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From Survive to Thrive: What is Your Business Mindset?

Mind over matter—how your business mindset can position your business for growth.

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You have probably heard a lot of talk lately about business acquisitions. As significant numbers of financial advisors are aging and retiring—Cerulli Associates reports half of all advisors plan to retire in the next 14 years—this topic is rapidly becoming more and more pertinent. Moreover, purchasing a book or another practice in its entirety can create a more valuable business that will ultimately provide you with greater income when your succession plan comes to fruition, whether that is 5, 10, or even 20 years down the line.
However, before you can think about purchasing a practice or selling your own, you should first examine your business from top to bottom to ensure it is in an optimal state and can withstand growth. Even if you are not thinking about buying or selling a practice, this step is vital to ensuring your business is functioning at its best and providing you with the most possible revenue.
If your business is systematized—meaning everything has a process and is done the same way every time—it will make it much easier for you to purchase a practice or additional book and fit it into your existing business. In addition, systemization can make your business more valuable to a potential buyer when it’s time to sell—whether you are passing it to a current employee, family member or outside advisor—because a buyer could easily pick up your processes and continue your business. On the other hand, if you do not have repeatable processes in place, and the continuation of your business relies almost completely on your presence, it becomes much less valuable to a potential successor or buyer, as it would be much harder for someone to step in, and even harder for them to retain clients.

Business Mindset: Self-Employed vs. Business-Owner

The first step in examining your business to ensure it can handle growth is to ask yourself what your business mindset is: self-employed or business-owner.

The Self-Employed Business Mindset

Generally, those with self-employed mindsets focus primarily on generating income to operate the business and feed their families; therefore, any expenses are seen as a hit to personal income and are to be avoided at all costs. Daily activities are often driven by the search for new sources of income rather than by the creation of an exceptional client experience or consistent set of activities. The result of this is that the advisor is moving at an almost frenetic pace and becomes tied to the income-generation activities of the day and does not focus on running their business as a business.
Often this means that the advisor is the key to the business, causing challenges if they were to be out of the office unexpectedly. All the knowledge of important tasks lies with the advisor, and decisions are often based solely on the advisor’s impulses and desires, mostly because of their objective to continually drive revenue to the business. Many times the advisor relies on his or her charisma, talents or ability to improvise in the moment when in client meetings or proposals, instead of on repeatable processes. Essentially, the advisor tries to do everything on their own because they do not have processes that transfer easily to other individuals. The business drives the processes instead of the other way around. Usually this means if the advisor is not there, the business does not run. Lastly, this type of advisor focuses on obtaining more income for the here and now, rather than on building equity for the future.

Challenges of the Self-Employed Business Mindset

The problem with this scenario, beyond the exhaustion or burnout often experienced by an advisor in this situation, is threefold:

  1. It is difficult to grow the business because adding more clients means additional work for the sole advisor;
  2. Purchasing a new practice would likely be next to impossible because of the amount of time that would have to be taken away from the existing book; and
  3. When it comes time to sell the business, no one will want to buy it because the advisor’s knowledge and skills are essential for its success.


The Business-Owner Mindset

Those who look at their businesses objectively as an owner, rather than as someone working for their dinner, realize that it cannot depend completely on them—other people are necessary and can be extremely valuable if they are part of a process created by the owner. Owners believe that systems drive behavior, instead of the other way around, which delivers consistency and improves efficiency, allowing others to perform key tasks proactively. They see themselves as being a part of the business—an integral part, of course—rather than identify themselves as the business itself. Instead of focusing on obtaining income, they focus on building equity that will better serve to support them later in life.
Business owners create repeatable processes for every aspect of the business: marketing, creating proposals for prospects, client presentations, bringing in new clients, ongoing client communication, client meetings—each step is done the same way every time, and thus could be picked up by someone with the necessary skills who is properly trained by the owner. In addition, owners train their staff to support the business, rather than just the owner, helping staff feel the business is stable. This makes for a staff that is more dedicated, more loyal and more willing to go beyond the call of duty to grow the business alongside the advisor.
Owners see beyond the walls of the business to the industry, the marketplace and the evolving world; they think strategically, recognize trends and know how to leverage the unique abilities and systems of the practice within the current climate.

Benefits of the Business-Owner Mindset

The result of this mindset is that the business is truly a business and has the ability to grow and expand—it is scalable. If you bring in new clients or even purchase a whole new book, you can easily incorporate them into your existing system with success, and be able to focus on the activities demanded by new clients without neglecting existing clients. In addition, every minute of every day is no longer dependent completely on you. You can leave and confidently know that your business is still running and individuals are fulfilling their roles. Likely, you will have a business that is constantly growing in both revenue and equity, creating a legacy that can support you and your heirs later in life.

Which Are You?

The question is—do you have a self-employed or business-owner mindset? To determine your business mindset, ask yourself the following questions:

  • What would happen if I had to leave the office unexpectedly for a month?

    If your business would fall apart without you, you might be leaning toward a self-employed mindset.

  • Do I have systems and processes that I repeat with each new prospect and client?

    Repeatable processes are often the result of a business-owner mindset and create efficiency and scalability, making it easier to grow.

  • Could I write out exactly what I do and train someone else to do what I do?

    If this would be difficult for you, you may be improvising too much. If you have already created a manual for what you do and trained employees to follow it, you likely have a business-owner mindset.

  • If I had 100 new clients join my business today, would I be able to handle it?

    If your answer is “no problem,” your business is likely process-driven, making you a true business owner.

The answers will likely show your business mindset is somewhere in the middle of the two, so the goal becomes moving closer to the business-owner mindset to create a successful, repeatable business model that is amenable to growth.

A Comparison of Business Mindsets and Behaviors
Self-Employed Business-Owner
Focused on generating income Focused on creating equity
Behavior drives systems Systems drive behavior
Processes constantly change Processes are repeatable
Advisor handles all important tasks Advisor trains staff members to handle some important tasks
Client meetings are often improvised Client meetings are systematized and repeatable
As a Result
Self-Employed Challenges Business-Owner Benefits
Difficult for advisor to leave office Advisor can leave and trust that tasks will be handled
Clients’ expectations are unclear Clients experience consistency
Staff works for the advisor Staff works for the business and its growth
Advisor becomes burned out Advisor creates a legacy
Day-to-day perspective is maintained Long-term perspective is maintained
Difficult to grow business because of pressing workload Business is scalable
Business is more difficult to sell because it relies on owners’ skill and presence Business is easier to sell because equity has been built and processes are repeatable


About Cetera® Advisor Networks

Cetera Advisor Networks LLC is an independent broker-dealer and registered investment adviser firm that utilizes a unique regional director model to support financial advisors through the entire life cycle of their business. As part of Cetera Financial Group®, a leading network of independent retail broker-dealers, Cetera Advisor Networks is able to build and support regional teams through local service, regional offices and a national home office, facilitating the success of financial professionals.

Cetera Advisor Networks is a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA). For more information, see ceteraadvisornetworks.com.

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