Just like all businesses, a financial advisor business goes through different growth stages. It is your duty as the business owner to know when your business is at a different growth stage and apply the right marketing skills that will scale your business. It's also important to maintain small business network security. But how do you know that your business is at a different growth stage? What are the signs to watch out for? How should you react at each growth stage?
Five growth stages
The start-up phase
This is the beginning of any business. It entails getting your first customers and making enough revenue to sustain your growing financial services business as you earn a decent income. Due to the rising number of financial advisors and the failure rate of the new entrants in the industry, most upcoming financial advisors do not manage to attract enough clients to sustain their businesses during the start-up phase. For entrepreneurs who make it past the start-up phase enjoy a financially rewarding career.But, the focus slowly shifts from getting new customers to serving the ones you have acquired. You also want to retain the customers on board. So, it would be the right time to invest in a reliable cyber security system that will protect your clients’ and crucial business information from being hacked. Top-notch customer service is paramount at this stage.
Capacity wall
The capacity wall is the work limit any person can manage on their own even when they have support staff and technology. Depending on your efficiency, the capacity wall can hit at $150,000 to $250,000 or at $300,000 to $500,000 revenue mark. To overcome the capacity wall stage, you need to hire junior financial planners who can handle client concerns. It is advisable to hire them before the capacity stage hits so that you have enough time to train and orientate junior financial planners. Hiring professional financial support staff is the stepping stone towards building an economically viable business. But, unless your goal is to build a large financial business, getting beyond the capacity wall may not be necessary. Solo financial practice is profitable.Building infrastructure
The infrastructure stage represents the explosive growth stage. The business now starts operating like a real business whose focus is revenue, profits, expenses, and economic value. The firms expand to hire managers, marketers, IT professionals and a COO to manage the entire business efficiently. Such growth is supported by rapid client base growth. As the business generates new customers and grows rapidly, you should upgrade your network security system and computer security if you invested in one during the start-up stage or install one at this point.Size wall
As a business grows, the marketing and business development strategies may no longer sustain the high growth rate. So, the growth rate is bound to decline. To get through this stage, the business must reinvest and convert to a branded firm with a group of professional partners. The reinvestment should correlate with the size of the firm.Scaled marketing
Scaled marketing is the final stage where the financial services firm became well scaled and built around a centralized brand name that is supported by a marketing and growth department that boosts value addition. The point at this final stage is to build a workable marketing strategy that allows the firm to maintain and accelerate growth despite the number of new customers it requires.
