In the world of financial advisory practices, true enterprise value has a different and far less quantifiable definition – the ability of your business to outlast its founder while continuing to sustain and grow. But how exactly does an adviser go from maintaining a practice to building a scalable, sustainable and durable business with enterprise value?
Embracing your role as CEO and team leader
Most importantly, you need to shed your sole practitioner mindset and embrace your role as advisor CEO, stepping back from day-to-day duties long enough to begin thinking long-term strategically and aligning personnel, technology and marketing decisions with clear and achievable goals.
No doubt, you’ve seen an increase in the complexity of your firm’s strategies, service model and organizational structure over the years. The question is, have the skill sets and roles of your team kept pace? Have you effectively built a highly specialized, interdependent team that is able to more efficiently manage these more complex client relationships and scalable to adapt to future growth without disruption?
In a recent blog, I touched on the important and fundamental difference between “a work group” and “a team.” The former is merely a group of people who are required to work together to process a great deal of complex work on behalf of an advisor – task-oriented in their focus rather than strategic. In the latter, however, individuals work collaboratively and interdependently, always with a strategic focus. Ultimately, the more your team works interdependently, the more durable it will be and the greater your resulting enterprise value. To that end, it’s important to maintain your focus on:
Building enterprise value needs to be a top-of-mind consideration from Day 1. It can’t be something you turn your attention to only when you begin considering an exit strategy and how best to monetize your equity. If you wait until then, it’s simply too late. A sustainable and durable business must be bigger than any one individual – even its founder and principal owner. For the business to endure and thrive, both your clients and your team must understand and embrace that reality.
To read more about Building Enterprise Value, check out another on of my blogs written for Investment News: 5 Steps to Building Enterprise Value
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