For most advisers, the part of the job they love best is giving great advice to clients. But as the business grows they can find themselves doing less advice and more management stuff.
The end result is a mass of frustration as they end up doing both roles – advice and management – unsatisfactorily. If this is you right now, let me put your mind at rest; you’re not a miracle worker. No-one can perform both these roles well at the same time. You wouldn’t hire a manager and ask them to do a bit of advice on the side. So why expect the reverse for yourself, or your fellow owners/advisers?
I’ve said for years that once you reach £600,000 to £800,000 of turnover you need to put a practice manager in place while you play the shareholder and adviser roles.
I had a chat recently with business consultant Dominika Sieradzka, who works with many of my clients on all things back office and team related. She said: “Brett, if you and I started our own advisory business tomorrow, we’d hire a practice manager from day one, wouldn’t we?”
She’s absolutely right. We wouldn’t want to be bogged down with the day-to-day management when we could be doing the things we love and are good at. The same rationale applies to you and your business.
I’ve got a client I’m working with who is keen to buy a house and is saving for that goal. However, they also realise they need a practice manager and right now they can’t do both. Clearly, it’s a personal choice, but my advice is to invest in the business and get it right. That means sucking up the cost of the manager for now, then watching the business grow faster as a result.
You need to ask yourself how much more business might you be able to do if you could get the right person in the role. Usually the answer is far higher than the investment, which makes it a smart decision.
Focus on the master plan. It’ll hurt your cashflow for a bit but you’ll soon accelerate past your rivals
Are there risks? Yep, but that’s business (and life). You minimise those risks by getting the right person on board, which is a function of a strong recruitment process. Get help with this aspect if you need to.
Focus on the masterplan and your big vision. It’ll hurt your cashflow for a bit if you’re a smaller firm. However, you can then accelerate past your rivals. Focus on the medium-term value creation; that is, the income and capital value that you will be creating. That’s what allows you to invest for the future with confidence.
You may ask: “What will a practice manager do? Is it even a full-time role?” For most firms, it is – just take a look at some of the key responsibilities and accountabilities:
- Processes and procedures: Overseeing all business processes and procedures, making sure the business is efficient and organised. That would include managing IT.
- Human resources: All hiring, firing, team development and performance reviews, as well as general organisation of the team.
- Compliance and finance: Budgets and forecasts, submitting RMAR reports and liaising with external accountants and compliance support suppliers.
- Marketing: Establishing and coordinating marketing objectives, plans and programmes. Directing and project managing all marketing activity and evaluating its effectiveness.
When those roles are fully expanded into a complete job description, it’s a full-time role. The fact that you don’t currently spend 40 hours a week on this doesn’t mean that isn’t what’s required; it’s more a function of your split focus between giving advice and managing.
If all of those things are now being handled well by a full-time manager, one of the issues that I’m sure causes some concern for owner advisers is: “What will I do?”
You will still be involved to some extent in all of these areas, but at a strategic and directional level. Your manager will be reporting to you, or the board if there are multiple owners. Decisions relating to important areas like marketing, finance and compliance will be made with senior leadership input.
It’s then up to the manager to implement the business plan as agreed by the owners and leaders. You won’t lose control, but you won’t have to be so involved in the minutiae of actioning and following through your strategic decisions.
This is a key step in your business development if you want to really unleash your full potential. In my experience the key to fun, fulfillment and profitability is doing what you love and are good at, and nothing else. Delegate everything that can be delegated and do what you’re best at.
Brett Davidson is founder of FP Advance