Ask a Financial Professional: Successful Entrepreneurs
According to research, 58 percent of millennials say that working in a rewarding career is a major life focus. In pursuit of this sense of purpose, many young people start their own businesses with 32 percent qualifying as “outer-directed entrepreneurs.”
Members of this group are typically married with children and have the highest incomes and levels of business ownership. They also have the highest mean household savings rate (17 percent) among their age group. In addition, 70 percent have a financial plan. Yet, at the same time, this generation of entrepreneurs is more stressed about managing expenses and paying off debt than older business owners.
To some degree, it’s not surprising that younger entrepreneurs feel higher levels of stress about their business. After all, experience is the best teacher, right? Emerging entrepreneurs don’t have years of trial and error to inform their decision making.
Smart leaders close this gap by bringing in financial professionals who have the experience that they lack. Often, as in the case of Travis Scribner, a managing partner at WestPac Wealth Partners, the financial professionals not only work with other business owners, but they are entrepreneurs in their own right. We recently asked Travis about his entrepreneurial life and how it serves him as he works with fellow trailblazers.
In your experience, what’s the most rewarding part of being an entrepreneur?
For me, it’s the ability to really build something. So many people gripe about their work. It’s like that quote, “Most men lead lives of quiet desperation.” That’s not the case for an entrepreneur. You’re given the opportunity to build something, and it’s up to you to do it.
I’m really proud of what we’re building at my firm. In 2014, we had four people. Now our Las Vegas office employs around 34 people, and our Orange County, CA office has another 12. The people here come up to me and say, “I’ve never worked at a place like this,” and I take the utmost pride in the fact that they like coming into work everyday.
What’s the biggest challenge?
The biggest challenge is that there are endless challenges. It can feel like there’s always more to do. Running your own business also comes with the burden of leadership. No one is telling you what to do next. That decision is yours.
What the biggest mistake you’ve made in your business and what did you learn from it?
I think it’s good to realize that you’re going to make mistakes all the time. The important thing is to not make the same mistake twice. For example, I think back to times when I allocated capital where I should not have. But we learn from our mistakes and get better at what we do.
What are some common pitfalls you see with younger entrepreneurs?
The most successful clients I advise think in the long-term. They’re not only looking at day-to-day numbers, but they’re thinking in terms of multiple years and decades. Unless you’re nearing the end of your company, few entrepreneurs take the time to ask themselves, “How am I going to exit this business?” You start a business, you put your head down growing it and the days get very busy. Then suddenly one day you look up, and there’s no roadmap for the long-term. There are no systems in place to address the longevity of the business.
How do you recommend that entrepreneurs find the time to think about the long-term vs. short term needs of their business?
As an entrepreneur, you probably started your business because you’re really good at something. As your business grows, it’s important to keep doing that thing. For the other aspects of the business, you want to bring in a strong team. Hire people who are experts at what they do, like operations managers, lawyers and financial advisors, to guide the other aspects of your business. Here’s the key thing: use this team of experts as strategists.
When I start working with an entrepreneur, I ask them if they have a good team in place. Often they do. But they’re not ready for my next question: “When was the last time you brought everyone together in the same room?” I mean physically in the same room. Almost always I get a blank stare and the person says, “We’ve never all gotten together at the same time.”
Are there specific financial products that entrepreneurs should use?
Your plan should be specific to your business. In most cases, business owners have heard of the common products like group health and dental insurance.
But the lesser-known products can also be important. Take key person insurance as an example. What happens if a partner in your business dies unexpectedly? How would you pay out his or her portion of ownership?
Or do your operating guidelines have a morality clause? What happens if one of your partners does something that causes a public relations debacle? How would your business handle that?
What’s the one piece of advice you wish every entrepreneur knew?
Once you’ve decided on a comprehensive, long-term plan with your advisor, act on it. I always say that you have to “move at the speed of instruction.” These aren’t plans to put in place in five years; get it in place now.
When your own financial professional is a successful business owner, they can help you achieve your goals. Speak with your financial representative to learn more.
Brought to you by The Guardian Network © 2019. The Guardian Life Insurance Company of America®, New York, NY
2019-72144 Exp 1/2021