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Client Relationship & Service
The benefits of having a niche and an advisory board, with Ray Evans

19 MIN PODCAST

In an industry where everyone is looking for a client niche, Ray Evans of Pegasus Capital Management in Kansas City, Kansas, may have found one where others weren’t looking. He and his team of six associates manage just over $470 million, working with clients in the construction industry. 


Evans has much to say, so we broke this interview into two parts. In this episode, you’ll hear all about Evan’s niche focus in construction, which happened almost by accident but has led to a large clientele of small-business owners. 


We'll also dig into Evans’ advisory board, a group of fellow business leaders who meet quarterly to counsel Evans and each other. He’ll explain how he set it up, and how you can gain the benefits of an advisory board in your own practice.


Finding an accidental niche


“I'd love to say it was this super-strategic plan that I put together years ago, but that's not quite accurate,” Evans says of his focus on working with small-business owners and specifically with contractors and clients in construction. “It was by almost total accident.” 


It began decades ago, with two strong client relationships: “One of them was someone who was associated with a trade group in the state of Missouri. So they were able to involve me in a variety of different investment committee-type activities within that organization.” Evans has continued to serve on this committee through the years, getting to know contractors, architects and engineers in the group. The other important relationship was with an architect, who has helped Evans get to know more people in stadium and athletic facility construction. These connections provided introductions to contractors and related business owners.  


“In general, you sort of realize who you work well with,” Evans says. “Early on, I made so many mistakes. I was trying super hard to get in with surgeons and these really precise niches of high net worth folks that perhaps were a) difficult to get to, and b) were not necessarily relatively quick decision-makers in terms of whether they want to work with you or not.”


Contractors are easy to get along with and work with, and they tend to be fast decision-makers, he says. “You kind of get to know early on whether you're making progress,” he says. They’re also fun to hang out with. 


“And they value relationships.” Evans admits he is not great at asking for referrals. But because contractors also depend on referrals in their business, they make it easy. “They're usually great about introducing you,” he says.


Finally, because construction is a big industry with many other related businesses, a focus on contractors provides a lot of room for growth.


Evans also credits his growth to the robust planning platform that has evolved with his firm over 25 years. “In the early years, I was very much just an investment guy,” he says. “I really needed to sharpen my sword from a planning standpoint.” Today, he has the CFP and Accredited Investment Fiduciary designations, and takes an integrated team approach to planning. “The younger planner I work with is really strong from a planning standpoint. He really runs with it, can illustrate it and has that handled,” Evans says. “It's a great way to impress upon [clients] that the firm is not dependent on me. We've got other talent here.”


How to build an advisory board


Another thing that Evans built into his practice is an advisory board, made up of business owners who meet quarterly to discuss ideas. It was advice from his father that gave him the idea. “He was talking about how guys like himself are really complimented when a younger person asked for help or asked for advice.” Evans recognized the potential of harnessing the wisdom of local business leaders to help grow his own business. 


It started in the ‘90s with six people, an assortment of corporate-world buddies and clients whose opinions he valued. “I knew they knew me well enough to shoot straight,” Evans says. The goal was to talk about ideas, but he admits that they initially spent more time talking about Royals baseball or Chiefs football than business. 


As Evans’ firm matured, so did the board, growing to eight members in the first few years, and to about 20 today. Members come from different walks of life. About half are clients. Connections in local corporations offer advice about areas such as technology, human resources or innovation. Evans even found some strategic-thinking members while serving on the board of a local high school. But there are few financial professionals in the bunch. “I've only got a couple people from the industry at any one time,” Evans says. “Because I really kind of want to hear from the tool and die guys and these other guys, how they do what they do, and what they think they're seeing.” 


The format is typically a 90-minute lunch in the office or a local country club, he says. Once a year, the lunch is held at a rising Kansas City business. “Basically, a business that, you know, you're reading a lot about in the paper, that’s obviously doing great things and is on a growth path.” The group invites them to host the meeting and do a presentation on the company and why it’s growing. Businesses are usually eager to host and get the ear of established local professionals, Evans says.


Within the meeting itself, Evans spends about half the time discussing his firm’s performance numbers and goals for the year, including any challenges in the business. “I try to make sure that we don't spend too much time on my stuff,” he says. Instead, he gives each member of the group a few minutes to share trends they are seeing as business owners or consumers. “That's by far the most valuable part.” 


During the course of the year, Evans has a one-on-one conversation with each board member, which allows him to cover more ground on business specifics. “I find that they are much more likely to give me feedback and advice in that one-on-one setting than they are in the big group.” 


An evolving marketing strategy


The marketing strategy at Evans’ firm is also evolving. “We used to cold-call, we used to do seminars and all of that kind of stuff as we were building the business. We are much more targeted now,” he says. The firm has an annual marketing calendar, with different levels of communication based on client segmentation. “We do it fairly simply. We have an A-, B- and a C-type client, and they get certain levels of communication and get invited to certain events.” 


Even during the pandemic, the firm continues to host monthly lunch-hour events. “We try to make some of it work, some of it fun,” he says. For example, they invite local sports reporters in March for a March Madness college basketball-themed event. 


“We're actually kind of surprised at the turnout that we're having for the virtual events,” he says. “We’ll usually Grubhub them lunch … send them a gift card. It's not quite the same as being in the same room and maybe having a rubber-chicken meal. But it is still an opportunity to gather with people and show them that you're interested.”


Find part two of our conversation, Better practice management and productivity, with Ray Evans, for more on how he uses business planning, technology and standard operating procedures to scale his practice and save valuable time.




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