We see a common trend in mature practices, and seven years of a relatively up market has strengthened it, especially in the B2B space.
Mature practices are the kind run by someone who has been in the business for a few decades, has a client list of a few hundred businesses, and probably manages a couple hundred million dollars plus. These businesses have a tendency to look inward for their growth. To be clear, the business still grows, but the growth is not a result of the same kind of hustle and opportunity creation that got the practice where it is.
The business grows in part because of market growth. Managed funds valued at $130 million can grow to $200 million after seven years of an up market. The advisor picks up a few new services or products to upsell current clients on, so there's some growth. And then there's the referral-generating activities — a seminar here, a golf outing there, a direct request for referrals every now and then. So the business chugs along at a completely respectable rate.
But a huge swath of potential is left untapped.
Related: The challenge of business growth
That's because the majority of the growth I just described is a result of looking inward. It comes from working with clients that you already have rather than from exploring new opportunities.
This trend is visible throughout the industry. If you attend a conference, you'll see upward of 50 vendors, and only one or two of them will be devoted to marketing. The rest are built around new products or services or ways to improve the internal structures of your business. Inward. Inward. Inward.
The truth is that finding new prospects, connecting with them, and walking into a cold first meeting is hard. Compared to organizing a golf outing with your top five happiest clients and their best friends, it's incredibly uncomfortable. The prospect in front of you in these situations wasn't referred by one of your happy clients, so you're back to the hard realities of needing a solid sales process to convince this total stranger that you're the advisor they should trust.
At these same events, you will often see these top advisors crowding into a room to hear an advisor speak. The person on stage, however, has a practice that is sometimes 5 times as large as the biggest business in the audience, and it's because that individual did the difficult thing: He pursued growth outside of the business. He did the right preparation so that he could capitalize on what others might see as a lucky break.
If you are happy with your business and your rate of growth, that's fine!
If you want to be the rainmaker, you need to build a pipeline that goes beyond referrals and upsells to existing clients. (Photo: iStock)
