Business Planning Beyond the Numbers

It's the time of year to develop a 2016 business plan. Many advisors believe the business plan consists solely of revenue, new-client acquisition and acquiring new assets. But there is much more than just a few numbers.

Values are at the foundation

At the heart of every plan are your values. If you have never gone through a values exercise, I encourage you to do so. has an extensive list from which you can choose. Narrow the list to your top five. These values will be the foundation for decisions you make from here on out.

Next: Mission and vision

Once you have your foundation, you are in a much better position to develop your mission and vision statements. Refer to my article, Create Mission and Vision Statements That Drive Your Business.

Next up, the numbers

Once these foundational pieces are complete, develop the numbers portion of your business plan. Some advisors go with just a few numbers, such as those I noted in the introduction. Others go into much more detail: total revenue (broken down by investment management revenue, insurance revenue, planning fee revenue), number of new clients, number of high-value clients and the number of financial plans. Make sure your numbers are realistic, but challenging.

If you set your goal too high, you will subconsciously give up, thinking "there is no way I am going to hit that target."

If you set your goal too low, there is no driving force behind taking action. You assume you will reach your goal irrespective of what you do or don't do.

Aspects often forgotten

Once advisors get their numbers together, they think they are finished with business planning. Not so. This is where the plan truly begins – a plan to turn the goal into action items. Without action, a plan is just a document.

Now you decide what needs to occur in order for you to reach your goal.

Two areas to support your goal

When you begin to break down what needs to occur in order for you to reach your goal, focus on two major areas: marketing and team development.

Marketing itself can be broken down into two categories: client service and client acquisition

The best marketing activity you can engage in is to take exceptionally good care of your existing clients. If your client service model is in need of work, start there before heading down the path of client-acquisition activities.

If your clients don't feel you are referable, you are shooting yourself in the foot by dedicating resources to client acquisition. If new clients come into your less-than-stellar client-service model, they won’t refer you.

If your client-service model is in excellent shape, then focus on the client-acquisition side of the marketing umbrella.

Following the same path, there are two types of client acquisition activities: passive and active.

Passive marketing activities

Passive activities include sending out mass email newsletters or mailing mass marketing materials. You set something up to occur one time only or on a regular basis and passively wait for a response. There is nothing wrong with including passive activities in your marketing plan. However, passive activities alone won’t get you to your goal.

Active marketing activities

When people think of marketing, they most often think of active marketing. Examples of active marketing include conducting educational workshops and hosting fun events such as a wine tasting. Sometimes it may be appropriate to combine an educational event with a fun activity.

Attending networking events is an active-marketing activity, as long as you speak with people you aren't acquainted with and don't spend the whole event hanging out with a friend or colleague.

Getting involved in a charitable organization your client supports, or alternatively, getting them involved in an organization you support constitutes an active marketing activity. Read more on this in my article, Build Your Business by Being Charitable.

Researching who your clients are connected to on Linkedin and then speaking with them about how best to be introduced to someone you want to meet is an active-marketing activity.

Ultimately, you need to decide which activities you will engage in over the year and develop a list of action items to move each idea forward.

Staff-development plan

The second primary area of focus to help you reach your goal is your team. If you don't have team members and don't expect to have team members, you may skip this section.

For the rest of you, keep reading because this is an often-overlooked aspect of your business plan.

For a practice to be running at its best, everyone needs to be headed in the same direction. At the core, your team members’ values need to be aligned with your values. They don't have to be identical, but they do need to be aligned. In addition, their career goals should be in support of the practice goals.

Help or interfere

An important conversation for you to have with each team member is in regards to how the two of you help one another and how each of you may interfere with each other's progress.

Many advisors understand the importance of helping their team members improve their industry knowledge and offer opportunities for team members to learn and grow.

On the flip side, many advisors interrupt their staff multiple times throughout the day with non-emergency tasks. Instead of jotting down a reminder and saving these non-emergency tasks to discuss during a one-on-one meeting, the advisor drops the task at the foot of the team member when he thinks of it.

Don't let your lack of a better system put your staff in a position of lower efficiency.

Evaluations should never be a surprise

The best teams have constant open and honest communication. If something is bothering you about a team member, address it right away. Don't wait until their annual review to bring it up.

Generally, people want to do a good job. If they don't know they are underperforming, how can they improve?

Don't ever let an employee walk into a review and be blindsided.

Also, if an employee is doing a great job, let her know. Praise for a job well done can go a long way towards cementing the relationship. Since it can take up to six months for a new employee to be proficient at her job, it is cost effective to keep the good employees you have. Make sure they know they are appreciated. Be specific with your positive feedback.

Action items

As with the client-service and client-acquisition aspects of your business plan, the staff-development plan needs a list of action items to turn goals and plans into reality.

Each action item must have someone assigned to it and a due date. In order to conduct effective updates at staff meetings, some sort of tracking mechanism should be in place. This could be something as simple as a Word or Excel document, or it could be managed in your CRM system. Determine what will work best for the team and implement the strategy because, as I said at the beginning, without action items the business plan is just a beautiful document, nothing more.

Have a terrific 2016!

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