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Michael Kitces' #FASuccess Podcast: How Advising Small Business Owners Is Different, with Justin Goodbread

Justin Goodbread measures his firm's performance not on the returns tracked in a client's portfolio but rather how the small business owner's net worth increases over time.



My guest on today’s podcast is Justin Goodbread. Justin is the founder of Heritage Investors, an independent RIA based in Knoxville, Tennessee that supports nearly $150 million of assets under advisement for 120 client households.

What’s unique about Justin’s firm, though, is the way they’ve crafted a niche in working with small business owners to the point that the primary asset they advise on is the client’s business, not their portfolio, and performance is tracked not via the returns of the portfolio relative to a benchmark, but by how the owner’s net worth increases over time through creating enterprise value in their business.

In this episode, we talk in depth about what exactly Justin does to advise small business owners. The way his process starts with traditional financial planning but then shifts in great depth into business planning instead, the tools that Justin uses to do an informal valuation for every small business owner client to start the conversation on increasing enterprise value, the 8 business areas of leadership, planning, sales, marketing, people, operations, finance, and legal that Justin advises on, and why Justin has found it most effective to work with small business owners by breaking his advisory fee that may be as much as $10,000 to $20,000 a year into a more business cash flow-friendly monthly subscription fee instead.

We also talk about how Justin built his marketing to reach small business owner clients. The way he created the marketing avatars of “Frazzled Frank” and “Frantic Frannie” to hone and focus his marketing messages, how becoming more laser-focused in the small business owner niche helped his marketing, the content website and podcast he launched to reach more of his target clientele, and how going deeper into the small business owner niche ironically ended out bringing him more prospects outside of his niche as well.

And be certain to listen to the end, where Justin shares the unique certifications and designations including the CEPA and the CVGA that he obtained to build his expertise in advising small business owners. The five business books he reads over and over again every year to bolster both his business advice and how to run its own advisory business more efficiently, and his perspective on how we as financial advisors can do a better job creating more enterprise value in our own firms as well.

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