How I Launched My Small Business As An Independent Financial Advisor

by Guest Blogger on 2011-03-232

This article shares one financial advisor’s personal story on how he launched his small business. It includes a video as well!

I am pleased to have Jeff Rose as our guest writer for today! Jeff is an Illinois Certified Financial Planner and co-founder of Alliance Investment Planning Group. He is also the author of Good Financial Cents, a financial planning and investment blog. He is also currently working on his first book entitled Soldier of Finance. You can find out more about his mission at the similarly titled blog Soldier of

This post is dedicated to all you entrepreneurs and aspiring business owners out there. If you’re interested in starting a small business, I’d like to offer you some tips on how you can go about doing so — and be successful! I took a stab at becoming a business owner when I left my old brokerage firm and co-founded Alliance Investment Planning Group. We became small business owners literally overnight and the experience introduced me to a whole new world that I wasn’t accustomed to.

It’s been a learning experience to shift from being a W-2 employee for basically my entire life to becoming a 1099 independent contractor who has to manage the day-to-day tasks of a small business owner. Luckily, I had a good CPA to help me along the way, and I had some partners walk me through some of the issues. Hopefully, some of the tips that I share here will give you some insights, if you’re thinking of going down this route as well.

Before you get started (and depending on the business), you’ll most likely need some sort of funding. One option is to take out an SBA (Small Business Administration) Loan. There are certain restrictions that you must meet to qualify, but it’s a worthwhile option to explore.

Business Set Up

First things first: how do you plan to set up your business? Are you going to be a sole proprietor or a partnership? Or will you set up a corporation? Choosing to be a corporation comes with further complexities as you’ll have to decide whether an S Corporation or C Corporation is the way to go. See, isn’t starting a business fun? πŸ™‚

Here are a few more things to consider: do you want to form an LLC? An LLC is a bit above my pay grade. I just know that a limited liability corporation means that I should have some protection in the event that some litigation is brought against our business. You’ll want to consult an attorney — someone that is a subject matter expert who can help you make this determination. You might want to look into the additional cost of forming an LLC. We did this with our practice, and I’m actually looking to do the same thing with my site, Good Financial Cents. When establishing a business, know the pros, cons and costs of each option.

Location, Location, Location

Once you start a business, you’ll need to decide where to locate it. For a lot of small businesses this is huge. You always hear the phrase, “Location, location, location!” For us, this was initially quite tough because we came from an office that was newly built and beautiful. In the college town that we reside in, there wasn’t (and still isn’t) a lot of available office space, especially at very affordable prices. Being a financial planning firm, we knew that we had to have something that was somewhat respectable. We looked around and we actually found a shared office space that allowed us to rent out five offices. It had a shared conference room, bathrooms, and a secretary — all these came with our lease, which turned out to be pretty affordable. However, to find and secure the right office space turned out to be a challenge.

Some questions you’ll need to ask regarding your location: Are you going to rent? Are you going to buy? How much parking do you need? Will you need to expand at some point? Is it more affordable to build? Can you share office space with another business?

Or how about this option (a rather popular one for many): can you work out of your house? That can also be a very feasible (and affordable) option for you. One of my best friends is a photographer who started off without an office. He didn’t have a location. He would actually meet with people at a restaurant or a book store for their initial meetings to work out contracts to do their photography. When his business grew, he moved to a studio; but it took some time to get to that point.

Whatever you do, you don’t want to get ahead of yourself and start off too big. I had another friend who was once a chiropractor who started his own business. He went out and bought a very nice building and a lot of equipment. Within about six months, he went bust. He started off with excessive expenses from the get go, which turned out to be a risk. Even if you start off with a lot of enthusiasm about your business, you need to watch and monitor your cash flow. You can’t be reckless about your expenses or spend (invest) way too much right away. You want to consider location. You obviously want to have a good location, but you also have to consider the bottom line.

The Right Equipment

The third thing that you’ll want to consider when starting your own business is the kind of equipment that you’ll need. As I mentioned earlier, my chiropractor friend went out and bought the biggest, baddest equipment that existed. He spent tons and tons of money. I don’t really understand the chiropractic practice, so I just assumed that he knew what he was doing. Then, after he went under, his colleagues who were also chiropractors told me that he had spent way too much.

For my particular situation and my business, I didn’t really need a lot to set up a financial planning practice. We needed printers, computers, desks, filing cabinets, faxes, phone lines, computer networking, etc. As you look to start your small business you’ll want to do a quick inventory of the stuff that you need and the things that you can probably do without.

At our old office, I was actually accustomed to having everything provided for me. For instance, we had this commercial grade shredder. We had all the little office things that you would typically need, such as a paper cutter, three-whole punch, staplers, etc; just all those little things that were always ready for us to use. But to run our own business, we now needed to go out and buy this stuff ourselves. We’ve become a little bit more cost conscious because we were picking up this stuff and our equipment on our own dime.

Market Yourself

Next on our to do list? We also started looking at marketing materials and the way that we were going to go about marketing and advertising our services. Being a new financial planning practice, we were kind of lucky in a sense because we had clients whom we counted on staying with us even as we switched firms — this way, we didn’t have to start from the ground up with a brand new client list. Of course, it was still necessary for us to differentiate ourselves from former companies that we used to be a part of, so we went ahead and designed our own stationery, business cards, envelopes and brochures. These were some up-front costs that we had to consider.

On the marketing / advertising side we actually didn’t do a whole lot. Like I said, we benefited from the fact that we already had an existing client base, but if you’re a brand new business, then you’ll have to focus a bit more on advertising. Are you going to use the Yellow Pages? Are you going to build a web site? Are you going to take out ads on Facebook? Are you going to hire someone to handle your social media campaign? Obviously, as a new business owner, you’ll have to make sure that you’re addressing your priorities appropriately and channeling your efforts towards the most important tasks. You probably don’t have a lot of money coming in at first, so I’d suggest that you start out by using free tools like Twitter or Facebook to get your name out there. Make sure that while you’re doing this, you’re also balancing your time and efforts, as you need to make sales or generate revenues to keep your business going.

For those who have limited funds but who want to start a business, I suggest you check out this awesome post by Joel Ohman over at the Art of Manliness. Joel offers his “Top 10 Money Saving Business Startup Action Items”. It’s a tremendous resource for any aspiring business owner.

Build A Contact List

Make a list and check it twice! If you want to start a business but you’re not quite there yet, try to generate a client list or a potential customer list before you really get going. You can do this by collecting email addresses, names and phone numbers so that by the time you get ready to launch, you already have a database of potential customers you can work with.

Don’t underestimate word-of-mouth marketing. Anywhere you’re situated, word-of-mouth marketing is H-U-G-E. It’s priceless. I won’t say it’s easy, but it’s cheap. Tell your story to as many people as you can and tell them how you can benefit them. This type of marketing works well when you’ve created a customer list early on.

Final Thoughts

I hope these were some helpful tips to get you started on your venture. Being an entrepreneur, I can tell you that it’s a challenge at times, but I wouldn’t have it any other way. Making the transition has been one of the best and most rewarding things I’ve been able to achieve, and I now can’t imagine going back to being a pure employee of some big outfit.

I admire small business owners for taking risks, for taking that leap of faith and for following their passion and vision. When you begin your journey as a small business owner, you should have clear concise goals every step of the way. I wish you the best of luck!

Have you started a small business? What are some of the challenges that you’ve faced?

Jeff Rose is an independent financial advisor who loves Crossfit workouts, writes about Roth IRA rules and craves In-N-Out burger. You can follow his updates on Twitter: @jjeffrose.

Editor’s Note (aka SVB’s thoughts): I had the great pleasure of meeting Jeff Rose and his lovely wife Mandy not long ago when they visited the SF Bay Area. And yes, I can attest to the fact that Jeff truly craves In-N-Out burger! πŸ™‚ For additional resources on this topic, you can also check out these articles:

Copyright © 2011 The Digerati Life. All Rights Reserved.

{ 2 comments… read them below or add one }

Henry Chiu March 25, 2011 at 7:56 pm

Great post, and I agree. When starting a small business you need all the help you can get. I highly recommend people start a small network of advisors and potential customers who can give them feedback on their business… I’ve started a business alone awhile ago and it can get daunting, so you need all the help you can get!

Henry Chiu

The Digerati Life April 3, 2011 at 12:07 pm

At the end of the day, we’re all just hard-working small business owners who are seeking a chance at financial independence by providing a service or product. Jeff is a tireless worker and has such a lot of energy! Things have changed quite a bit since I was his age. πŸ™‚ But what’s exciting is how online business allows anyone, young and old, to benefit. I find Jeff’s story highly inspiring!

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