Building a business

As announced previously, I am going through a number of steps to hang out a shingle on my own. I'll be doing financial planning and investment management; combining what I love to do, I love to talk about, and what I can see myself doing for a long time without burning out.

In the next few weeks, I'll post somewhat frequently about the steps in setting up such a business. While a sole proprietorship in some industries can be started by simply taking on work, this type of business is quite convoluted in some ways.

For liability reasons, I have decided that I need to either incorporate or form an LLC. And as a financial planner, I will need to pass the NASD Series 65 test to become a Registered Investment Adviser (RIA).

Those two steps, and the associated compliance, will take a couple months as well as about $7K to get the ball rolling. Then there are the practicalities to think about:
An office, a home-office, or a "virtual" office?
Equipment? Laptops, smart phones...
Business name, fictitious business name, trade/service marks, logo design...
Domain names, building a website...
Accounting! Taxes!
CRM (client relationship mgmt) software, electronic signature vendor...
Marketing! Advertising! Networking (I don't know any millionaires, personally), what is my niche? What are my bragging points?
What services exactly will I offer? Pricing?

Fortunately I do not see myself hiring employees for a long time yet... reading up on all the hoops that an employer must go through gave me a headache.

One thing I know for certain, is that I will be using the Spoke Fund concept (see www.SpokeFund.com) for how I handle investing money. Starting a mutual fund would cost about $400K, and while a hedge fund is much cheaper, you can only advertise to "high net worth individuals"... or basically millionaires. With a Spoke Fund, the investor's money remains in his or her own name, with a discount brokerage custodian I select, but invested according to a model of stocks I control. Importantly, my own account is the "hub" - where I am invested in the model myself with all the risks and rewards - and the "spokes" connecting my account and my clients' accounts are simply the model's percentages of the various investments.

As to financial planning, I intend on being a fee-only planner, taking no commissions, kickbacks, or other incentives for the products I may recommend.

So please, gentle reader, lay it on me! Ideas this post may have raised? Questions on the whys or hows? Advice from experience? I thank you and look forward to any comments!

Regards,
Trond

Managing money and Port24 update

First, let's get the Port out of the way: I sold calls against the EXEL position today; 11 Jul $10s for $0.65 per share. Cash is up to $1,096.58, and the overall value to $151,963.58, a 16.9% annualized return, beating the S&P and Nasdaq by 18 and 12% respectively.

The big news in my personal life is that I will be hanging out a shingle to manage money and do financial planning. Getting going will take a couple months in between studying and passing the Series 65 exam, getting registered with the State of California as a Registered Investment Adviser, and starting an LLC.

Besides looking at people's finances and finding ways to improve their moeny situation, I will be offering a couple "funds" - a growth and a growth/income option. More information will be forthcoming! I think I will be using the construction of this business as a blog series, so if interested in the creation of an entrepreneur, please stay tuned! My blog portfolio will stay a fixture, but I'll also use quite a bit of the analysis I'll be using on my company funds to do an even better job managing the Port.

I would ask the readers to please take a moment to hit the 'Post a Comment" link and let me know what it would take to make you call a financial planner, and utilize their services. Thanks!

Regards,
Trond