Life is all about balance. In business you need to balance dreams and reality, passion and planning. Passion is necessary to sustain you through the hard work needed to make your dreams a reality. Planning is necessary to direct your energies and money into a dream that has a high probability of success.
My dream was to play chess for a living. At ten years old I was playing on the State Department chess club against university and corporate chess teams. My hero was Bobby Fisher, the brilliant but quirky American player who defeated Borris Spasky in 1972. Studying chess consumed all my free time. Turning my hobby into a vocation was a wonderful dream, but impractical. The odds of success were too low. I was not the next Bobby Fisher.
Salaried positions tell you every payday exactly what your effort was worth. When you are in business for yourself, the market will still tell you what it values, but the feedback isn’t always immediate. You have to listen carefully.
Here are five means to help you navigate the path most likely to make your business venture more than just a dream.
Research income averages. There are published industry salary and profit surveys for many professions and industries. These statistics can give you an average income by number of employees and also suggest what characteristics have the greatest impact on the success of your business.
In our business, fee-only financial planning firms with multiple advisors do better than solo practitioners. Clients want a depth of expertise both for backup and specialization. As a result, we currently have three registered investment advisors each with unique credentials.
Apprentice in a similar venture. Historically, when people wanted to learn a trade they would find a master and apprentice with them until they were ready to go into business for themselves. You accomplish the same thing when you work in a business similar to the one you want to start.
I apprenticed under George & June Marotta, my parents, who were among the early pioneers of the fee-only financial planning field. They provided an amazing resource of wisdom why some business models work better than others.
For example, they started out giving hourly advice and found that many clients failed to implement the advice they were given. Others implemented it inefficiently because they lacked the appropriate expertise. And then at other times clients would refrain from seeking advice altogether because they did not want to pay an hourly fee. These mistakes could be costly to the client.
Because of this experience, our fees are based on a percentage of assets under management. This allows us to provide advice and also handle implementation. Our clients can ask our advice without worrying about extra charges.
Make a business plan. A business plan is a detailed blueprint for how to make your dream a reality. If you think businesses just open overnight, I’d love to meet you for lunch at the Bodo’s on the Corner!
A business plan should break the process into smaller steps – steps that can reasonably be accomplished. You can’t eat an elephant all in one bite, and you can’t pursue a business plan that requires extraordinary feats.
Even existing businesses need planning. At Marotta Asset Management, Inc. we have a yearly review of what we are doing well and what changes should be made to provide better service.
Open a franchise. Franchises can provide the business expertise (blueprint) required to make you successful. If you have the capital, their vested interest in your success and their infrastructure can increase your chances of being profitable.
Our firm is not part of a franchise, but we are members of a trade organization known as the National Association of Personal Financial Advisors (NAPFA). They provide resources, name recognition, and standards of quality the same way a franchise does.
Those interested in financial planners can find NAPFA members in their area by going to www.napfa.org or calling 800-366-2732. NAPFA also has regional and national conferences that provide resources and training in a wide variety of financial planning topics. We participate in a monthly study group that provides us with opportunities to share financial planning ideas with other fee-only firms in central Virginia.
Start small. Many businesses can be started in your spare time, from your home. This allows you to test the waters and determine if the market can eventually support you on a full time basis.
I started providing computer support for my parent’s firm years before I joined as a registered investment advisor. Our firm began without the expense of an office by working out of our homes. Keeping expenses low is one of the best ways of limiting the risk of a business venture.
Every game of chess begins with each player’s dream of winning. The player who can plan the furthest ahead and find the right sequence of moves to make their dream a reality succeeds.
I did not become the World Chess Champion, but I am enjoying a career that is much like playing chess in slow motion. Only in investments, everyone can win and the prize money is much better!
Photo by Johannes Plenio on Unsplash