What to do before starting an advice business

Speaking on the latest episode of The ifa Show, chief executive of Lifespan Financial Planning Eugene Ardino argued the importance of having a well thought out business plan prior to starting an advice firm.

“I think moving from being a single adviser practitioner to running a multi-adviser firm is quite a transition,” Ardino said.

“You go from being predominantly a practitioner, someone who gives advice, to still being a practitioner in most cases, but also having to run a business manager, manage staff, manage other professionals, effectively managing your peers, which is, I think, more difficult, and a different proposition to managing your own support staff.”

He explained that being a multi-adviser practice owner requires a different skill set to being a single practitioner, and that it also triggers a different lifestyle as well, noting that handling HR issues and performance management of staff is a “very different proposition” to working in relative solitude.

“Is it what you want to be? Do you want to be someone who’s spending a very large chunk, perhaps the lion’s share of their time managing a business and managing staff? Or do you want to be focused on being a practitioner?” Ardino said.

“On the lifestyle side, you’re now more of an entrepreneur and a business operator. So that comes with a whole different set of pros and cons. You’ve got to make sure that you’ve got the right constitution for it and that it’s what you want to be doing.”

Appearing on a previous episode of the podcast, Lana Clark, senior consultant at Elixir Consulting and GSD Lab founder, explained that employing a practice manager is essential for growing advice firms.

She noted that the flexibility of the role can help fit the exact needs of the firm, while also allowing the practice owner to take on their preferred role within the business, whether they want to be a practitioner or step back to primarily act as a business owner.

“I think it’s about deciding what your practice manager or the role of the practice manager does in your business,” Clark said.

In addition to understanding business goals, Ardino also stressed the importance of adequately planning for the financial impacts of running a business, particularly when considering bringing on additional staff.

“Make sure you can finance it because it would be a real pity if you just ran out of money before you’ve given it a reasonable enough chance, and try to make sure it’s realistic, perhaps get input from someone else who’s qualified to give that input,” he said.

“I think that’s the most important part because if you don’t plan that well enough and if you’re not realistic with your plans, you’re not giving the business a good enough chance.”

To hear more from Eugene Ardino, tune in here.