You can’t do everythingFor 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 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. 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?
You need a practice manager
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 play the shareholder and adviser roles.
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. Domi is highly regarded, and when she speaks I always try to listen. 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 that 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, or invest in new technology, or to 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 cash flow 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’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 & Procedures
Overseeing all business processes and procedures, making sure that the business is efficient and organised. That would include managing IT too.
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.
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 per week 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 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?”
Clearly, one answer is more rainmaking and advisory activity, which is probably your core skill.
However, the real answer is more nuanced than that. 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.
However, 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.
Practice Managers make perfect
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.
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.
“You wouldn’t hire a manager and ask them to start ‘giving advice’. Why do the management yourself?”
More about Practice ManagersHere’s what Dominika Sieradzka had to say when I asked her about the Practice Manager (PM) role.
“In my experience it’s a full-time role as this person is effectively responsible for running and managing the practice. Their key responsibilities include all aspects of HR, finance, compliance, processes and procedures, internal service standards, business improvement and development, and IT and marketing oversight.
I don’t believe that this can be done well on a part-time basis, as there is a lot of work involved across a number of different business areas. I personally believe that many businesses don’t expand and evolve as quickly as they could, as they haven’t got a person responsible for the management of the practice in a true sense.
In smaller, businesses owners/operators are often firefighting and team members wear several hats. Owners/operators who are main business winners haven’t got the capacity to fulfil the role of the Practice Manager at the same time. Similarly, it’s not a good idea for the Paraplanner to be a part-time Practice Manager at the same time as the two require very different skillsets and in most cases both are full-time roles.
Firms without PMs often fail to implement great ideas they have and neglect important aspects of running a successful practice, such as continuous development of the team in a structured way.
Even the most innovative ideas are just ideas if not implemented. Success is based on execution of great ideas, and this is why hiring an excellent PM is so important.”