Equity Value Enhancement

Chapter 2Focus on Trusted Advisors

If an advisor can differentiate by the knowledge and relationships that would allow the business being served to flourish, then the discussion changes when a competitor comes knocking, which they will inevitably do. Your competitor contacts a client and identifies current provider price point. If the client says I pay $250,000 for my annual services, the competitor may offer a $50,000 fee reduction; however, if the client explains his risks are lower, profits are greater, and his value increased by $5,000,000 last year, how many competitors can readily offer a 20-to-1 ($5,000,000/$250,000) return on the relationship? Very, very few.

Let's set the stage. A current, past, or future client has needs and wants. She or he has beaten the long odds and operates a thriving $125 million company. Has the company grown due to unique skills offered by its provider(s)? Or, have the providers grown their billings due to having the good fortune of serving a company that operates very successfully? Perhaps the company has mastered client, vendor, and staff relationships with a culture of empowerment, cohesion, and community. Maybe it has levered the knowledge of several clients, vendors, and key staff to develop a unique knowledge-based product or service.

For the advisor, a larger client may equate to more complexity and more billable hours or higher commissions. But has anything special been offered to this “A-grade” client not available to other “lesser” ...