The first few years of building an advisory firm from scratch are typically the most demanding for solo advisors since this often means putting oneself ‘out there’ as much as possible – working through lead generation services, trying to network with Centers Of Influence (COIs) and the community at large, and battling through all of the “no” s needed to get a “yes” (and therefore a client). Next comes the challenge of establishing patterns and processes to onboard and retain clients, getting referrals, hiring and training staff, and doing the (very rewarding) work to turn a fledgling firm into a sustainable practice.
However, as the firm matures, many advisors find themselves at the “capacity crossroads”, which marks the point when the ongoing demands of running a firm and caring for clients begins to completely fill an advisor’s day-to-day schedule and their capacity to continue to find and onboard prospects becomes severely diminished… at least, if the advisor wants to avoid burnout.
There are certainly many aspects to this capacity crossroads, but perhaps an under-discussed factor is that the marketing tactics often used by new business owners to build their advisory firm – COIs, cold-calling, networking, and online referral services – are, in fact, creating blocking points in an advisor’s ability to continue to scale their firm’s growth. This is because the tactics generally used tend to be time-based marketing tactics, and as the firm’s client base and revenue grows, the advisor’s time becomes increasingly valuable and in short supply. Furthermore, even though these soft-dollar marketing tactics don’t have an associated bottom-line expense that requires payment with hard dollars, they can still be ‘expensive’ because of how much of the advisor’s time they need.
To alleviate this time capacity shortage, advisors have 3 options to reduce time-based expenses and increase money-based expenses, allowing them to regain their (more valuable) time that they can invest into the continued growth of their business. The first is to automate certain tasks/tactics, such as scheduling social media content, project management for recurring tasks, or sending reminder emails for webinars. The second option is to delegate tasks/tactics by handing off certain tasks/tactics to an employee or contractor, often decreasing the soft dollar cost (when the other person’s time is less expensive than their own). The third option is to eliminate certain tactics entirely, thus reducing both the hard- and soft-dollar costs.
Ultimately, the key point is that marketing, when limited by an advisor’s own time and energy, can only take a firm so far. To get to the next level, advisors can position their firms for success and protect themselves from burnout and overwork by using marketing tactics with decreased dependency on their own time… while still continuing to grow!Read More…
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