Video directed by RJ McHatton of Inventive Productions, editing by Tyler Griffin, Produced by Bill Maxwell.

Mixing Business With Pleasure

It is not hard to understand the appeal of entrepreneurs to wealth managers, especially those owned by large banks, the business whizzes of today or a decent enough proportion of them at least will be the multimillionaires of tomorrow. And not only will they need help managing that wealth, they may also require commercial banking services for their companies. If those companies get big enough, they might even be persuaded to pay for some expensive investment-banking advice.

But does it make sense for the entrepreneurs themselves? Are there merits in having your personal wealth management and business banking handled under one roof or should you look, as with your investment portfolio, to diversify? An increasing number of successful entrepreneurs are making a conscious decision to keep their personal and business banking separate, despite the best efforts of private banks to convince them otherwise.

Wealth managers argue that they can give the best advice when they have a comprehensive overview of a person's wealth. For many entrepreneurs, much of that wealth especially in the early stages of their careers will be tied up in the companies they own. By handling both the corporate and private-banking needs of an individual, wealth managers will be able to better provide tax advice, arrange favorable rates for asset-backed lending, suggest coinvestment opportunities and tailor corporate-finance services.

Most importantly, they can manage the process of turning a company into cash when entrepreneurs decide to sell their businesses. Rory Gilbert, managing director and head of UK high net worth, U.K. & Ireland Private Bank at Barclays BCS -0.27% Wealth, says: "Entrepreneurs find it more beneficial to bank with a wealth manager that can help their business grow, advise on the business exit process, and assist after the exit.

"Specifically, wealth mangers can offer those pre-exit entrepreneurs with many of the services that we provide to our high-net-worth clients. Typically, we will also work with them as they go through the exit process to ensure that their personal wealth is maximized."

Ronnie Ludwig, a partner at the private client specialist accountancy firm Saffery Champness, also believes there are sound reasons for entrepreneurs to have all their financial affairs under one roof. "It can be useful for one set of advisers to have an overview of all of their clients' affairs so that they can take a cohesive approach. This can cut down on the time it takes to arrange borrowings, negotiate rates and charges."

The success of this argument varies in different countries. In Germany home to more family-run businesses than anywhere else in Europe private banks like Hauck & Aufhäuser, M.M. Warburg & Co. and Berenberg Bank have built up strong relationships with Germany'sMittelstand small and medium sized companies through their corporate-finance departments. These banks also provide portfolio investment opportunities to those companies' owners through their wealth-management arms.

In the Middle East, the lines between family, corporate and even sovereign wealth are blurred to the point of being almost meaningless. Credit Suisse has been successful in using the relationships it has developed with wealth-management clients to win fat investment banking fees.

But these regions appear to be the exceptions that prove the rule. Wealthy entrepreneurs and business owners in much of the rest of Europe are, on the whole, less clear on the benefits of one stop banking. Michael Maslinski, a former private banker who now runs his own consultancy advising both wealth managers and wealthy families, says: "The further you go up the wealth scale, the more you will see multi banking and wealth management relationships. The very wealthy are reluctant to give over all their financial affairs to one bank." Many wealthy business owners believe it is better to pay for specialist advice in all the different areas they need it than to have one firm acting as a jack of all trades.

Some of the big universal banks have in the past talked about "private investment banking" for entrepreneurs. But Mr. Maslinski says that some clients have been skeptical of the concept, describing it as "a sausage machine" through which they were sold investment banking products. "In many cases, very little thought went in to the end product," he adds. "The idea seemed good, but in reality there was often a mismatch between the investment bank and the corporate and wealth interests of the client."

This tension between the types of services that banks were providing to entrepreneurs, along with the high-profile difficulties faced by investment banks during the credit crunch, has convinced some clients to divide their financial affairs. As a result, some banks have retained the corporate banking work but lost the original wealth management relationships. Many entrepreneurs, along with other wealth-management clients, have opted to give their investment portfolios to independent asset managers and multi family offices that had no connection to the big banking brands.

Graham Harvey, a director at the consultancy Scorpio Partnership, says multi family offices in particular have been able to take advantage. He says that 5% of the assets held by the bank owned wealth managers in Europe has flowed into the portfolios of independent advisers in the last few years.

IJ Partners, which launched last year in Geneva, is one of the independent asset managers that claim to be winning investment portfolios from the universal banks. Theodore Margellos, managing partner at the firm and an entrepreneur himself, having founded a private equity firm, says: "Let [entrepreneurs] use corporate finance departments of the big banks. But when it comes to portfolio management and direct investment opportunities, smaller boutiques can often perform these services better."

Daniel Freeman, managing director of London & Capital, an independent asset manager, says that entrepreneurs want to have their investment portfolios managed independently of their business interests because of concerns over confidentiality. He says: "There is no guarantee of Chinese walls between departments at banks. Information leaks can happen."

As so often with matters financial it comes down to an issue of trust. With many of the largest bank brands tarnished by the credit crunch only 17% of wealthy continental Europeans in Scorpio Partnership's recent survey, The Future Wealth Report, say they would trust their adviser to help make a financial decision.

Those banks that are perceived to have weathered the credit crunch have had better luck persuading business owners to give them their corporate business on top of their wealth-management advice. Credit Suisse Group, which owns one of the world's largest wealth managers, is one such bank. From the two-year period from the beginning of 2008 the worst years of the credit crisis the Swiss bank scooped up 72 billion Swiss francs ($68 billion) of new business, more assets than any other wealth manager.

Credit Suisse says its "one bank" initiative, which integrates banking and wealth management services for entrepreneurial clients, has been behind much of its success. Ian Dembinski, head of ultra-high net worth clients for Credit Suisse in the U.K., says that the wealth management arm does not push investment-banking products.

JP Morgan, another of the bigger names to have emerged relatively unscathed from the credit crunch, claims to have nurtured good relations with business owners throughout Europe because of the range of services it offers.

Entrepreneurs very much like everything under one roof once trust is established," says Kate Murphy, head of family businesses at JP Morgan Private Bank in the U.K. and a former entrepreneur herself. "Banks like us can provide efficiencies for all parts of the financial affairs of entrepreneurs.

Innovation: The Entrepreneur’s Key to Succes

When it comes to creating wealth, no one does it better than an Entrepreneur and Small Business, and in tumultuous economic times Small Business will lead the way to the rebirth of a dynamic and thriving economy, and to be an effective company, Peter Drucker correctly observed the company must always innovate, and if it failed to perform the task of innovation over time it would fail to be successful, and yet most executives are marginally satisfied if at all with their businesses current levels of innovation, and of course many are disappointed with the level of improvements that result from their efforts.

In the course of developing innovative ideas entrepreneurs need to be careful that they are just innovating for the mere sake of innovating, since this never results in very profitable endeavors, or it might seem that actually current levels of innovation aren’t really innovations, just only small incremental improvements on existing ideas, products and services.

Profitable innovation happens most frequently within well defined parameters of problem solving, and without these parameters the innovation would simply be about creating just new ideas, and yet we must realize that innovation, or at least commercially successful innovation is actually more 

than that, it is about creating new value, and with the new value the potential for the creation of new wealth.

In taking the innovation one step beyond the creation of new technologies one has to determine why many innovative creations don’t work right away, but sometimes take many years and multiple efforts before success is achieved, and when we focus on what was missing in the process, many times it’s as simple as getting the idea to spread and become viral to a point where the innovation becomes very successful.

This is true many times when entrepreneurs are able to create networks that combine different innovations that together are able to fully exploit results, and therefore become successful as a group called a value network, or a value chain, which is usually taken for granted or purely neglected by many managers and executives, but changes here can result in profitable, innovative solutions for both entrepreneurial organizations and their customers.

A businesses value network is the collection of business functions, systems, and processes that are designed to deliver the greatest value to its customers, and the value network becomes a critical mechanism for the process of innovation, and also becomes a key part of the business strategy because it creates systems that include the creation of a natural barrier to entry for competitors, make the business more competitive in the marketplace, insurer profits and good economies, and most importantly insulates the company from losses in a bad market similar to the current state of the global economy.

Instead of building a value network, many companies look to marketing its traditional 4P’s (Product, Price, Place, Promotion) to navigate the through hard times or to squeak out an extra dollar of profit, and while the 4P’s are useful tool, they frequently do not go far enough, so creating a value network will serve much the same basic function as the 4P’s, but actually takes it several steps beyond, and the good news is the 4P’s can be fairly easy to replicate, however replicating systems and processes are much more complex, as such, the value network becomes intertwined with overall corporate strategies.

Strategy is a combination of the many things entrepreneurs do, for example, for Wal-Mart or Southwest Airlines to compete on price, all of their processes that to work together and all the small details have to exist to support their one driving goal, which is to provide the lowest prices for their many customers, and of the features of these two companies, part of their 4P’s including the warehouse is, and the airplanes, are all fairly easy to replicate. Yet, the way their processes, capabilities, and personnel integrate and execute is 

what makes each of these extraordinary companies unique and very successful, even in the worst of economic environments like the current global economy, as execution of the processes redefined for maximum efficiencies even at the smallest detail tasks, by highly trained managers and personnel committed to the one single end result of lowest prices to many loyal customers, and in return the most valuable by-product of the team’s finely tuned efforts is the maximum effect on the bottom line profit, and the creation of wealth.

Finally, a clear understanding of innovations and how when taken in and of themselves they do not function to create new strategies for entrepreneurial success, but when combined with other innovative ideas and processes they create success and wealth beyond anything that could be accomplished with the innovation by itself.

3 Items that Entrepreneurs can Use to Master Communication in Leadership

I started learning about business from home. Fortunately for me, growing up in business environment has taught me things that I could not learn from school. The following is a special guest article from Entrepreneurs.my highlighting the 3 Items that the author used to trigger his inspirations to Become and Sustain his Passion to Learn Entrepreneurship and Become an Entrepreneur Today. 

It has not been easy though. It took me a while to look at how lucky I have been. Growing up, all I wanted was to have normal life. Normal life to me back when I was a little boy was not a lot. I grew up in a shop lot. 

Normal was to have a garden or place I can run around. Growing up while I was a boy, I witnessed things that probably not a lot of children my age see. I started seeing the meaning of hard work. I used to fall asleep on the couch waiting for my parents to clean up and close down the business. That would be like 11pm or midnight. I used to hate the nights when my parents had a lot of customers. I didn’t know that it was a good thing. 

Looking back now, I think I am quite lucky. All the “abnormal” childhood I had prepared me to be the person I am today. One of the thing I learned when I was younger was communication. I grew up as the boy in the corner with a book and thick square glasses. So communication was probably one of the things that I did not quite excel in. Then one day, I learned from my father that there are two types of communication. One is external and one is internal. 

In business at the moment, I think one of the most important things to master as an entrepreneur. Not only must an entrepreneur be able to know how to communicate with people around him. He must also know how to communicate with himself. The things that we tell ourselves are one of the most important things in life. 

I believe most people do this subconsciously. The problem with that would be that we don’t really know what we tell ourselves. Are the things that we tell ourselves destructive or constructive? Does it make us feel more motivated or does it actually demotivate us. 

Too many people talk about the best ways to communicate with the customer, or with the co-founders or with the investors. I read many websites talking about how a leader must be a good communicator. I believe to be a good leader the one of the most important thing is to learn how to lead by example. 

This is where internal communication becomes crucial. Although we don’t realize it, I learned that we can start to train ourselves to be aware of it. Once we are aware of the things that we tell ourselves then we can slowly choose and substitute it with things that are helping ourselves be more constructive and motivated. 

So here are things that I do to help my internal communication: 

Books 

News 

Songs 

Books help me learn the words that successful people use. I usually read them before the night ends and early in the morning. I don’t use bookmark so that I can go through the pages and the words again. 

I select the news that I want to read. We now have the luxury of being able to select things that we read. So it is not all about crime and robbery every day. The only section I read in the newspaper is probably the comic section. 

Being a music fan, I used to sleep with the radio on. I have stopped doing that just for a simple reason that when I sleep it is easier for things to go to my subconscious and I have no idea what kind of songs are being played in the radio. 

These are just few basic things that I do, then again live is all about choices. Why else would we want to become entrepreneurs if not because of the luxury of being able to choose what we read and see and listen.