Brad Johnson: Welcome back to another episode of Do Business, Do Life. Brad Johnson here. And today, we’re going to dive into another solo episode. This one should be a really fun one for you all up there. Topic of the day is if I was to start over as a financial advisor, what is the first thing I’d do? And really, this, today’s episode was inspired by a real life story, and it happened about a decade ago. To conceal the identity, we’re just going to call the two parties involved, Brad and Sarah, so Brad being me, Sarah is my wife’s name.
So, it was a husband-wife team, and this was about 10 years ago. I remember exactly where I was. I was in a conference room, and this couple at the time had about, I think there were 3, 4, maybe 5 million tops of assets they were gathering. So, they were both in their 20s. They were just getting started in the financial advisor space. The husband, Brad in this scenario, was the financial advisor. The wife, Sarah in this scenario, kind of was in charge of the operation side, and I found that to be pretty common for a lot of family-run practices out there.
And so, they were just getting rolling, maybe a couple of years in to this new venture, starting to have some traction. And we got in here. And one of the things as we started to dive in, like, you really need to start to understand, okay, let’s take a snapshot of where you are today. So, they started talking through, okay, we have this practice. It’s in kind of small town, but very close to a much bigger market place. And they started laying out this vision. And what they started talking about is, okay, well, we’re here right now, but the next thing we’re going to do, we’re going to open up an office in Florida, and then the next office will open up in California. And then the next one is in Texas. And they started out laying out this grand master plan.
And what was interesting when I really looked at the fundamentals of that business at the time, they hadn’t even really got home base running yet. And there was already an idea of we’re going to expand here and expand here. We’re going worldwide. And so, I listened to this. And once they were done, once they took a pause, I basically asked a very simple question. I said, “Hey, well, thank you for sharing the vision. I’m curious, what’s the reason behind opening up all of these offices all over the country?” And they both paused for a second and looked at each other. And then the wife, Sarah, in this instance, said, “I don’t know. I just thought that’s what we were supposed to do.”
And I think one of the things that’s the lesson out of this story and we kind of all laughed about it and I said, “Well, hey, what if we build this thing with intention based on what you actually should do?” And what was really cool, there began a really cool friendship there and that firm grew exponentially. But what I can tell you is had they gone down that original track, it would have led to chaos, it would have led to a very high, unreasonable spend that was not required, and they would have been skipping a lot of steps.
And so, as we start to get into today’s conversation, one of the things I want to do, this conversation applies both to those just getting started, but also, I have found many of these lessons apply to established businesses and firms that have maybe just skipped a few steps along the way. And so, we’re going to get into three big concepts that I think are pillars in building any financial services firm. And the cool thing is this is based on hundreds of examples at this point in my career.
So, number one, we’re going to get into the number one missing role in finance and why not having that is a real issue. Number two, we’re going to get into the number one most important number in any financial advisor’s business. And number three, we’re going to get into why you should run your business like a business.
So, let’s dive into the first one. And by the way, I should say, I think oftentimes, like, this isn’t your fault as a financial advisor. I found it’s very common. You get into this business and it’s just really the survival of the fittest. So, it was never really like I had a business plan as I dove into this business. So, this is kind of a very basic high-level business plan out of the gate.
So, number one, in order to run a successful business, so the number one missing role in finance, you have to maximize your time. And I remember an early lesson from Michael Hyatt. Many of you are familiar with him. He’s been on this podcast, big influence in both my business and life. And he was doing a coaching session with my business partner, Shawn, and myself. And Shawn asked him, “What is the first hire that you would make if you had to restart your business from scratch?” Without hesitation, he said, an executive assistant.
And I think what’s interesting is even from a number of conversations with super successful financial advisors out there, many super successful financial advisors don’t even know, when you say executive assistant, what that job description means. And the number one simplest way I would describe it is their job is to help maximize your time as a founder, as a CEO, as a business owner, and allocate it accordingly based on the stage of business you’re in, which when we were at five team members four years ago to close to 100 today, those are very different ways that my time is now allocated. And so, Brooke, on my team, we’ve had to evolve. In fact, she just texted me today. I think it’s time for a calendar audit because there’s a few things that need to be tweaked based on the stage we’re at.
And so, as you think about that, if you do not control your time as a business owner, then basically, your business control is your time or basically, your calendar is just going to be the chaos of whatever gets thrown at you on that given day. And so, having some form of structure, some form of prioritization where you’re focusing your attention in the place where it’s going to make the most impact and steer the business in the most important places is going to be really key.
So, good news, we’ve already done a full-blown episode on this. It was Episode 66. So, if you’re watching this on YouTube, Do Business, Do Life, Brooke Martin, Episode 66, that should pull it up. If you’re on audio, same thing on your podcast player. But we really get into all of the different ways that Brooke prioritizes, whether it’s my ideal calendar, whether it’s air traffic control of booking appointments, scheduling travel, how she worked side by side when it comes to the family calendar with Sarah, the business calendar with myself, and all of, obviously, our key stakeholders in the business. But it’s basically a master class on what Brooke does day to day for me. So, if you’re looking as far as, hey, what is an executive assistant, how do I maximize them and their role in this business? That is the episode to go listen to.
And then the last thing I’ll say on that point is what’s really interesting, if you look at Fortune 500 companies’ CEOs, I would say almost without exception, they have an executive assistant or a chief of staff. And what’s interesting, when you look at businesses and finance, even those that have scaled, I’m thinking of 300, 400, 500 million of assets per year, oftentimes, you find no executive assistant to be found. And I think that is why it is the number one missing role in finance. And I’m on a mission to change that because if you’re going to do business and do life, you have to control your calendar or it will control you.
Okay, so this takes us to number two, the number one most important number in any financial advisor’s business. And actually, this is a little bit, I say the number one most important, this depends on the stage in your business. And if I was starting over as a financial advisor, the number one most important number would actually be how many new appointments are on the calendar in each given week? Because as you start as a financial advisor, you can be the smartest, brightest, build the best financial plans in the world, but if you don’t have people to see, you have no revenue and you have no business. And what’s interesting, this number one most important number actually evolves as you grow. There’s an argument, an hour of your time could also be the number one most important number in your business, i.e., what’s an hour of your time worth and where you dedicate or allocate those hours of time?
So, today, we’re going to focus on the number one most important number, being appointments on the calendar. And there’s actually a future episode that I’m going to share with you all. That’s a fun little framework when it comes to an hour of your time and how to think about it in a very different way so that you’re maximizing it. So, I’ll tease that one, and we’ll come back and hit that in a future episode.
So, as we go into how many appointments are on your calendar, especially as you get started, here’s a scenario I want to share with you. And what I found is you don’t want to overcomplicate this. But as you look at marketing and getting a business up off the ground, what’s interesting is the same principles that apply from day 1, actually applied differently in year 2, year 3, year 4, year 5, but it’s the same concept.
And if you look at marketing, you have to have one consistent marketing funnel to be a business. If you don’t have a consistent marketing funnel, you don’t have a business. And so, oftentimes, for those of you starting out in finance, that’s knocking on doors, that’s cold calls, that’s call your aunt, your uncle, your grandma, your warm network.
But let’s go into a concept that helps allow you to build, and that is tracking the appointments on the calendar per week. And let’s say starting out, you have zero, but then you make five phone calls. Next week, you have five. Now, what you do is you set a metric that there is a minimum requirement for new appointments per week. And what’s crazy, I have seen firms doing 100 million that didn’t figure this out. So, if you’re doing 100 million and you look out at your calendar the next week and you don’t have brand-new appointments on the calendar consistently, this is going to lead to inconsistent results, inconsistent revenue, and a lot of stress in your world. And so, that is the first thing I would start to look at as a firm is, well, what is our minimum required new appointments per week metric? And how do we start to track that and then hold the team accountable?
And that can be you, if you don’t have a marketing director or CMO or that can translate to a CMO and what they’re going to start to do back to one consistent marketing funnel. You might be that one consistent marketing funnel out of the gates, and that is now I need to go do a public event and out of that public event, if we get 50 people in the room, half of them book an appointment, 25. Of those 25, 70% to 80% show. Let’s say, of those 25, 20% actually show up for the first appointment. And then of those 20 that show up for the first appointment, let’s say that half of those convert in your sales process.
So, now, I’ve got 10 clients, 20 first appointments, 10 clients, obviously, all of those probably aren’t going to be in one week. So, let’s say that’s 10 appointments per week get you those metrics. So, now, you can start to create a marketing funnel. And what I will say not to fall prey to is primacy and recency, which is, oh, my seminar or my last marketing funnel is only as good as the last one. Marketing funnels take consistent testing over time so you can start to see trends and ratios.
And so, what you start to do is lock down that first consistent one, and then now, if you think of it like a slot machine. I have one consistent funnel here. Let’s say it’s a dinner seminar and I know if I put 10,000 in the front and the numbers play out, like on average they do, maybe I get 40,000 on the back end. So, that’s a 4 to 1 return. And now, think of that like a slot machine. And I know I can do one mailer a month, which means I can pull that handle one time a month. And every time I put 10,000 in, 40,000 comes out. So, now, that is one consistent marketing funnel that I know manufactures a certain amount of appointments per week.
Now, we can turn the volume up on that one. Let’s say we can actually do two of those based on our market. So, now, I just doubled the ratio. I put 20,000 in. Now, I’m going to get 80,000 out, but I’m going to be able to do two of those per month instead of one of those per month. So, there’s different levers you can turn on your business.
And now, let’s say we’ve hit a ratio where we can’t do more, there’s declining results with that funnel, now we might start a second funnel, which is in between those dinner seminars, we want to do a client experience. Let’s do a wine tasting event where we bring in a financial educator. And now, we open that up to bring a friend. So, now there’s a second marketing funnel. These two can actually complement each other. Hey, people at our dinner seminar, if you’re a client, you get to attend this. Hey, referrals at wine event, hey, we’re actually going to do a special event that you can see why your friends work with us, right? So, there’s really cool synergies you can start to create, but that’s a very simple way to start to look at marketing and really dial in the ratios so that you have predictable results.
So, number one, most important number in any financial advisor’s business, if I was to start over out of the gates, it is how many first appointments are on the calendar. I went a little deeper on a concept to think about when it comes to marketing funnels and creating consistent and predictable results. Part two of that one is what an hour of your time is worth once you start to generate revenue. I’ll cover that on a future episode.
All right. So, number three, as a reminder, number one was the number one missing role in finance. Number two, the number one most important number in any financial advisor business to get it off the ground. Number three, running your business like a business. Oh, sorry, one thing on the last one, number two, is there’s a couple little calendar hacks that are super helpful as you’re starting to run marketing and generate appointments. Episode 81 is an optimized calendar for finance that I got from Dan Sullivan and kind of tweaked for finance. And then Episode 89 is a 15-minute warning not to allow you to stay structured in your appointment process. So, those might actually help you with number two there if you want to go back and review those.
So, back to number three, run your business like a business. One of the biggest issues we see in finance is financial advisors that are great advisors, but bad business owners. And as you shift from financial advisor, single-player game, to business owner, multiplayer game, you actually have to change the structure that you build your business with and the thinking. And so, one of the things we talk about as you transition from the advisor in charge model to business owner and then eventually CEO and maybe board member down the road, you have to now create divisions in your business, marketing before, sales during, operations after.
So, marketing, here is what gets them in the door. Sales, once they come in the door, here’s what converts them to a client. Operations, here is how we fulfill the promises we make to our clients. And so, if you sketch that out, marketing sales ops, by the way, we went really deep on this, Episode 2 with Shawn Sparks, my co-founder, that might be one to revisit. But we actually went really deep in how to deconstruct the sales funnel and how to actually create three different types of advisors to free up founders to scale and then replicate themselves so that you have uncapped opportunity when it comes to revenue, and also, so your revenue doesn’t go on vacation when you do. I know that’s a common pain point for founders is when they’re the solo revenue producers, they can’t really unattach from their business.
In fact, I just had a conversation with one advisor that said, I felt like it was this tug of war where I would get to burnout phase in the business and I’d be like, I can’t take this anymore. And I would just escape and go on vacation for a month and forget about it. And then, unfortunately, when I came back, it was back to the grind because everything stopped when I was gone. And so, it was this just tug of war between business and life. And obviously, that’s not fun for anyone.
So, as we go into kind of a couple ideas on running your business like a business. Here is one that I wish we would have done when Triad was at five-team members instead of at 55 or 60, and now today 100, is an exercise called ladders and levels. And as you think about it, back to marketing sales ops, the first phase and this is when you’re small is you need a leader for each of those divisions. And so, if we look at marketing, oftentimes, that’s called a director of marketing. And most firms, if you look at sales, oftentimes, that’s the founder, that is the head sales guy or head of sales that might train the other advisors. And if you look at operations, oftentimes, it’s a director of operations. And then as you scale and earn the right to have C-suite that might be a COO that kind of oversees the ops, it might be a chief marketing officer that oversees marketing, still head of sales is typically or chief sales officer, I guess, if you get big enough.
But as you look at this, you start to develop ladders or levels inside of your organization. So, ladders, think of vertical, and you might have entry level one intern and then maybe you go five, six, seven, eight levels up, founder, CEO. And now, we start to develop what are the authority levels? We call it delegated authority at Triad, where an intern might not have much delegated authority, but maybe a team lead might have up to, maybe they have a company credit card at that level and they’ve got a $5,000 spend approval that you trust them enough to the level where they don’t have to come to you for everything.
And then as we look at levels across the organization, so we just did marketing sales ops, so now, one of the things that tends to happen in a lot of organizations, especially as you’re getting off the ground, is there’s what’s called title inflation because you’re like, hey, we just need you to help. What title do you want? Sounds good. Can you start tomorrow? And so, you might have a director in one division that really has a team of one. You might have a director in another division that has a team of five with completely different pay structures, with completely different responsibilities and leadership requirements.
And what that will create as you grow is inconsistency when it comes to pay structure, inconsistency when it comes to titles, and also confusion when it comes to team. Who do I go to for what? So, one of the things you can start to do on the level side is get consistency organizationally, where if you’ve got somebody leading your marketing division, they might be a director of marketing. If you’ve got somebody leading operations, they might be a director of ops, but you don’t want this all over the place.
And so, part of that is job descriptions, part of that is pay structures, really where you’ve got brackets almost, where it’s like, hey, at this level, we pay between this and this. But one of the things that’s true, I mean, we help a lot of our members with that because most financial advisors were never really taught to be business owners. So, a lot of the job descriptions and the pay ranges, this is foreign and it’s not really the skill set in the sweet spot. So, that is something, that is a problem we tend to fix on the regular, even helping our members create their first org chart, which if you think about getting a team to all run in the same direction, that’s going to be a really important part of that is who do I go to for what and what does the structure need to look like so we can get stuff done?
And that brings me to kind of my last, last point on this, which is running a business like a business. We call it no end arounds at Triad. And if you think about it, if I have leadership structures, oftentimes what happens with financial advisor/founders is if you’ve got a team, so you started with the team of five, that’s like a family. You can do one meeting all in the same conference room, everybody’s on the same page.
Now, let’s say you’re at 15. Well, now, that’s getting a little tight in the conference room, maybe. There’s multiple divisions represented there, potentially with multiple team members per division. And so, what tends to happen with those early ones that went to you for everything is that’s a habit that is hard to break until you really define here is the organizational structure. So, if you’re now at a team of 15 and all of them are in the habit of running directly to you, now that creates this constraint where you, the founder, are the problem. You’re slowing everything down. By the way, at Triad, we lived this. We went through this phase and there were definitely phases where things broke, people got frustrated, initiatives didn’t get moved forward because we did not have the proper structure to facilitate it.
So, no end arounds is clearly showing each team, here is your team lead, here’s who you go to for this. And if you aren’t getting things done, as opposed to running to the coach or the founder, you have to turn to that teammate and clearly communicate and say, “Hey, I really need this thing done. I’m waiting on this thing from you. Can you please help me out here?” And obviously, ideally, a very healthy way where everybody’s trying to get stuff done and nobody’s pointing fingers, you didn’t do this, you didn’t do that.
But I can say a very common theme we see in a lot of financial services firms is the end around where any time there’s any wall or delay or frustration, everything ends up on the founder’s plate. And a lot of that is really, because the team needs coaching, like, “Hey, there’s a new structure. It’s in place to serve you all, to empower you all. And so, therefore, I really need you to do it.” So, as a founder, here’s a fix. When one of your team members, assuming you have leadership structure in place, when one of your team members comes to you, hey, this isn’t getting done. This teammate didn’t do that. Have you talked to that teammate yet? Well, no. Well, maybe if that teammate didn’t get you what you need done, you should talk to them first.
And so, when we say no end around, it’s redirecting back to team leads, it’s redirecting back to teammates and teaching your team that it takes communication as a team. If you think about a football team, which I played through college, I was a free safety. We ran a defense that I had a strong safety and a weak safety. So, we were kind of the QBs for the defensive secondary. And if my two safeties were on the same page, I didn’t go under the coach. I went and turned to my teammate and I said, “Hey, that’s a cover 2. Did you get that? Did you not hear that? What’s going on?”
And I think sometimes, what happens in business, we too quickly turn to the coach when we should just turn to the teammate. So, when we say no end around at Triad, that’s how we’ve built a culture of being a great teammate overcommunicating and empowering each other to do the best work and not sabotaging and going around that it feels like every time something doesn’t happen, it’s kind of tattletale to one of the founders. So, I thought that would be helpful. That is a common theme we see a lot in finance as teams grow and structures of all.
So, with that, quick reminder, what would I do if I were to start over? I would do a lot of this much earlier as a financial advisor. The number one missing role in finance, I would hire an EA straight out of the gates. There are a number of firms out there where you can even do this fractionally and virtually. BELAY Solutions is one that we’ve used quite a bit at Triad.
Number two, I would make sure I hit the number one most important number, which is making sure I have people to see appointments on the calendar. We’ll talk about in a future episode the other most important number, which is what an hour of your time is worth and how to maximize that as a financial advisor. And then number three, truly running your business like a business creating structures. And by that, I don’t mean become corporate because nobody wants that. That’s the beauty of running a small business is no bureaucracy in politics, but it does take structure to have proper communication lines and empower as you grow. And so, that’s what we hit.
So, with that, hopefully, this is a structure that helps you build a business that allows you to do both business and life. And yeah, let me know your thoughts in the comments below and what you think, and which of these hit home. If there is one, two, or three that hit home or one of these you want me to expand on a bit, please leave comments if you’re watching this on YouTube. If you’re listening to it on audio, we’ve got a Triad member hotline that you can just text questions to as well. So, with that, I hope this served you. And I will catch you on the next one. Take care.
