Ep 372: Quadrupling Revenue By Restructuring Your Business Model To Reflect Your Entire Value To Clients with Melody Townsend
Feb 13, 2024
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Melody Townsend, President of Townsend Financial Planning, shares how restructuring her business model to reflect the entire value to clients quadrupled her revenue. The transition from financial planning to a more inclusive wealth management approach enhanced client services. The challenges of scaling a business, team building, and the evolution of Melody's role as a leader are also discussed.
Transitioning from a fee-based to a value-based model can significantly increase revenue.
Offering a comprehensive wealth management approach attracts more assets under management and reflects the full value provided to clients.
Building a trustworthy and capable team is essential for scalability and allows for delegation of tasks.
Deep dives
Restructuring the Business Model for Growth and Scalability
Melody Townsend, president of Townsend Financial Planning, quadrupled her revenue in two years by transitioning her business model from standalone hourly engagements to a comprehensive wealth management offering. This shift allowed her to reflect the full value she provides to clients, attract more assets under management (AUM), and scale up her firm.
Overcoming Limitations of the Hourly Model
While the hourly fee-only model provided flexibility, Melody discovered its limitations in terms of growth and scalability. She realized that clients were not always implementing her recommendations and leaned on her for implementation help. This led her to reevaluate her pricing strategy and shift to an AUM fee, incorporating investment management implementation alongside financial planning.
Client Response to the Fee Change
Although Melody was concerned about losing clients when she increased her fees, she found that most clients acknowledged that she had been undercharging. Almost all her clients decided to stay, and many consolidated more assets with her, recognizing the value she provides and the need for a comprehensive wealth management approach.
Investing in Infrastructure and Hiring the Right Team
To sustain her service model and meet her business standards, Melody invested in infrastructure, business coaches, and employees. She hired team members based on character over technical skills, ensuring they shared her values of integrity and work ethic. This allowed her to delegate tasks, enhance communication, and empower her employees to deliver high-quality work.
The Importance of Building a Team
Building a team was essential for Melody as a financial advisor. She recognized that she couldn't do everything on her own and needed help to serve her clients effectively. Hiring trustworthy and capable individuals allowed her to focus on training employees, meeting client needs, and managing her various roles. Although it initially felt overwhelming and stretched her time, bringing on a team eventually proved to be the right move. It alleviated the pressure and allowed her to delegate tasks, resulting in the growth and success of her practice.
The Benefits of Delegation and Empowering Employees
Melody learned the importance of delegation and empowering her employees as her practice expanded. Initially hesitant to let go of control, she realized that she needed to trust her team and give them autonomy. Delegating tasks, creating standard operating procedures, and instilling a culture of accountability improved efficiency and client service. By investing in her employees' growth and development, Melody saw her team members become confident and capable professionals. This empowerment not only enhanced the client experience but also allowed Melody to focus on strategic aspects of her business, leading to relief and positive outcomes.
Melody Townsend is the President of Townsend Financial Planning, an RIA based out of Kentucky that oversees $112 million in assets under management for 160 client households. Embracing a transformative business model, Melody's strategy centered around providing a comprehensive suite of services, blending financial planning with investment management. This significant shift from a fee-based to a value-based model underpinned the firm's remarkable growth trajectory, leading to a near-million-dollar revenue stream.
Listen in as Melody shares the intricacies of her 20-year journey, detailing the pivotal transition from financial planning to a more inclusive wealth management approach, and how this strategic shift not only quadrupled the firm's revenue, but also enhanced the quality of client services. The discussion also covers the challenges of scaling a business, the importance of team building, and the evolution of Melody's role as a leader and advisor in the financial industry.
