Research and timing are crucial when starting a new company. No doubt, anyone with a crystal ball would not have planned to open a new restaurant or bar in 2020. But no amount of research could have pinpointed exactly when a pandemic would strike nor the extent of its fallout.
Art Haws, CPWA®, CFP® and Cam Goodwin, CFP®, CPFA know a little something about launching an unlikely business during unprecedented times.
“As any good financial professionals would do, we planned for good and bad-case scenarios of just about everything that could impact the success of our new business – especially market variations,” explained Haws. “We modeled an average market performance, a good market performance and what we considered at the time to be a bad market performance. What we did not anticipate, was a 48 percent market drop. However, that is exactly what happened.”
The two Merrill Lynch alums founded HawsGoodwin Wealth, an independent wealth management firm, in 2008 – just one month before the subprime mortgage crisis hit. The fallout resulted in bankruptcy and corruption charges for several large Wall Street firms, the country was thrown into the worst economic woes since the Great Depression, and the trust in financial institutions, of any kind, hit bottom. Not exactly the ideal time to start their new business.
Thoroughly battle-tested, Haws and Goodwin persevered and today run a nationally ranked* registered investment advisory firm. Despite new challenges caused by the pandemic, HawsGoodwin is experiencing continued success. “Our assets under management have grown in excess of 20 percent since last year, and we’re on pace to sustain that growth,” said Goodwin.
“Looking in the rear-view mirror, the idea of starting a new financial company in 2008 might appear disastrous,” said Haws. “But it turned out well for us, and we learned a few lessons along the way.” Here are five tips for anyone launching a new company.
1. Be ready to adjust and adapt.
You got to be ready to pivot when the unexpected happens. And it will happen. We spent over a year, meticulously planning every detail of our business before launch, then practically threw it all out the window when the financial crisis hit. It won’t always be something as devasting as near collapse of the global financial system. But there are countless unexpected situations that can make or break a business. So, you need enough flexibility to address the circumstances of your situation, no what gets thrown your way.
2. Skate to where the puck is going, not where it is.
Base your benchmarking, planning and decision-making on where you want your company to be in three years. Don’t compare yourself to other firms that are like you right now. Seek out and study the firms that already on the next rung. Those are the companies to benchmark yourself against in terms of profitability, growth, staff size, service options, etc. Then start conducting your business as if that is where you are, today.
3. Hire for learning and growth.
When building your team, once again consider how you want the business to grow. Then, rather than hiring someone to fill a position, hire the person who has the capability to grow within and beyond their job.
Every company is going to experience change at some point. Perhaps it will be to keep up with technology or customer expectations or new service lines. Staff willing and able to continually learn will help you successfully manage the company’s evolution. There are some people who may be very good at what they are initially hired to do but do not have the capacity, for one reason or another, to reach a level where you ultimately want them to be. Therefore, looking ahead at your business growth plan before hiring will help you better identify a right-fit for a long-term team.
4. Don’t clone yourself.
I remember when I was in business school, I had a professor who once said, “if you form a partnership with someone who is exactly like you in personality and skillset, at any given time one of you is useless.”
Common goals and principles are great qualities to share, but having different strengths helps you reduce gaps in necessary knowledge and capabilities. I’ve found that a good, solid decision is one where Cam and I arrive at the same point from very different perspectives. This isn’t uncommon because we each have distinct abilities that build on what we need.
For example, Cam and I are both very good at visualizing the big picture. However, when we outline specific steps to accomplish a new goal, he is the real task-master. He is much better than I am at checking off steps to get a job done in an effective, orderly manner. Last year, we promoted to partner someone who brings her own qualities to the table and is helping making real inroads in terms of the direction we want to take our company.
5. Treat everyone fairly, but not necessarily the same.
As a leader, you have to determine what each person needs in order to do their best. What is their motivator? The easiest answer is financial motivation. But for many people it’s something entirely different like flexibility, responsibility or status. Once you figure out what matters to people you can structure that into their job so that they are successful and enjoy what they do.
This strategy works with clients, as well as staff. Once you know what button lights up a person, you know how to lead and coach them towards what they consider a successful outcome.
*HawsGoodwin Wealth was ranked among the Financial Times 300 Top Registered Investment Advisers (RIA) list in 2019 and 2020. The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by the Financial Times (July 2020). The FT 300 is based on data gathered from RIA firms, regulatory disclosures, and the FT’s research. The listing reflected each practice’s performance in six primary areas: assets under management, asset growth, compliance record, years in existence, credentials and online accessibility. This award does not evaluate the quality of services provided to clients and is not indicative of the practice’s future performance. Neither the RIA firms nor their employees pay a fee to The Financial Times in exchange for inclusion in the FT 300.
The opinions expressed herein are those of HawsGoodwin Wealth, LLC (HawsGoodwin) and are subject to change without notice. HawsGoodwin Wealth, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about HawsGoodwin, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request.
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