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Some advisers opt to head down either the generalist or specialist path simply becuase that is what gives them professional satisfaction – and it is not about achieving particular commercial objectives. They work the way they do because they enjoy it. Not everyone wants to have a business which achieves exceptional growth or makes exceptional money. Some want a business which just produces a steady income, or a job, and that’s ok. If on the other hand you aspire to have a high growth firm there are a couple of pretty important strategic decisions to nail down regardless of whether you wish to work as a specialist or a generalist practitioner.
Growth can be measured in a number of ways, from revenue or turnover to profitability or return to the owners, or perhaps it is defined in terms of volume – numbers of personnel, or offices, or clients. So the first decision is knowing how you wish to define growth, and understand which metrics matter most to you.
However you do decide to measure “growth” though, there are 2 essential elements required to make it happen. Those two elements are a bit different though for the two general professional practice types:
- The Generalists
- The Specialists
If your are building a professional practice that is essentially a “generalist” operation, providing a broad range of solutions and services to a wide variety of clients, then the 2 essentials are:
a. A strong value proposition centred upon the difference that you make in clients lives
b. Reliable and consistent lead generation systems with a focus on “capturing wallet share” inall areas where the firm can provide advice or product solutions.
For those building a practice which specialises either in a particular service, or area of complexity, or type of client then the 2 essentials are:
a. A strong value proposition centred upon your unique positioning
b. A far-reaching marketing machine promoting the individual uniqueness of the adviser.
Either business type can be equally successful, and either can be an average performer or a high growth business. The focus of both the positioning and creation of new business opportunities for these different models are markedly different though.
For Specialists there is an overwhelming need to be found by anyone or everyone who has need of your particular expertise. This leads to a need to focus upon getting the position and value proposition crystal-clear, and then investing effort into “being found” or “being recognised”. The positioning for the specialist is in itself a means of screening out those who are not a good fit as clients. Prospective clients do, to a large degree, self-select. They have a known issue and are looking for the right solution provider, so that means positioning consistently is far more important than just trying to generate enquiries from the market at large.
To the generalist though, generating enquiries from the market at large is perfect. Everyone with a need of some sort in your professional arena is a potential client, so generating enquiries from those with potential needs in a consistent volume matters. Typically the generalist practitioner operates at a lower revenue level per client than the Specialist, so a higher volume of opportunities is required.
Capitalising on those enquiry opportunities requires high selling skills on the part of the general practice. This does not mean that generalists are “just” salespeople by any stretch; what it does mean is that generalists have sell each potential engagement better than Specialists tend to have to do.
In simple terms think of the differences between the two in the same way you might think of the differences between an oncologist and a general practice doctor. Both are highly skilled and highly knowledgeable. One knows a heck of a lot about one area of medicine (great depth of knowledge) and the other knows a heck of a lot about a lot of areas of medicine (great breadth of knowledge, though not with the same depth in some areas as the specialist).
How each of these professionals position themselves and their businesses are quite different. How they generate the right types of clients for their practice are quite different. The margin they operate at per client will tend to be quite different too.
Many practitioners in other professional disciplines have not really grasped some of these key differences in how different practice models need their growth fuelled. If the differences in growth strategies are understood and applied though, there is no reason why your practice cannot be one which generates exceptional growth regardless of which direction a practitioner heads in.
Related: The Rise & Rise of the E-Adviser