10 MIN READ
While the economic fallout of the coronavirus crisis remains unclear, one thing is certain: there's nothing quite like a global pandemic to convince even the most confident entrepreneur that now is not the right time to start a business.
Some economists have posited that the economic shock caused by a national shutdown of the American economy will trigger a recession (and some even argue a depression). While recessions elicit widespread panic and economic suffering for many, not all industries feel the same pain during economic downturns. When the future of the economy is in doubt and people's financial futures lack clarity, the demand for financial advice increases.
Even as financial markets begin to show signs of recovery as states reopen their economies, the simple fact remains that the financial lives of many people have been entirely upended and cannot be recovered overnight. More than 40 million Americans have filed for first-time unemployment, and nearly 1 in 4 American workers are currently unemployed. Americans need many things right now—chief among them is good financial advice.
If you were prepared to launch a financial planning firm and decided to pump the brakes considering the current environment, you may want to reconsider your decision. The fear of failure will exist whether we're in a recession or the economy is booming. It's easy to convince yourself it's not the right time to take a chance on your dream. The advisors who succeed are those who feel that fear, but choose to ignore it because they know the time is now.
As you contemplate firm ownership amid a global pandemic, widespread unrest, and ever-present uncertainty, consider the advice below from my fellow team members.
Advice from XYPN Financial Planning & Process Coach Emily Purdon
There are two factors to consider: personal and professional. Given the global crisis, are you personally able to start a business? The personal factor can be broken out further into financial commitments and time. Consider whether or not you have enough accumulated savings or a significant other with steady wages that can hold you over in times of uncertainty. (Although, I could argue this is important for any entrepreneur, recession notwithstanding.)
The second component is time. Do you have the time (20–40 hours/week) to dedicate to registering and launching your business? What are your family commitments? Are you still working part or full-time at another firm? Do you have a side hustle?
Let’s take a look at the professional implications of launching a firm during uncertain times. People need sound advice and guidance more now than ever. Consider structuring your service offerings to engage prospects in the current environment. A combination of hourly and project packages geared toward financial fitness and organization may be appropriate. As the economy recovers, you can start to pursue your ongoing revenue stream in terms of a monthly subscription and/or AUM relationship.
If you are able to commit to these personal and professional considerations, you are one step closer to convincing yourself that this is the right time to start your business.
Advice from XYPN Executive Business Coach Arlene Moss
What’s the best time to start a planning firm? Now. There’s never a great reason to wait. It can be daunting to hear so much news about the economy, an impending recession, and have so many unknowns. Those fears you have are real, but here’s the thing—they won’t go away if you wait.
No one has ever launched a firm entirely free from fear. (At least no sane person.) You need to embrace it and power through it. If you have the drive and desire, those are not going to go away. You are not suddenly going to love working for other people just because we are in a recession. All the reasons you have today to launch. All the needs and goals that brought you here. They are not going away just because the economy is a little bumpy.
The great thing about financial planning is that the needs are there regardless of the economy. You may shift engagement style or messaging, but everyone still has to plan for their future. People still have hopes and dreams that you can help them achieve.
I know colleagues who launched their firms in 2000 and 2001, dealing with tech bubbles and then 9/11. I work with firms that opened in 2008 and 2009 and they are going strong. The needs of your clients are here. The opportunities are here. The fears are here. But most importantly, your dreams are here.
Advice from XYPN Marketing Coach Carolyn Dalle-Molle
Your niche needs your expertise, and they need it now. But how can you connect with prospective clients when time is of the essence? The answer is simpler than you might think: market your firm where your niche is already looking.
Many marketing efforts you hear about are focused on building your own audience. This work is valuable, too, but often a long-term play. In contrast, speaking to an existing audience is effective now. So, think broadly about how you can connect with existing audiences of your ideal avatar.
One idea to get you started is to connect with third-party content creators. There are countless “content creators” in today’s digital world. Podcasters, bloggers, YouTubers, and Instagrammers are all examples of content creators. These people create content (in various formats) and share it with their audience on a regular basis.
The relevant detail is that content creators often feature or collaborate with experts. Now is the time these creators may be looking to feature a financial planning expert. So, which creators does your client avatar follow? Where might you be able to offer an interesting story and lesson for their audience?
A big tip here is to get to know the creator’s content, and craft a unique pitch for each one based on their typical format, style, focus, and voice. Offer a story, interview, free training, or similar value you know their audience would love. XYPN members can find more ideas for marketing mediums that are effective in the short term here.
Advice from Member Experience Specialist Sara Williams
I want to reiterate the ending sentiments from a recent episode of #XYPNRadio featuring advisor Kenneth Klabunde: for those who are considering starting their own RIA during this time, do it. People need help and guidance now more than ever, which means we need more advisors to step up and offer their help.
The thing is, while launching a firm may feel like a major risk, it always will, recession notwithstanding. But you don't have to do it alone. There is an entire community of advisors who want you to succeed and who will be there to answer any questions you have or to simply listen.
Advice from Lead Member Experience Specialist Isabel Leong
An XYPN member recently shared a story that bears repeating. He said that advisors can expect to see a wave of prospects reaching out. He was around in 2008 and in the months following the market crash, he had prospects calling him and telling him that they were disappointed when their BD/wirehouse guy didn’t reach out—not even a phone call or email. So he believes in a few months' time, this will happen again.
All that to say, my advice would be to get clear on your offering and know that you’re offering something different. Don't be the advisor who doesn't care about your clients. If you believe in yourself and your advice, know that you have something important to offer the world.
On top of that, take care of yourself just as much as you are taking care of your clients. Launching your own firm is incredibly difficult and rewarding work, especially during a global pandemic. If you aren’t being your best self for yourself, you can’t be your best self for your clients.
Lastly, I will leave you with an anecdote (or perhaps novella is a more appropriate term here) from XYPN Sales Coach BB Webb. Enjoy!
To Be or Not to Be an Entrepreneur!
Do Not Pass ‘Go’…You May Not Collect $200
I’m on my third career. I’m in love with learning, adore a challenge and prefer working and making a difference in people’s lives more than time off. Nutty isn’t it? Nutty but true.
I began my career in the performing arts. My first theatre teacher, influential and wise, tried to talk me out of moving into what she shared was a cutthroat industry, one where failure loomed for most, bare subsistence for others and success to a select few. Aside from the scant chances for success, odd jobs necessary to make a go of it, there was also the reality of living with constant and often harsh rejection.
Despite all that sound reasoning, I became an actor/artist anyway. I couldn’t NOT! Over the years I diversified my offerings and talent and resolved to work by taking on commercial and industrial film work, had success as a voiceover talent and dabbled in low paying summer stock work to perfect my craft. I later peddled a children’s show I wrote, (thrilling kids by juggling fire and walking on my hands) and finally wrote a one-person play which I toured around the country while teaching acting, storytelling and writing workshops at schools, senior centers and in prisons…all with a measure of delight and at a most severe cost.
I toured alone, had no community support, was always in a new town and did the sales, marketing, performing tech and operational part of my business. My true love was the performing, writing and workshopping which got the least amount of my attention. Most annoying, I had no regular doctor, friends nearby to lean on and couldn’t find a good place to get my hair cut.
At year three of touring, I landed in Louisiana, where I did a guest artist stint in a friend’s play and then promptly fall asleep for three solid days. My friend thought I died. In a manner I did. I was beyond exhausted and couldn’t keep up the pace without greater financial or emotional support.
Success came at a heavy price.
Hold on, this story does improve!
Flip to several years forward. I was granted an opportunity to borrow $1.5 million with my vision to remodel an antebellum style mansion outside of Atlanta. I went forward to build a necessary ballroom, create gorgeous grounds and created a wedding venue which would, in time, feature 130 unique weddings a year complete with catering, floral design, wedding direction and "soup to nuts" services to create customized and unique special events.
When I went into the business I knew, unlike in my performer world, I needed support to accomplish my vision. By borrowing the $1.5 million, I hired in the areas where I was either less savvy or not passionate though roles I knew we needed to create a successful and profitable business. I hired coaches to train me in weak areas and a strong team of operations people, a CFO and bookkeeper, a marketing director, chef, service team, floral designer and wedding coordinator. With a passion and bent toward sales and marketing, I worked on marketing strategy and managed and developed sales systems the first year before hiring sales and marketing folks so I could guide the vision, manage the team and be the face of the company to the public.
All this to say, being an entrepreneur is not for everyone. Good or bad, not everyone carries a serious risk and vision gene.
Over my 14 years of business, I made many errors and learned through doing. While building what felt like a small empire to me, I didn’t pay myself for nearly three years and even then, just a modest sum. I encountered employee issues, department of labor snags, challenges with customers, a learning curve on adopting the right internal systems and technology, nearly lost the business in the 2007/2008 collapse, and was sued once. One year I crawled up the outside stairs to my house entirely convinced I was having a heart attack due to the stress.
All that to say...I not only got through and learned from the challenges, but found out how good I could be!
I soon became known in the industry on the speaker circuit as the "go-to" entrepreneur in the industry and wrote a book about my experience, which ushered me into my third life career as a business coach working with other small business owners.
If you are curious, tenacious, don’t mind making errors to learn, love to work and most of all, live to serve your audience, I say go for it. No one will stop you anyway.
If, however, you prefer a roadmap, a measure of security, and weekends off, you might consider otherwise. The great news is, you have amazing support through XYPN to help you avoid the errors that entrepreneurs without a roadmap make. Aside from a boatload of terrific resources for starting your business, marketing, financial planning and processes and sales, you get to work on-one-one with coaches through your membership!
When I found the opportunity to apply to work as a sales coach at XYPN I never dreamed I’d work with a company; I was an entrepreneur at heart. Getting to do what I love day after day, empowered by strong company leadership, a solid vision and a stellar culture was motivation enough for me to jump in.
What’s the motivation for YOU to dive into own, develop and run your own firm?
10 thoughts to consider as you contemplate whether or not you are "entrepreneur-worthy":
- Are you comfortable with a high level of risk?
- Do you like the idea of creating something from nothing?
- Do you know where your passions and strengths lie as an advisor?
- Do you have an idea of how you might shore up the areas of your business where you are less passionate or knowledgeable with able help?
- How long can you live with making a lower rate of pay than you are accustomed?
- Do you have a family/friend/colleague network of people to keep you buoyed during times of doubt and who will tell you the truth as they see it?
- Would you be happier running your own firm despite the hard work and potential challenges, outside of working for another firm?
- Does the passion for running your own firm keep you up at night with new and exciting possibilities?
- Is your spouse, or those dependent on you in support of your desire to go entrepreneurial and do they understand the commitment necessary?
- Would not moving forward create deep pain for you?
If you answer yes to all these questions, I say go for it. First step, make a plan, run it by folks who have "been there, done that" and roll up your sleeves for some real learning and fun—trust me, you’ll be so glad you did.
About the Author
As XYPN’s Senior Communications Manager/Editor-in-Chief, Kelly is tasked with communicating the Network's value proposition to the world. For years, Kelly has helped organizations tell their stories in ways that inspire others to listen, and to care. Her penchant for a well-crafted sentence, good grammar, and clever wordplay has earned her the moniker “Word Whiz” around the XYPN office. She’s thrilled to share XYPN’s story with you and the rest of the world.