As a network which has a significant number of small firms under its umbrella, we’re very conscious of the pressures firms continually face but also that, when it comes to expansion, running before you can walk can end up with a severe case of business cramp before you know it.
So I was intrigued to see the Mortgage Solutions poll about how brokers access investment cash for their business in order to expand. Given the majority of advisory practices fit into the small category, I was not surprised to see that most would access such cash via their own profits or through personal cash.
However, what was perhaps most telling was that 51% said they didn’t access investment cash at all, which suggests they do not have any expansion plans and they are happy with their lot.
Of course, there is nothing wrong with this approach and when you are running a successful business there is a tendency to stick to what you do best, and continue to do it.
However, competitive pressures will always be there, and while no-one can predict what might come over the horizon, one suspects that issues such as technology, robo-advice and lender attempts at direct sales are only likely to grow as the market shifts and morphs.
Expand when strong
That being the case – and given the pre-eminent position advisers currently hold – perhaps now is the time to consider growth and expansion from (one would hope) a position of relative strength.
No-one only you’ll fully understand whether now is the right time, but if you have been holding back on pushing the business forward, now might be the right time.
Expansion of course comes in many different shapes and sizes, so the first (and major) point would be to outline with absolute clarity what you are seeking to achieve:
- Is this just about freeing you up from all those administrative tasks?
- Is it about bringing more advisers on board to target specific demographics and sectors?
- Perhaps it’s to take advantage of a local business opportunity?
- Or to join forces with a competitor?
Knowing what you want to do, and where you want the business to go, will allow you to expand appropriately and to have a sound plan in place to do this.
How you go about expanding may well come down to the type of firm you are. As an AR, might you be able to draw upon the experience and expertise within your principal partner who are likely to be a bigger operation and will have walked this path before?
From our experience, firms wanting to expand do so from the right head space and for the right reasons, it’s just that they might not have the experience to see how best to do it.
Having like-minded firms within the group, who have been through this and can act as mentors, can also be incredibly helpful.
So, if you are looking to expand, do not be afraid to go out and seek support, help and advice from those who’ve done it before you.
Experience in this market is vital and just having a few conversations can help steer you in the right direction and perhaps stop you from choosing poor options.
The first step is to understand where you want to go, then make sure you know how to get it done and the best methods to get there. It might not be the headache you envisage, or cost the world, but it could take your business onto bigger and better things in a relatively short space of time.