| 7 Steps to Creating a Make-It-Happen Business Plan | ||
| 7 Steps to Creating a Make-It-Happen Business Plan By Nicole O. Coulter | Oct. 27, 2006 Not into formal business planning? Don't see the benefit? Here's what you need to know to create the plan that attracts new business, not dust buildup. Sometimes business planning can seem like a colossal waste of time, not to mention trees. After all, you know what you want to accomplish. It's in your head. Why spend time writing it down on paper when many a business plan just winds up under a pile of unread articles in the back of a desk drawer? Well, for one thing,"winging it" leads to a lack of accountability not exactly a good long-term strategy for your business. And if you set no written goals, it's tough to measure your progress. Finally, you're in the business of helping people plan. Don't you want to practice what you preach? Advisor John Kuykendall in Lake City, Fla., does. "I never had a formal plan on paper. I always had one in my head," he explains. "I got to $25 million under fee based in four years without a plan. But I know that now I need a formal written plan to get to the next level and to make sure that I measure my performance and personal goals more accurately." "Writing a plan down acts as a contract for the business," observes Mary Lacey Gibson, CFP, a small-business coach and financial planner in San Juan Bautista, Calif. "It gives us something beyond all those ideas floating around in our heads to grab onto, and allows us to measure progress and test new ground." If you don't believe that, consider this testimony from a 14-year veteran. "In 14 years, there have only been two years that I haven't done a formal business plan," reports Ken Judd, who's with a national firm on the West Coast. "I thought I was too busy to plan, but those years were two of my least productive years. With a plan I stay more focused throughout the year and don't get to the last three months and wonder what happened. It is also easier for me to quantify my results." Make a new plan Creating an annual business plan isn't all that different from planning your daily activities. If you want to get an idea of what you're missing out on by failing to plan, think about one of those days when find yourself leaving the office late, feeling like the day got the better of you. Multiply that by 250 (the average number of working days in the year) and you may start to feel the urgency of the situation. Here are seven tips for getting started on your make-it-happen plan: 1. Start early and plan often. Think ahead to the hectic pace at the end of the fourth quarter. Are you going to have time to set realistic goals for your practice? "I give my brain enough time to work on the plan so I'm not rushed," explains Sue, a wirehouse advisor who starts planning in September and October. Other advisors like to tweak their plans over the holidays and continue to make adjustments year-round. 2. Review last year. Business planning gives you a great opportunity to review the past year's performance and assess the effectiveness of whatever approaches you have been taking to grow your business. When you have a plan from your previous year and track your results you have a benchmark for future performance. Michael McGregor, with a major firm in Waco, Texas, asks the following questions each year: * How many new accounts did I open this year? * What was the average size of my new clients' accounts? * How many came from referrals and how many from other methods of prospecting? * How many clients did I lose, and why did I lose them? * How can I improve on the processes? * How many new accounts/new assets will it take to reach my goals for next year? 3. Keep it simple. Remember, your plan doesn't need to be the great American novel. It just needs to outline the important facets of your business so you can stay focused. Consider the following six areas to address in a concise plan: * Mission statement. A basic mission statement expresses what you do and the kinds of clients you serve. For example, you might say, "I am the financial advisor of choice for entrepreneurs who have a need to set and manage complete financial plans." Even if you flesh it out more, your mission statement should not be more than one very short paragraph. * Business budget. Outline your projected revenues and expenses, and set goals for assets under management. Many FAs aim to increase assets and revenue by at least 15% to 20% per year. Rookies should aim to double production for the first two years, then shoot for 50% growth in years three and four. Veteran advisors often budget 20% of their net for marketing activities, and another 5% of net for professional development. * Time-management goals. Don't forget to schedule time to rejuvenate. Planning time off helps protect you against burnout. Vacations and "free days" allow you to recharge your battery. "Planning [personal time] allows me to keep balance in my life," Gibson says. "While I love my work, I value my personal life and time and jealously guard against work overtaking it." * Marketing plan. What marketing activities will you pursue next year? A quarterly newsletter? Client events? How will you get your name out into the community? "I am going to continue soliciting businesses door-to-door in 2007," reports Steve, a veteran advisor on the West Coast. Include ongoing efforts and special projects, like revamping your collateral materials. * Client service. What key client service initiatives will you implement next year? Examples include monthly birthday cards, account reviews, and performance monitoring. "We plan to develop better relationships with our clients in 2007 by increasing personalization and outbound phone calls," notes Bryan Sadoff in Milwaukee. "We also plan to increase touches with more informational mailings to clients on financial topics." * Strategic alliances. What activities will you pursue this year to strengthen relationships with professional allies? "We will be getting together once a month for breakfast with a financial services alliance group of attorneys, accountants, and insurance agents," reports veteran advisor John Burroughs in Santa Cruz, Calif. Regular meetings will strengthen your referral relationship with other professionals. 4. Set specific goals. In each of the above areas, whether your goals are quantitative or qualitative, make them as concrete as possible. Examples: * Get in front of four qualified prospects per month. * Make contact with three A clients each day. * Meet with one strategy ally per week. * Add at least two clients a month (24 per year) to my book of business. * Increase the percentage of new-clients-by-referral to 50% of my new business. * Boost my average account size to $300,000 by bringing in six million-dollar accounts. To make your goals focused and action-oriented, eliminate words like "more" and "better." Compare these vague advisor goals with focused versions. * Vague: Visit more clients face-to-face. Focused: I will visit each "A" client face-to-face at least once a quarter. * Vague: Do a better job on proposals. Focused: I will implement a new prospect interview technique in January and close at least 80% of my appointments. * Vague: Bring in more long-term-care insurance business. Focused: (1) Present at least one long-term-care proposal per month to qualified prospects. (2) Sell 10 long-term-care policies next year. 5. Get your team involved. People are more likely to be committed to goals they have helped to create. So, for example, involve your client associate in setting client service goals for the year. "I have found that there is a much stronger commitment to implementing a plan when it is written by those involved," says Gibson, a small-business coach and financial planner. Consider taking a one-day team retreat to work on business goals for the next year. 6. Make it personal. People often fail to achieve goals because they never become committed to them. One way to commit to your goals is to specify why a particular outcome is so important to you, and then to write that reason down as part of the goal. Take a look at the following examples of vague, unsupported goals contrasted with specific goals that include a clear motivation for commitment. * Unsupported: Redo our client management system. * Committed: (1) Research three contact managers and make a decision by the end of the first quarter. (2) Spend 30 minutes a day learning how to use new system. (3) Transfer old data to new system by the end of the second quarter. Why? So we can provide superior service, enjoy deeper relationships with our clients, and increase our referrals by 50%. * Unsupported: Find a niche market I can keep going back to for business. * Committed: (1) Starting in December, make a list of my hobbies, interests, and passions. (2) Identify groups of high-net-worth people who share my interests. (3) In 2007, host or attend one event per quarter that gets me in front of these prospects. Why? So I can double my revenues while serving a wealthy client base that shares my values. * Unsupported: Find a new professional staff member devoted to business development. * Committed:(1) Ask clients, existing staff, and colleagues for referrals to an individual qualified to make cold calls, follow up on seminars, research target markets, and handle prospect mailings. (2) Interview at least three candidates. (3) Make a hiring decision by March. Why? So I can double the amount of first appointments I meet with each week. 7. Monitor, monitor, monitor. The key to enacting a business plan, besides clarifying a vision and setting out a strategy, is to monitor and adjust the plans as you move through the year. Some advisors review their plans weekly in their team meetings, and others do it minimally say, once a quarter. "You can't just put it in a drawer and assume it will work," says veteran top advisor Norm Boone in San Francisco. "Employees and stakeholders need to know their role and what is expected of them. As things change, tactics and strategies may also need to change so that you keep making progress towards your goals. Sometimes goals change. You won't hit the goals just because you write them down (although it is better than doing anything). You need to work at it. The business plan tells you what to work at." |
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