Paul is a financial planner and owner of guidance financial services. He helps Australians plan and invest so they can gain the choices in life that they deserve. In addition to that, Paul also hosts a very successful podcast. His podcast is called financial autonomy podcast.
Book: The Lean Startup by Eric Ries
Tools: Gmail, Xero for accounting, and Intercom as a CRM
Financial Autonomy podcast has been going 2 years, however Paul has been a Financial Planner for 20 years, running his own practice since 2006. Started the Financial Autonomy podcast following the realization that the traditional work/life plan is far too narrow, but most people don't get the choice to do anything else.
2008-2009 period was very challenging with share markets diving – Paul reduced his staffing, his wife came in to assist so that we could retain cash flow within the household, focused in on a particular retirement strategy that held some appeal during this period - just didn't quit!
Paul’s advice to entrepreneurs? You don't have to go all in from day one - build and plan - real life is not like the movies. Work out your marketing plan at the outset. You likely know your stuff, but unless you have a way to let the world know about it, you wont succeed. Monitor your cash flow - it's no good making a profit at the end of the year if you cant pay your rent in month 3.Don't fall for the prescribed life of having to work until you're in your 60's and then having to retire - life can be far more varied than that.
Episode Transcript (Click to expand)
Ramesh: Hello everyone. Welcome to the agile entrepreneurial podcast. This is your host Ramesh Dontha. This podcast is about starting and building your own business with purpose, passion, perseverance, and possibilities. Today I have a guest from across the world, the very first time from Australia. His name is Paul Benson. Paul is a financial planner and owner of guidance financial services. He helps Australians plan and invest so they can gain the choices in life that they deserve. In addition to that, Paul also hosts a very successful podcast. His podcast is called financial autonomy podcast. Hi Paul. Welcome.
Paul: Hello. Ramesh. Thanks for having me on. All right, so let's start with your podcast itself. You are a financial planner. Instead of just a having a financial services business, you wanted to start a podcast, why?
Paul: Well, initially the train of thought was a random marketing strategy. I guess the little bit of backstory there is, I’ve been a passionate podcast consumer for a long time now. You know, I had on runs and walks and that sort of stuff. I've have been enjoying listening to podcasts for a long time. And I guess, I know for your listeners it's about entrepreneurship and building up business. And I’ve been running my own business for a while and something that I’ve discovered that at least for myself and I think others too, is easy to underestimate, is how challenging it is to get a successful marketing strategy. Something that's repeatable and that generates a positive ROI. And so, I’ve tried all sorts of things over the years and I’ll have to say most of them haven't worked. And so along the journey decided, look, I love podcasts and how about we give that a go as a marketing Avenue and almost surprisingly, but it's actually worked. And I know that obviously you're a podcaster as well, so you've discovered a similar outcome. But yeah, it's one that's been successful for us as a marketing channel and something that we've expanded on in a few different areas since, which you could maybe touch on later, but certainly in terms of was start the podcast. It was about marketing to grow the financial planning practice.
Ramesh: Excellent. So, I mean it looks like you have crossed 100 plus episodes. Congratulations on that one.
Paul: Thank you.
Ramesh: Are most of your podcast listeners from Australia or you have listeners from across the world?
Paul: Yes. Look, today we've focused on Australia and that's really because thus far as a site was a marketing channel for the financial planning business. And financial planning is pretty local. For instance, your, you know, 401K like in the United States are quite different to what we have here in Australia. So that's been a little challenging to translate. Down the right I do have some interest in trying to expand beyond Australia, but we might just need to have a slightly different offering there. So yeah, to this point it's been quite Australia focused.
Ramesh: Excellent. So, Paul, because we don't know much about the entrepreneurship in Australia, I would like to dig a little bit deeper into entrepreneurship in Australia. First let me start with some statistics. In the US, the more I read, I discovered that 70% of the U S adults who would like to start a business, right. Actually only 15% do something about it. So, the number of businesses that get started at less than 15% of whatever. So, there is a huge gap and there are a lot of factors why that is the case. We can get into that later. But how has the scene there in Australia about entrepreneurship?
Paul: Yeah, look, I think in Australia, in the United States. I suppose I would think of them as cousins. You know, we're pretty similar. Obviously, we speak the same language and we both watched Netflix and you know, we are doing the same podcast. So, there's a lot of commonality between Australia and the United States. I, I would think from an entrepreneurship, probably not quite as strong as the United States. But nevertheless, obviously we're a capitalist society and you know, there's plenty of hungry people out here too.
Ramesh: Excellent. So, the question about your own journey you probably had a chance to go work for somebody else right after your college. Did you go work for somebody else? And then later on you started on your own path. Can you just go over the journey please?
Paul: Yeah, absolutely. So yes, look, I worked for a bank, one of the, one of the big banks here in Australia. And in fact, I worked there for 16 years. When I finished high school, I wasn't quite sure what I wanted to do at university. And so, I was, fortunately I got a job at a bank, a pretty low-level job, but nevertheless and then I guess I’ve got a bit more clarity as to what I wanted to study. And the bank was good enough to sponsor me through that. So, I ended up doing my degree on a part time basis, so a half load and working at the bank whilst I studied. So that worked quite well. And, and yeah, they supported me financially and gave me time off for exams and that sort of stuff. So that was excellent. And so, I ended up at the bank for 16 years and the final seven of those was as a financial planner. And so, I guess in a financial planning context, I sort of think of that as my apprenticeship, if you like, in the financial planning space. And then in 2006 I guess I got to the point and I know speaking to friends, it's not an uncommon one where you're enjoying a particular role that you're in, but the nature of big organizations is that is an expectation you're going to climb the corporate ladder. And I was a senior financial planner, I was in terms of actually sitting in front of clients and helping them with financial planning. I was as high as I could go. And the expectation was we'll, the next step is to become a team leader. And I didn't want to become a team leader. I liked planning. So, and I guess I had always harbored a bit of an ambition to have my own business. And so, in 2006, I made the leap and left the bank and started my own business. And at the time I had, you'd imagined as a financial planner, I'd thought a little bit about the numbers. And so, I had some accrued leaving things that I hadn't used. So that when I finished up, I had about eight months wages as a lump sum and then I guess was my runway to start the business. I was fortunate that I couldn't, in leaving the bank, you know, I couldn't approach my old clients. There are contract issues there. But nevertheless, some of the clients found me and which was lovely. And so that gave me a little bit of a start. And then I worked on growing organically and then an opportunity came up in 2008 where a planner was retiring and selling his business. And so, I was able to acquire that. And that was a sort of, it was a bit like hitting the fast-forward button for where I would have been you know, had I just continued to grow organically, just sort of pick up a group of clients and be able to work with those was fantastic. Now, 2008 was a challenging time and probably more challenging in the United States than in Australia. But I mean it was pretty global in terms of share markets had a horrible period and economies generally been doing it pretty tough. So, my timing perhaps wasn't brilliant there. But it's easy to see that in hindsight, we started negotiating in 2007 and these things take a while to come to fruition. And yeah, so look, there are issues with my timing, and I guess again, just thinking about your listeners and lessons that they can take. I suppose as a buyer, look, I’ve always felt I paid a bit too much for the business, but I think talking to everybody else, nearly every buyer thinks they pay too much and probably nearly every seller thinks that they didn't get enough for it. So, you know, to be cautious when you're, when you're buying a business, I would encourage people to consider that as a way to accelerate becoming viable as a self-employed person. It's certainly worked for me. But you know, be cautious on what you pay, but also recognize that no matter what you pay, you'll probably always end up feeling that you paid too much. I think that's just inherent in the nature of it. So yeah, so acquired that business and you know, there's been various bits and pieces that probably don't need the detail from there, but, you know, we've essentially grown and built from there. And you know, it's still not a huge business. I've got three staff and we look after a group of clients and you know, do our best to love them to death and make sure that they achieve the objectives that they're trying to achieve.
Ramesh: Excellent. Paul, that is a really, really good story. It gave us a lot of inside scoop on how you were feeling and what you were doing. So, but let me just dig a little bit about the 2008-2009 piece. I believe I read it on your blog itself, on your website. It was, it seemed like a tough time personally for you. I mean, not only that, you bought another practice and then the economy was in deep recession at the time. So were there times where you taught probably should go back or your regretting your decisions to study our own and then of course you are also bought something as well.
Paul: Yeah. Look, there's certainly, I guess after I bought the business any to do that required me taking on quite a bit of debt, the most debt I'd ever had in my life. And as you say, the economy was doing it tough. It wasn't quite as bad here in Australia, but nevertheless it was down. And the share market, which was particularly relevant for the business at the time, because a lot of our revenue was based on a percentage of client’s balances. It's less so these days. But at the time that was an important source. And so, client's balances went down because the share market went down. And so therefore our revenues went down. But of course, I still had a loan disservice. So, it was challenging. And certainly, I know I can quite vividly recall sitting down with my wife and talking about, well, gee, we might need to sell the house here. You know, cause it’s getting challenging as to how are we going to make this work. I mean, I had to at that time only had one staff member and I had to make him redundant, which was not a lot of fun. And that was actually in fact, prior to that, he'd already cut down to four days a week from five days a week to try and give us a bit more runway. But even then, you know, it was a tough time. So, it was challenging. I suppose in terms of going back, well, the reality is I had a debt there and I had to work my way through it. So, I guess I knew I could always go back. I left on good terms and back management and said that I would be welcomed back. So, I knew that there was a job waiting for me potentially if I wanted it, but that wasn't going to solve the problem of a pretty large debt. So, I really did just have to work hard. My wife actually says so, I only had one employee, well, I had two. One was sort of finish it up and I didn't replace them. And then the second person I had to make redundant, so my wife actually came in at the time she was at home with young children, so she came in and gave me a bit of administration support, so that at least as a household there was no money leaking out and we just really tighten the belt and just worked their way through. It was a challenging time, but we got there. To some extent the fact that markets were down, at least the clients that I'd taken on as part of the acquisition, they came to talk, you know, when things are going well...
Ramesh: Nobody wants to talk to you.
Paul: Yeah, yeah. Just, they're happy for things to tick over, that's fine. But when things are tough, it's like, gee, yeah, I do want to think about opportunities and at least that was good. There was an opportunity for me to sit down and really build relationships with clients and I had the time and I clearly had the desire to strengthen those relationships. And so, you know, even in bad times there are some positives to be gained. I guess also slightly had the challenge that the bank that had loaned me the money decided that they didn't want to be lending in the financial planning space any longer and therefore they all had a better two- or three-year loan. So, I had a little bit of time frame, but you know, that was an added bit of complexity that I didn't really stress that I didn't really need. And certainly, I’ve never done any business banking with that bank again. You know, that won't be forgotten. That was pretty disappointing that in difficult times the bank certainly wasn't there to support you and I guess that's certainly a learning I’ve taken from that period is these days I always have lines of credit loan facilities available, not drawn down, just available. During the good times when we are making good profits and always ticking over well because my experience is that in the hard times banks don't come in and help. Banks look after themselves. And there's no point in when times are tough go into the bank cap in hand and asking for help, because my experience is, they won’t. So, you need to go when you're in a position of strength and set up your facilities and it might cost you a little bit to keep those facilities open. But nevertheless, have them open and available so that in difficult times you don't have to be asking for five is you've got things lined up already.
Ramesh: Right, right. Hey very good. So now let me switch a little bit and then talk about your clients. Are there any entrepreneurs in your clients? Like what is the general mix of your clients with respect to salaried people and are retired versus entrepreneur’s kind of stuff?
Paul: Let's say well, relative to the broad population, I guess we tend to skew a little bit older. I mean, generally perhaps people in their twenties and even thirties might not have financial planning relationships, although increasingly in their thirties they do. I guess financial planning does become a bit more important as you approach retirement. You've got your retirement savings and you've got to know what to do about it. So, our client base would skew a little bit to the older demographic, but we've certainly got a mixed client in our thirties, forties. I don't have the stat, but if I was to take a stab, I would've thought the average age of our clients, probably mid-fifties, something like that on average, I'm guessing. In terms of employee to self-employed, I mean this is a mixture of both. The majority would be employee the same as the overall economy, but certainly we have some self-employed and business sign clients in the mix too.
Ramesh: Okay. So just talking about the self-employed people, I mean, you have discussions with them, you engage with them about the planning in terms of characteristics that you see, because one of the things that we always dig into a little bit is what differentiates the successful entrepreneurs from entrepreneurs who are struggling right across many spectrums, right? From a financial planning perspective. Speaking from your experience as you engaged with these people, entrepreneurs, self-employed and business people, what, what I mean some things I'm sure are coming out to you like it or some are proactive, some are reactive. Anything that you can talk about people you sense an entrepreneur which make them successful?
Paul: Oh, I think it's about spending habits and lifestyle habits. So, one particular client of mine who's been extremely successful in the building trade and yet you could cross him, you know, walking down the street and you would think he earned, you know, 20,000 a year. Like he's not in any way glamorous. I mean I’ve been to his house; his house is certainly impressive. But in a general context, cars he drives and this sort of stuff very down to earth, normal guy, not extravagant at all. The ones that I see struggle are the ones that feel the need to try a certain image. So, they feel that, well to demonstrate that I'm successful in my business, will I have to drive the Audi or the Porcha and I have to look a certain way and I’ll have to be loud and boisterous and you know, shout everybody at lunch, those type of people often. Then I sit down with them and we go through their personal balance sheet, It's dreadful. You know, they'll owe heaps of money on credit cards and all sorts of things. But their intent on portraying to the world this success and these big games and big noting themselves. And typically, they're the financial values. So yeah, look, that would be my observation. It's the more modest people that sort of keep their head down that are the successful ones.
Ramesh: So, the Warren Buffets of the world.
Paul: spot on.
Ramesh: Okay. Excellent. Yeah. So, he is clearly down to earth and all this stuff. Okay, good. So that's fine. So, let's talk about your business. You talked about growing your business right over the years. So, as you're growing the business, are you consciously looking at this is how I want to grow my business. Maybe the sudden segments, let's say, Hey, I want to go off for the building industry and I want to go after whatever, is that how it's working out? Or is it organically through word of mouth, your clients just bring in new clients? How does the growth happen for you?
Paul: So certainly, a combination. And I guess again, just thinking about lessons that, that I can share to help your listeners. I'd encourage them to be thinking about a combination too, because the reality is, so look over time we've thought about different focuses and different ideal clients and how we could communicate with different ideal clients. And sometimes that's worked and sometimes that hasn't worked. And if we put a hundred percent of our effort into saying, all right, this particular type of client is all we're going to focus on and everyone else we're going to turn away. Well, if that didn't play out, it would be a pretty ugly situation. And whereas what I tended to do is, all right, here's a particular segment that we think is interesting. So, let's work on how we can communicate that we exist and promoting our services to that particular group. But at the same time, continue to communicate to our existing clients that, Hey, if you're happy with what we're doing, plays refers to a friend. So that's something that we communicate regularly to our clients through different communications that we have with them. And then we also have relationships with other you know, professional people that we work with, most particularly accountants, but mortgage brokers and the like as well. So, relationships with other people that you know, you can build those relationships over time. And with I then if I have a client that has a financial planning need, they can refer those clients to us and then we various ways that we can make that work commercially. But you know, that's been an important source of new client acquisition for us too. So, I think it's important in a business, particularly once you've got a few staff and with that as a business owner comes responsibility. I mean, I know that my staff have got mortgages to pay and the like. And so that's a weight of responsibility on my shoulders. I've got to make sure there's money in the bank to cover their wages. And so, you definitely want to ensure that there's a few different strings to your bow from the marketing strategy point of view. Because I mean the other thing too is cyclical. So, like say as I mentioned accountants, we've got relationships with a couple of good accountants and I refer as clients, but accountants naturally have ebbs and flows in their own business. There are times where there were personal tax returns to do and they flat out. And then there are times where there's not and things are quieter. So, you'll tend to get waves of referrals from those partners at certain times of year and then nothing for perhaps the next six months. So again, you need, you need multiple avenues to your marketing approach. And so yeah, that's the way I’ve certainly done it.
Ramesh: Excellent. So, Paul, the other thing about business people is that they would like to differentiate in some way. So, and I'm sure you're competing with other financial planners in your area. So, you need to differentiate, I mean, how do you see yourself as differentiating in with respect to other people?
Paul: Yeah, that's a really good point in something that I’ve wrestled with really for the entirety of running the business. Because you're exactly right. There are lots of other financial planners as there are in your country and similar to over there in the United States. It's a pretty regulated industry and because you've got to comply with the regulation, of course, that tends to create a bit of uniformity in the industry. We're in a profession and so it's not easy to stand out. And yeah, it's certainly something that I’ve struggled with. But I guess that's something where the podcast has really helped, have got that focus as you touched on in the introduction, you know, our theme around the podcast and indeed we have a weekly email as well. And the weekly email is called gaining choice. And that's the same as the podcast as well. And that's just something having been working with clients for 20 years now. Something that I learned early on in financial planning discussions, we normally talk about goals because everything else sort of flows from there. What are your goals? And very often people are, they want to pay off the home loan, save for retirement, regular sort of stuff. But actually, what I found over the years is sure they want to achieve all that, but if we dig a little bit deeper than that, what they really want is the choice, the choice about when they want to retire. So very often if I'm sitting down with someone who's 45, it's difficult for them to say, well, I want to retire at 60 or 65. I don't know how they're going to feel at that point. It depends what happens with their job. It depends who their bosses or whatever they are doing. So really what they're saying is I want the choice to retire at age 60, now 65 or whatever that point might be, 50, whatever. So, I guess I’ve come to recognize that choice is what people are seeking. And so, we've used that as our theme, and I guess as our point of differentiation that what we try and solve for our clients is how they can gain choice in life. And for some people that's about retirement. For some people that's about moving from employment to self-employment. It might be about a career change. So, choice can look like all sorts of different things. And that's, I guess that's what we're trying to explore in the podcast. But yeah, that gaining choice. So that's been my way of differentiation. I mean, as you mentioned, we're at about a hundred episodes of the podcast and they go out weekly. So that tells you that it's been running for about two years and it was about six months in the incubation before it went live. So, it's about two and a half years that we've been running this. But of course, I’ve been running the business since 2006. So, it's certainly not the case that from day one I had this figured out and I'm sure, and I wouldn't profess to have it totally figured out now either. But I do feel that things are tracking along well. But I guess, you know, I wouldn't want listeners to take away that, you just wake up from day one in the morning and you just know your direction. Certainly, wasn't the case for me and for other people that I’ve spoken to, it's not the case for them either. In fact, I read just recently Charles Darwin, you know, theory of evolution and around the fact that people who have read his journals, he was sort of circling around the idea of evolution for years before he really just jelled. And I just really took that away is really useful and certainly applicable to me and I suspect applicable to a lot of other people. Sometimes you read articles or podcasts and it's like this sort of genius just woke up one morning and it was just all clear and in front of them and they knew exactly what to do. Well that hasn't been my experience. I've been trying different things and experimenting with different things and different targeting and trying to see what resonates and what captures people's attention. And it's really taken some time. And as I say, I don’t think we've, you know, I wouldn't claim that we've totally nailed it now either, but a couple of years into this whole financial autonomy project, it does feel like we've certainly found something that's working for people. And so that makes me very happy and I know then I wouldn't have been invited on your show. So, there's another good reason to be happy for it.
Ramesh: That's right. And Steve jobs said, if you really look into overnight success, it actually took 20 years in the making.
Paul: Well, there you go.
Ramesh: Yeah. So as the last, a couple of questions, maybe the last question is what are the three to five tips that you would like to give or advice you would like to give to that aspiring entrepreneurs?
Paul: Focus on your marketing strategy. I mean it's a bit of a given, you know, in my case I knew financial planning, whatever you're going to start your business, I would hope it's a given that the particular area that you're going to start your business, you know. But that's not much good if you don't have any clients, sooner or later someone's got to buy it, whether it's a B to B situation or a B to C situation. So, I would encourage people to really give a lot of thought to what their marketing strategy is going to be. Have multiple streams to that marketing strategy, have redundancies if plan A doesn't work, but at the end of the day, if your business isn't bringing in revenue, you're not going to survive. So that would be my number one strategy. One of the two strategy I think is just recognize that it's, it's a long game. It's a marathon, not a sprint. So sometimes I come across people who are going hell for leather and working 15-hour days, seven days a week. That's not smart. You're not going, your business isn't going to succeed or definitively succeed in the next six months or something. You need to be pacing yourself so that you can sustain your effort over an extended period of time. So, pacing and thinking about that long-term I think would be a key suggestion. And probably the other one is, as I mentioned earlier, thinking about your banking relationships and ensure that you've got things lined up when times are good. Don't get yourself in a position where you need to go to the banks when times are tough.
Ramesh: Wow. Phenomenal. Thank you. That's excellent advice Paul. Paul Benson from Australia, head of a guidance financial services and financial autonomy, podcasts running successfully for the last two plus years. Well, thank you very much for coming on early for you. I mean, not so early, but again. Thank you very much.
Paul: Wonderful. Thanks very much for having me on Ramesh.
26:51Ramesh: Thank you, sir.