It is hard to believe, but we will soon be completing our third year in business as Flagstone Financial Management. We opened our doors on January 1, 2017. Flagstone was a dream of mine for a number of years, but I wasn’t sure if it would come to fruition as I worked with a good group of people that could have turned into a different version of “Flagstone.” However, that firm ultimately sold to national firm, which didn’t sound as appealing as having local control and freedom, so we made Flagstone a reality. Armed with an awesome team and group of clients, we got to work and made it happen.

First, I’ll discuss some of the challenges. As a professional, you achieve a certain amount of success by serving as that professional and all of your time and attention is spent serving in that role. Once you start a firm, you are required to wear many more hats and make many more and varied decisions. In a nutshell, that has been the most challenging part. These decisions include, but are not limited to, copier leases, human resources, internal processes and procedures, regulatory compliance, technology tools and adoption, office space (lease, buy, build, how much space, location, signage, furniture, paint color, art, etc.), payroll, and legal. All of this analysis and decision-making happens on top of your normal day-to-day decisions and client facing work. So far, this has resulted in me working much more than when I worked at my previous firm. I can see how many of those decisions are one-time, or at least once every few months, so some of the “other hat” work is slowing down. We have also chosen to get outsourcing help for accounting, compliance, technology, etc., but even when you outsource, you are still ultimately responsible and have to touch significant parts of the work.  I think you get the point and I would suggest if you want to start a business, fully analyze and appreciate the time these non-service functions will take and be willing and able to invest the time to do it yourself or hire someone to do it for you.

Now for the good stuff. I have always been an independent minded, competitive and driven person with a strong desire toward helping and pleasing people (I remember crying much later than is socially acceptable for feeling like I let someone down). In addition, over time (age and savings have helped) I have thought more about the mission of the work we do and the impact we are having on our clients and community and what all is possible.  Having your own business allows you to realize the benefits of that independence, drive, competitiveness, and desire to help others.  It also can give you the platform to think and dream beyond your current reality.

A key theme for running your own business is freedom of choice. We have the choice of who we serve and how we serve them, without anyone from far away dictating that to us. If we don’t like something, we almost always have the ability to change course to make it the way we want. Examples of this include choosing to be “fee-only,” where we chose to remove the conflict of commissions that are often not transparent and make clients question an advisor’s motivations.  In addition, a few months ago we started a monthly planning option for those who haven’t accumulated enough money in their investment accounts to qualify for financial planning (or it is in a place like company 401k’s where we can’t charge an asset based fee to manage it) so that we can provide comprehensive financial planning to more people (ties into the “mission and purpose” work we have been doing). It wasn’t necessarily the best “business” or “profit” decision, but one we wanted to make nonetheless in order to serve people who want, need and are willing to pay for good planning advice, but didn’t quality for our prior minimum investable asset requirement of $500,000.  These decisions in a larger firm would have taken years and probably wouldn’t have even happened as there are often many competing incentives in a large firm. Technology is another example of our flexibility to change. We can review, analyze and start implementing new technology in a matter of weeks or months as opposed to years like many larger organizations. The rate of change in technology for investment firms is staggering, so the ability to act quickly has been and will be a real competitive advantage going forward.

The mission and purpose pieces have become more prevalent in our thinking now that many of the initial new business hurdles are behind us.  We love sharing the benefits of financial planning with our clients and community.  There are signs all around us that most people aren’t getting sufficient financial education.  Even those who had parents, teachers or mentors that taught them many important lessons about financial planning, come to us confused, uncertain and generally lack confidence in their financial path and how to connect the resources they have with their own purpose, passion and financial goals.  We look forward to sharing the benefits of financial education and planning with more and more people in the future, whether they are Flagstone clients, high school/college students or those who find and connect with us through our online presence.

Overall, there are definitely pros and cons for starting your own business. I wouldn’t assume that because you are a good professional, you will be a good business owner and manager. However, if you are a driven and competitive person, you want to control your life and business, impact others in your own way and you go into it understanding that you will work harder, longer and be challenged in ways you haven’t been challenged previously, take a chance and give it a go.  If you need advice along the way to help you make it a reality, we are an email or phone call away!

Jed Villejo