Double Revenue? How a KC Business Owner Tested Processes, People to Get ThereDavid Cawthon
When Tracy St. John raised her rates for the first time in eight years, one of her longtime clients balked at the increase and planned to look for a financial adviser elsewhere.
This was not only one of her first clients, but someone who referred several family members to her business. Tracy responded by showing her client how much his net worth had grown since they worked together. He was unconvinced.
Tracy then estimated what her services would cost if he had used a nationally known, corporate financial services firm. She delivered her services at less than her most conservative estimate. The client decided to stay.
Since starting Financial Avenues LLC in 2010, Tracy has been committed to creating a value-driven, client responsive financial services firm. To do that, she wanted Financial Avenues to be more than a lifestyle business. She wanted transparency with clients, providing high levels of efficiency in developing financial plans, without selling financial products.
Typically, financial planners work as a lifestyle business, in which they are solopreneurs or have a small staff to sustain a specific level of income. Tracy sees numerous lifestyle financial planners who no longer take new clients, or they take several months to develop a financial plan because they are overworked. Having a team would mean that the business wouldn’t rely on Tracy to keep projects moving. Building her team meant Tracy would have to spend time working ON her business and not just in it.
“I believe clients should not have to wait four months to start working with a financial planner or to receive recommendations,” Tracy says. “I have a hard time saying no when the demand is there, so I need a team.”
Tracy also wants to remain a fiduciary, meaning she advises in her client’s interests and does not make commissions through product sales. She wants to have full transparency with her clients, which means Financial Avenues bills on an hourly rate. Most prospective clients are unfamiliar with the fiduciary concept, but she thinks they should be. Earlier in her career, Tracy worked for businesses in which some of the financial advisers didn’t understand the products they were selling, and they benefited from their commissions more than their clients benefited from the products.
She has helped clients understand their finances since her first financial services job in a mutual fund call center. She was able to make challenging financial information accessible when she led 401(k) enrollment sessions. Those people asked her to explain other aspects of financial services and to help them plan for their future. That led Tracy to Kansas State University for a master’s degree in family financial planning.
Efficiency is Key to an Hourly Business Model
When Tracy started Growth360, a no-cost program that helps business owners get the tools, perspective, connections and coaching to grow, her 9-year-old business had one contract financial planner and an assistant. Tracy’s coach through the program encouraged her to consider what it would take to double her revenue. To reach her goal, Tracy had to put processes and procedures in place to bill as much of the time spent on client projects as possible while growing her staff and her capacity to serve clients.
Solid processes are the key to repeatable business but developing them is easier said than done. Eighteen months after she started thinking about her business differently, Tracy continues to revise processes to ensure she has accurate financial data when she begins an analysis for a client. For example, a financial report still contains a lien on a client’s record that should have been removed, and Tracy wants her team to follow the trail to make sure the documents are accurate. She has spent several late nights finding and fixing errors in reports and fights the urge to revise the project herself.
“Training people in how I do financial planning is not a quick process,” she says. “When items are overlooked, they point directly to me and whether the process was clear and made sense. Those errors tell me my process was not efficient.”
In Growth360, Tracy learned retained earnings were a way to track business growth and realized she needed a new accounting system. Tracy’s new accountant helped her set up a new accounting file, which gives annual growth numbers and helps her track the hours of her growing staff.
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Finding People to Fit the Business
As Tracy developed processes, it became clear that she needed to replace her assistant with someone with a different skill set. In addition, she would need to add another financial planner and someone to gather and refine financial data to manage workflow with a larger client base. Tracy admits that she has struggled in the past to find and hire the right people, so she worked with a hiring professional and refined her job descriptions and the necessary candidate qualifications to grow her business with the right people.
In 2020, Tracy planned to celebrate Financial Avenues’ 10th anniversary, but the pandemic tamped down some of the celebratory mood. Nonetheless, Tracy has continued to develop processes necessary for growth and onboard her new staff. Her new assistant and other staff are finding their rhythm in the processes, and Tracy is now tackling more complex financial planning processes with her new associate. Tracy’s commitment to an increased level of efficiency grew her revenue by about a third in an otherwise turbulent year.
Her team is getting its footing, which allowed her to take a vacation. Now, she plans to make having the confidence to step away from her business part of her lifestyle.