Today I launch my company to the public.  I am now a business-owner.  It’s hard to believe that 7 months ago, I was an employee.  I worked at UBS for 3.5 years, the last 2.5 as a Wealth Planning Associate. In my role, I partnered with financial advisors to build and deliver financial plans to their clients— I worked in 5 offices across Southern California and I was available to 120+ financial advisors.  But, like a lot of clients I’ve worked with, I got bit by the entrepreneurial bug. About a year ago, I was on the phone with my manager and the head of my program, discussing my transition to the financial advisor role. At that point, I had been a Wealth Planning Associate for 2 years and I identified as a Financial Planner.  I realized the financial advisor role was not a good fit for me and, a few days after that call, I turned down the traditional advisor path.

For the first time since I started at UBS, I could see myself in other roles, like as an advanced planning consultant or as a trainer to new financial advisors.  I explored both of these paths, and I got pretty far into interviewing for the trainer role; the role would’ve required a cross-country move to New York City and for my relationship to turn into a long-distance one. That got derailed on another call earlier this year, this time with the lead trainer. He simply asked what I wanted to do.  I didn’t have a concise answer for him then, but a few days later, I had a very clear insight—I wanted to work with clients, and to do it right, I had to start a business. I had never been more certain of anything, and after I couldn’t “un-realize” it.  I tried considering other jobs, but I just couldn’t turn back.

March 2 of this year, I submitted my resignation letter to my managers. At that point, my cash flow become much less predictable and I start experiencing a lot of the situations my clients experience.

The two-Income household

When I started this year, I had a fixed salary, corporate benefits and a variable wage, I earned from tutoring finance subjects to students online and in-person.  My fixed salary covered my fixed expenses like: rent, utilities, car payment, etc; my variable income covered my variable expenses, like: entertainment, food, income taxes, etc.  With these 2 sources of income, I only needed 3 months of expenses saved as an emergency fund, before I could direct funds towards other financial goals: like retirement, a baby or a new home.

The freelancer lifestyle

Once I left UBS, I only had tutoring income to meet my expenses. This income could vary widely from week to week — I had to extend my emergency fund to at least 6 months of expenses. I accomplished this by timing my resignation to a point around when I received: a bonus, vacation pay and vesting of other benefits.  I then took a look at my expenses and starting cutting where I could.  For example, when I realized I was paying 3 times what new customers pay for high-speed internet at Spectrum, I called them about it. They apologized and lower my bill 50%. Not only did I cut my expenses, but I made an effort to increase my income. Sometimes that meant lowering my hourly fee, so that overall I appealed to more students. Other times that meant prospecting and reaching out to students for work.  I enjoyed this phase of my life, but I wasn’t making progress on my financial planning business.

The fixed income phase

About 2 months ago, I took a step back from tutoring and developing Protege Wealth Planning became my full-time+ job.  When I made that decision, I started a ticking clock.  Every week that passes, I have to pull more from my savings to pay personal and business expenses. I managed the ticking clock by strategically timing out my business expenses and by taking tutoring jobs here and there.  I also pretty much only use the free types of marketing, like blogging.  For now, I’d rather have great planning software, than expensive marketing. Also, for the last two months, while I developed my website and submit filings, my business overhead was very low, like $500 per month. I only pay for the services I need at the time.  All I really needed was website design tools and to pay fees to state regulators.  If I had Planning software a month ago, it would’ve sat unused. A few days ago, I started turning on all of the more expensive software.  This was a very exciting time, because that’s when my website became more interactive and started to feel complete. I’ll do a future blog about my firm’s technology, but to give an idea, I have 20 different services that are integrated together— meaning they talk to each other.  For example, when someone selects a financial planning package in my payment processing system, they become a contact in my Client Relationship Management (CRM) system and the time I need to build their plan is added to my calendaring system.

The rough patches

The last few months have been tough at times, especially since I took on all of the business formation duties.  I filed my LLC papers with the state and I wrote my Firm Brochure (the document I give clients with all “the small print”) to submit to the investment adviser regulators. The first draft of my brochure was rejected by the state and they identified no less than 35 changes I had to make. I probably could’ve shortened my time to get my investment adviser registration by working with an attorney, but, on the bright side, I learned a lot.  I’ve also had to completely delete and reset my website 3 times, growing pains of learning how to build a website.  Fortunately, I’d had great technical support from the State and from my web hosting provider.

What I’ve learned about running a business is you have to really lean into your strengths and ask for help with everything else.  For example, I chose to design my logo and site, because technology and graphic design are my strengths. Other advisors, might have someone else handle design, while the advisor focuses on their strengths, like investment portfolio models or managing relationships.  I wanted to write this blog because I see more people around me considering starting some type of business, even if it’s a side business, investment or hobby.  With Trump’s tax cuts to corporations, and the reduction in many itemized deductions, a business can be an effective way to harvest tax deductions ( legally of course). Also, there’s the classic principal-agent issue. As employee’s, we are the principal’s agents; we represent the principal.  We won’t work as hard, as if we are working for ourselves. That’s why even as my firm grows, and I take on other employees or partners, I want them to feel like owners.

Starting a business won’t be right for everyone, but I love working with clients to explore how a new or existing business fits into their life.  I look forward to helping clients organize their financial lives and to collaborating with trusted advisors, my term for financial advisors, business managers, attorneys and cpas.  Please schedule a meeting with me through my website to discuss how we can work together.



Leave a Reply

Your email address will not be published. Required fields are marked *

Name *