes.
How do you ensure that the experience of your business is consistently reliable for all who come into contact with it? Vision. Your vision takes shape through planning, which Gerber says is the most important strategic work to begin doing—and to never cease doing.
Plans Vs. Planning
There is a maxim credited to Dwight D. Eisenhower: “In battle, I found plans to be useless but planning to be indispensable.” What’s the difference?
A plan is static. Planning, on the other hand, is dynamic. It is responsive to your environment. Planning anticipates change and keeps your mind agile. As you plan, questions to ask yourself include:
- Who are we?
- What do we do?
- How do we do it?
Step 1: Define your personal vision. Personal vision is the keystone to your business. Everything you do and everything you produce should be harmonious and support this vision.
Step 2: Articulate a vision for your business. The business you create should be one that contributes significantly to achieving your personal vision.
- What do you want your business to look like, to feel like, and to contribute to your life and the lives of your clients and community?
- Who are your clients?
- Why do your clients choose to work with you?
To help answer these questions, create an ideal-client profile. (Try out this template Commonwealth makes available.) You can also develop a written marketing plan to focus your efforts around this profile, allowing everyone in your practice to understand your strategy for reaching new clients.
Systems Bring Your Business to Life
After defining your business and your clients, focus on your systems, which can bring everything to life. These systems deliver your value proposition on a regular, reliable basis.
When I say systems, you might think of technology. Instead, think in terms of three other kinds of systems:
- Hard systems are tangible tools that communicate your values (e.g., your desktop, phone, printer, and the appearance of your office).
- Soft systems communicate your values in a softer manner (e.g., processes for acquiring clients, holding client reviews, networking, and reviewing staff performance).
- Information systems or metrics include the number of appointments, number of A clients, assets under management, client survey results, and so forth.
These systems work together to deliver your value proposition to clients, as well as to strengthen your culture and value system within the business. To ensure they remain responsive to the evolving needs of your business, be sure to assess and refine your systems regularly.
Manage the Process (Not the People)
The next step is managing the process, not the people. After all, people don’t want to be managed. They do want to belong to something important. So, manage the processes by focusing on the results that you and your staff are striving to achieve:
- Can improvements be made?
- Are sufficient resources given to the process?
Try to involve staff in process evaluations, encouraging them to think about how their efforts contribute to the growth of your firm. Consider using bonuses as an incentive for staff who play a role in growing your firm. The key is to link bonuses to goals that your staff can directly control.
The Role of Money
Money plays a big role in every business. Be clear about how money functions in your business. Ask yourself, when your business is “done,” what will it bring financially to you or your heirs?
Of course, it might be a long time before your business is “done.” But there is one certainty about the passage of time: Things will change.
Change is internal, not external. It’s something you choose to do, not something imposed upon you. Change is a process rather than an end in and of itself. Remember that planning—that key activity that targets opportunities—also anticipates change. That anticipation keeps your mind agile, constantly asking, “What if?”
In closing, I’d like you to think about this quote from George Bernard Shaw: “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”
Maria Considine King is vice president, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, an independent broker/dealer–RIA.