For financial advisers looking to expand their business into other markets, the family-owned small business offers vast potential for you since small business owners need retirement, estate and succession planning products and services.
Before breaking into the market, I offer four steps for financial advisors trying to get their foot in the door.
1. Define the market. Knowing the characteristics of small business owners and how they operate their businesses is crucial for financial advisers to gain solid footing in the market. Keep in mind, most family businesses have an informal organizational structure. For many small business owners, their personal and professional lives are often interchangeable.
2. Make a connection. A good way to meet clients is by asking your existing clients if they know anyone in the small business market. I have also found that interviewing accountants or lawyers that specialize in the field is an effective way to build great relationships. This allows you to learn more about the market from the people who may refer their clients to you in the future.
3. Collect information. When visiting small business owners, collect basic information such as primary shareholders, profit, loss, cash flow, overhead, salaries, assets, liabilities, etc. Collecting as much information as possible will help you when you’re assessing the business for existing opportunities and discrepancies.
4. Make a plan. After all information is reviewed, schedule another meeting to discuss projects or services that will benefit the small business owner.
