August 16th 2023 – Money Marketing – View the article here.
For many people, starting their own business literally means going solo. According to House of Commons business statistics, 74% of UK businesses had no employees as at 1 January 2022.
The national dominance of smaller firms is also played out in the advice sector. The latest Financial Conduct Authority data for 2022 shows that, of 5,062 advice firms in operation, 2,381 have just one adviser.
But if an adviser owns a business and wants to grow it, sooner or later they will need to decide whether to bring other people on board and that is a big change for sole traders.
Suddenly, you have another person joining your dream and that’s both invigorating and nerve-wracking
For the first time, delegating tasks to someone else becomes a possibility – if not a necessity – and people management becomes an essential part of running the business. So, what can be learnt from former one-man bands who have been in this position or sole traders starting to recruit?
Mixed emotions
The first thing people who have grown from a one-man band talk about is how the transition made them feel.
“When I first hired someone for my firm, it felt like venturing on a blind date after enjoying solo life for so long,” says Alastair Hazell, a financial coach and founder of the financial education website The Calculator Site.
“Suddenly, you have another person joining your dream, reflecting your passion, and that’s both invigorating and a bit nerve-wracking.”
Firms that scale successfully do the groundwork from day one
Although bringing people into a business enables it to expand, it also means giving up some of the control you have got used to and trusting someone else with your vision. These things are liberating in many ways, but not always easy to do.
“Transitioning from doing everything yourself to having a partner or employee by your side can create a mix of emotions, from a sense of relief to a twinge of anxiety,” says Sam Dallow, founder of tax consultancy Counting King.
“Suddenly, you’re not the lone wolf anymore but part of a team working towards a common goal.”
Firms that scale successfully do the groundwork from the beginning. “Where we’ve seen firms do well here, they’ve started from day one with the process and culture of a larger firm,” says Kelly Biggar, head of practice at financial recruitment firm Fram Search.
Setting expectations, providing feedback and creating a positive work environment are essential aspects of managing a team
“That doesn’t mean hierarchy, but it does mean clear policies and procedures, introducing systems today which allow you to scale, and creating a professional environment for new colleagues to thrive in.”
People management
Natasha Percy-Baxter, proprietor of St James’s Place partner practice Percy Baxter Wealth Management, started her business nearly two years ago and currently works only with a virtual personal assistant. The next step for her is a virtual paraplanner, where a working relationship is built over email.
Percy-Baxter sees providing clarity to new joiners as essential for growing a one-person business. “People want to know what their role is and what the remit is,” she says.
She recommends business owners set goals for new recruits, make time for regular check-ins to ensure everyone is on the same page and give some thought to what the role can grow into.
Now, there’s another pair of hands to lighten the load, and while that’s a welcome break, it also comes with a steady need for trust
Learning how to manage people is a skill that develops over time as employers gain experience doing so with different kinds of people. It might help owners of a one-person business who do not have management experience to think about the different ways they have been managed in their careers, focusing on what worked and what did not.
For Hazell, managing people was a steep a learning curve. In the end, he found that open communication and building an environment where people are not afraid to be creative and learn from their mistakes helped him evolve as a manager and an individual. But how can advisers achieve this?
“I suggest investing in training, providing opportunities for growth and fostering a culture that motivates your employees to excel,” says Dallow. “Communication becomes key – setting expectations, providing feedback and creating a positive work environment are all essential aspects of managing a team.”
Delegation
Handing work over to someone else when you have been doing everything yourself should be like a weight being lifted.
Unfortunately, delegating may not be simple as passing the baton then saying ‘here you go, get on with it’.
Different opinions, perspectives or ways of doing things can be inspiring and good for the business
It can take time to feel comfortable delegating to someone else if you have been used to doing everything yourself. “Now, there’s another pair of hands to lighten the load, and while that’s a welcome break, it also comes with a steady need for trust,” says Hazell.
It took him a while to grasp that just because someone does things in their own way, it doesn’t mean they’re doing them wrong.
In fact, other people having different opinions, perspectives or ways of doing things can be inspiring and good for the business.
“Having someone else bounce ideas off can be a game-changer,” says Dallow. “I am an advocate of collaboration that brings fresh perspectives and insights, helping you refine your business strategies.”
No one person has all the answers and having a trusted partner can be incredibly valuable
When you have input from someone else, you can brainstorm innovative ideas and have someone to challenge your views, so any decisions you make together are more informed.
“No one person has all the answers and having a trusted partner can be incredibly valuable in navigating the complexities of running a financial advice firm,” says Dallow.
Hazell agrees. “Having another brain to toss around ideas with is priceless,” he says. “I still recall the first time my colleague and I burnt the midnight oil, deep in conversation about how we could draw more visitors to our website. It’s the kind of in-depth discussion you can’t have with yourself. It brings in a fresh wave of creativity and excitement that’s tough to spark when you’re on your own.”
But there is an advantage to having worked completely on your own before bringing other people into the fold.
There’s the possibility of not seeing eye to eye, varying work ethics and additional financial commitment
“As and when I take someone on, I know what their job is,” says Percy-Baxter. “It becomes easier to delegate when I’ve been doing it myself. When I take on a paraplanner, I will pay attention to that first case, asking how they did that, how they reached that conclusion.”
This approach will enable areas that are not being performed the way the manager wants to be nipped in the bud at the outset, providing the new recruit with some guidance and clarity.
There is no denying that growing a one-person firm has its challenges. “There’s the possibility of not seeing eye to eye, varying work ethics and additional financial commitment,” says Hazell. But it seems the perks outweigh those struggles.