in·de·pen·dence \ˌin-də-ˈpen-dən(t)s\. noun: freedom from outside control or support : the state of being independent. ~Merriam‑Webster
Independence Day is my favorite holiday. And like most holidays, it usually gets me to thinking. Now, sometimes all this cogitating this doesn't amount to much, but sometimes a few dots actually connect.
What does it mean to be an "independent business"?
Of course all businesses are interdependent. They rely on buyers and suppliers and all sorts of other relationships.
Yet there is still such a thing as an independent business.
What does that mean?
According to the National Federation of Independent Business, the typical NFIB member employs 10 people and reports gross sales of about $500,000 a year.
But does that really capture all of it?
Is "independent" simply based on size? Is it simply the absence of a franchise agreement?
Is it simply not being at the mercy of a huge supplier? How about not being at the mercy of your biggest customer? Not being at the mercy of the bank?
I propose a definition like this: "independent" means ability to make independent decisions which place the customer's best interest first. An independent business is free from all encumbrances and motives that might prevent it from fulfilling it's fiduciary responsibility to it's customers.
Free to do the right thing - every time.
This takes on a whole new meaning in the financial world - as well as in the environmental consulting world where I work. Much more than in, say, the pizza business, for example.
When you call your pizza guy and he makes an upsell, the effect of extra mushrooms and cheese probably has limited downside - at least short-term!
For financial advisers? Oh, now that's a different story.
Of course the financial industry has strong laws to prevent abuse. If a financial adviser makes recommendations to their client which result in benefit for an affiliate or partner firm or a subsidiary, they certainly have to disclose that.
This issue is so important that it has caused the rise of "fee based" financial advisers, and their appeal is that they are not hawking anything. They are independent, and people can see that value and are willing to pay for it.
The environmental consulting world is much more loose. These same sorts of relationships and potential conflicts exist in that space, but unlike in the financial sector, there's no law requiring the disclosure of these facts.
So you are left to trust what......the firm's reputation? Your gut instinct? Your bank's approval list?
How can you really know that there is no conflict of interest?
I've seen consulting firms grow large by taking advantage of what's done in the dark, and you may have seen it too.
Like the fee based financial advisers, the key to eliminating all real and perceived conflicts of interest is in the business model. Instead of inherent conflict of interest, there should be an inherent absence of such conflicts. If your consultant can't convince you that a conflict of interest is impossible, than guess what? It's possible.
Our business model makes conflict of interest truly impossible. To find out how we are truly independent and why that's good for your customers and your institution, click here.
Any time you can do business with someone who is truly independent, you have a huge advantage built right in - and that should always give you - and your customers - a great deal of confidence.
Order your EZ Screen now.
Order your EZ Screen now.
