For most advisers the part of the job they love best is giving great advice to clients.
However, as the business grows and becomes more successful they can find themselves doing less and less advising and more and more ‘management stuff.’
The end result is a mass of frustration as they end up doing both advice and management roles in an unsatisfactory way.
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. It’s not possible.
And in fact, they’re both specialist roles. You wouldn’t hire a manager and ask them to do a bit of ‘giving 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 absolutely need to put a practice manager in place to do the ‘management stuff’, while you take on the shareholder and adviser responsibilities.
However, I was having a conversation a while back with Dominika Sieradzka, who works with many of my clients on all things back office and team related. She said: “Brett, if you and I went out and started our own advisory business tomorrow, we’d hire a practice manager from day one, wouldn’t we?”
She’s right. Absolutely we would.
The rationale is pretty easy to get your head around; 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 too.
What’s your plan?
If you’ve got plans to create a great business, then bite the bullet and get a practice manager in situ early in your development.
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, and then watching the business grow faster as a result of that investment.
The decision to hire a manager is no different to a decision to rent a nicer office, invest in new technology, or hire a new paraplanner or administrator. There’s a cost, but the question you need to ask yourself is: 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.
Are there risks? Yep, but that’s business (and life).
Clearly you can minimise those risks by getting the right person on board, which is a function of a strong recruitment process. Get help with the recruitment aspect if you need to.
Focus on the master plan and your big vision. Yes, it’ll hurt your cashflow for a bit if you’re a smaller firm. Yet by doing so you can then accelerate past your rivals. Focus on the medium-term value creation; that is, the income and capital value you’ll be creating. That’s what allows you to invest for the future with confidence.
What will a practice manager do?
I get asked all the time, “But what will a practice manager do? Is it even a full-time role?” I’m pretty sure I get asked because the current owner thinks to themselves, “I don’t spend 40 hours a week on this.”
The answer quite clearly is that for most firms it is a full-time role. 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 too.
- 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 regulatory returns 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 you don’t currently spend 40 hours per week on it doesn’t mean that isn’t what’s required, it’s more a function of your split focus between giving advice and managing.
What will you do?
If all 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 the follow-up question: “What will I do?”
Clearly, one answer is more rainmaking and advisory activity, which is probably your core skill.
But the real answer is more nuanced than that. You will still be involved to some extent in all 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 business 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, fulfilment 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.
The truth is, for most business owners, managing the business is a distraction from that focus.
Get a manager and watch your business grow faster than ever before.
Let me know how you go.