Most financial advisers know that having a business plan would help them stay on target and increase their opportunities for success. But knowing and doing are different. So let me offer a simple blueprint for a four-step business plan that will make the doing much less onerous.
Step one: Vision
Business plan experts argue passionately about the difference between a vision and a mission, and exactly what to include in each. I say, don’t sweat it. Stick with a set of words that works for you.
A personal vision statement is something that grounds you in who you are. It guides decisions, actions and expectations. When you create a personal vision statement, even if you choose not to include it in material you show the public, it reminds you of what is most important to you.
A personal vision has nothing to do with business. An example: to maximize my time on earth by constantly growing, generously sharing and inspiring or being inspired daily, to genuinely make a difference in the lives of others and to focus equally on working and playing hard.
A business vision, on the other hand, builds on your personal vision and carries your core beliefs into the business realm. It’s important to have a strong business vision that carries your core beliefs forward. Consider this one: to create customers for life among those clients who value our advice and with whom we have an integral relationship.
Think of something along these lines and create your own business vision statement.
Step two: Mission
A mission statement answers these questions: What does your firm do? For whom do you do it? How do you do it? What deliverables do you provide? What do you charge for the deliverables?
Be brief, but be thorough and specific in your answers. A clear and comprehensive mission statement pays rewards in better hiring, more-effective marketing and more-productive practice management.
Step three: Strategy
For a one- to two-page business plan, strategy statements describe how you will move from where you are now to where you want your business to be.
When completing this section, be forward-looking and optimistic but not utopian. As Sir Winston Churchill once said, “It is always wise to look ahead but difficult to look further than you can see.”
A three-year time frame works for most advisers. Using bullet points rather than text to highlight your plans will keep you focused without bogging you down in analysis.
Here are some typical strategy elements: transition to nearly all fees, focus on superaffluent clients, decrease the number of clients with whom the firm works, invest profits into company growth, find a junior successor, open another office, brand the company in the community, build a mature ensemble or focus on the orthopedist niche.
Although strategy statements shouldn’t go into depth, it’s important that they be carefully selected.
Step four: Goals
As opposed to strategy, goals must be specific and measurable. Five to seven goals a year are sufficient if they address what’s most critical to the firm. Consequently, each goal can be broken down into a laundry list of specific tasks. At a minimum, each goal should be SMART — specific, measurable, attainable, realistic and time-bounded.
Here are a few examples that translate desires into SMART goals:
• Goal — Sell more long-term care. How — by documenting a conversation about the importance of long-term-care insurance with 40 clients by Oct. 15.
• Goal — Implement a tiered-service matrix. How — by listing the number of meetings, proactive phone calls, e-mails and letters to be received by A, B and C clients, respectively, per year by Oct. 30.
• Goal — Prune my book. How — Transition five clients to a new adviser by Nov. 1.
Final thoughts
Putting your firm’s name and the completion date on the plan increases your accountability. Involve others in planning to the extent appropriate.
One effective way to use your plan is to schedule a meeting with yourself every month to review progress. If your goals are SMART, you will be able to tell where you are with implementation.
You may find that the simple act of reading the plan weekly helps you filter out the distractions and stay focused on the things that matter most. The greater the focus on the plan, the greater its success.
Once you get into the habit, you’ll find that your planning process improves each year.
Joni Youngwirth is the vice president of practice management at Commonwealth Financial Network in Waltham, Mass.
