Editor's Note: Michaela Herlihy, CFP, embarked on her financial planning career in 2005. Starting as an assistant, she began learning the business from the ground up. After nearly six years with a firm outside of Boston, Michaela re-joined the family business in 2012 and relocated to Cape Cod to manage that office. She has no formal business management training and credits her mentors, a few tried-and-true business management books and podcasts (i.e., SKIMM’d from The Couch), and many hours of strategic business planning with helping her prepare for business ownership. Below she shares a glimpse into a forum, Roadmap to an Internal Succession Plan, planned for FA's 2020 Invest in Women conference, scheduled April 27-29 in Atlanta.

I’m always excited when I hear someone in the industry say they want to own their own practice someday. There is great pride in running a firm that puts clients’ needs first and strives for excellence while developing wonderful career paths for yourself and your team. 

As in any industry, the transition from employee to owner should not be taken lightly. In order to make that dream a reality you must prioritize your goals and be willing to work—a lot. You may be an awesome CFP, but have you ever run a business? Have you ever had to manage employees or make payroll? 

It’s important to respect the current owner(s) and demonstrate your commitment and dedication to your current responsibilities while expressing an interest in succession planning for the firm. Take the time to learn the current owners’ goals and priorities. What does their timeline look like? When I took a leap of faith and moved from Boston to Cape Cod to manage that office, I made sure my contract included a provision for a future buy-in option. Originally, that timeframe was eight years, however after three years of managing the office I made an offer to buy that practice. This is where it got real.

Business ownership comes with massive responsibility and I could speak for hours on this topic. For now, let’s dive into three categories:

1. Identify and Implement policies and procedures

2. Create a business plan and find a team of professionals

3. Know your numbers

Policies and procedures are important for any business and by this I don’t mean simply having a written manual, a firm must have policies and procedures in place that are being used regularly. It must be part of your culture. For example, if you handoff the onboarding of a new client, can you ensure the transition will go smoothly? Do you worry about things falling through the cracks? If so, buildout a workflow with action steps for each piece of the onboarding. 

Every task, from entering client data into the CRM to implementation of the portfolio and confirming the transfer with the client, should be accounted for. Think of the accountability this creates within your team as well. Policies and procedures are not only for client interaction. What type of rules will you build around: Ensuring clients are seen in a timely manner? Nurturing COIs? Conducting investment research? Mentoring your team? Profit margins? During this time, you will get a feel for wearing many hats, a true rite of passage for any business owner.

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