Creating a Business Plan to Grow Your Practice

Hello Advisors....

I'm honored to be your expert for the next few weeks. Here, I hope to address your issues regarding planning and executing your plan.

Ok, I see you yawning!

Planning doesn't have to be a chore. In fact it can be an adventure you take with your team.

Planning doesn't have to be done on 20 pages that get placed on a shelf to be dusted from time to time. Believe me, you can create a living breathing plan to help you keep focused on your goals and accountable to yourself (and others) on just one-page.

What planning process have you found the most useful and why? Have you tried the one-page planning(r) methodolgy?

What questions do you have on....

assessing where you are now...
creating a vision or mission statement...
designing SMART objectives and strategies that work to attract your ideal clients...
crafting an action plan or performance management system...

I look forward to your insights about planning and of course post your questions here.

Hi Maria, Thanks for hosting!

Should the document be "living breathing?" In the past, I have heard consultants say you need to create an original that way you can go back and compare you changes,if any, to the original to see the progresssion. Maybe you could just clarify that point a little further.

Also, whats the best approach to take when you have multiple type A, entrepreneur types who all have different visions for the firm, to get a 1 page business plan developed? Thanks.

Caleb Brown

Calab

Thanks for starting us off.

As far as the “living breathing” plan…

One of the great technologies we have to use in our planning process is to use Word or other such document to keep a copy of the original.

That said, there are many reasons why creating a "living breathing" document is important. I find that while many know they "should" create a plan there are many reasons it never gets written. One of those reasons is “the business will change in the next 12-months” so why create something for a business that will keep changing.

Yet, no matter how long someone has been “in business” or “in career”, the first time a plan is created it's usual that many changes will take place during the year. You know, something interesting happens when you take what's in your head and put it down on paper – it frees up a lot of space for better ideas to come through.

A plan may also change because as you execute your strategies you will learn, grow and analyze what you created. You’ll want to change any strategy that isn’t bringing you the results you thought it would by tweaking the strategy or if that doesn’t work, get rid of it and replace it with something much better.

Changing who you work with -- your ideal clients -- may change some of your marketing strategies. And your plan may change because "something new" has come along and it's a much better strategy then one of the strategies you had in your plan.

Here's one of the rules I give my clients in regards to changing their plan. We work together to assure that their plan has in it the key-- most critical -- initiatives in it. So the only way they can add a new strategy is IF they’re willing to take a strategy away. This way, you assure yourself that you're not just changing your plan for the sake of changing it -- you're changing it to add something much better.

Your question brings up a great point about watching your progress. But before I get into the progression part, let me go back one or two steps.

Here are some planning steps

Assess where you are right now

Create your plan

Execute what you created

Monitor what you created and

Tweak it where necessary

Create a "lessons learned" form for each completed action plan

Now back to your question about progress. The best way to monitor your progress is through the use of a performance management system -- one you're willing to use daily and update at least weekly!

What you want to monitor in a one-page planning process are your objectives (goals) and action plans. Here are some options:

a) create a paper process.

b) use Excel spreadsheet

c) see if your company already has a program they recommend or use

d) use one of the many dashboard or project managment programs available via the Internet.

If you aren't using a monitoring system or don't like the one you're using I have a list of some options so you can see what's available. Go to http://www.theresourcequeen.com/new/favorites/systemization.html

It's in a password protected area of one of my websites... to get in... use the codes business and then expert (words in lower case)

Personally, I recommend using secure technology for this purpose because when you start anything with a blank page, it takes so much longer to “get it done” -- if it gets done at all.

And if you use a secure online system you can easily review your team plans and they can review plans of others, too. That's easily accomplished by setting the administrative permissions the way that will be the most helpful to your firm.

Additionally, I find that when a firm uses an online system it actually changes the dynamics of in-person meetings -- for the better, of course. Gone is the question "where are you in regards to "x" " because you and whomever else needs to know has been to the website and already knows the answer to that question. The meeting conversation become more like “how can we help you get to the next level of “x”.

Onto your next question...

"What’s the best approach to take when you have multiple type A, entrepreneur types who all have different visions for the firm, to get a 1 page business plan developed?"

You bring up one of the best reasons for the owner of a firm or department to create a plan -- you want EVERYONE you bring into your company to tap onto YOUR vision for your firm!

Here’s a true story -- I recently had a business development manger at a credit union tell me that he was having a difficult time being taken serious and trusted by “x” type of prospect – one he really wanted to work with. After a discussion on the strategies he’d already tried -- I told him that the best strategy would be to go work for a different company – one whose ideal clients were his ideal client.

Having someone tap into your vision is easier to do when you bring someone on board. At the interview discuss where your firm is going , paying particular attention to the person's body language and questions.

Show them about your planning and performance management system -- one they have to get on board with.

Consdier showing them your firm plan or the parts of it you feel comfortable showing -- and ask questions like "where do you see yourself 5 and 10 years from now" , “what type of clients do you enjoy working with the most” etc. -- all to see if their vision for their life is a good match for your firm, etc. Now this is a bit harder to do when you already have everyone in place -- but still doable.

If your staff and sales force is already in place, one way this "could look" for a small Advisory firm is..

.. the CEO creates a solid draft of a plan for the firm

.. team members/staff etc. create a plan for their positions

.. boss approves each staff plan

.. boss finalizes their company plan

If you are bringing on new members consider using the planning methodology to create a plan for their position instead of or in addition to a job description and start them off on the "right" footing.

Maria,
I see a lot of financial planning firm owners that appear to struggle with this. At the most basic level, it just seems that many don't really have the faith that doing this work will positively impact their businesses. Instead, there seems to be a common view that discussions like this are too abstract, too ephemeral, and don't lead enough to directly actionable steps to implement in the business. Some also criticize that business growth (especially for "smaller" planning firms) itself is so uncertain, it's just not worth taking the time and effort to build in plans for growth that will assuredly end out being faster or slower than what was assumed for the business plan.

How do you address the concerns of the skeptical business owner about investing the time and energy in the process in the first place? And how do you relate future success back to the plan to reinforce the behavior?

Thanks,
- Michael Kitces
Publisher, The Kitces Report, www.kitces.com
Blogger, Nerd's Eye View, www.kitces.com/blog

The irony is that what “I” hear you describing are planners or advisors not willing to walking their talk.

I guess you can talk to prospects about the importance of planning without having your own ducks in a row, but I bet it would be much better to talk “planning” and have plans -- career/business plan, marketing plan, succession plan, financial plan, etc. done first.

MMMM ;)

And of course you are right about the skepticism of in regards to investing the time, energy and even dare I say -- $$$$ it costs to hire a planning professional. I wish it was differently, heck it would make my business easier – but the truth is the truth. Most people want instant gratification, no matter what the cost -- and planning just “ain’t it”.

Over the years, I’ve gathered a l long list of “excuses” I’ve heard --- from my business will change, to planning is for people with no life, etc. etc. etc. Heck, I have my own list of why it took me two years to find a plan I was willing to do even though I taught planning classes at a local college! After all – like most in the services sector, “I didn’t need any financing to start my business.”

So I truly understand.

What changes so that a person to finally gets that it’s time to sit down and create a plan? Sometimes their boss insists they make some sort of change – or else. Other times – for whatever reasons -- they’ve been involved in a downsizing or haven’t moved over in a merger and they want to take a pro-active stand and plan for success.

Ultimately, it’s pain is what leads someone to give into taking the time out to plan. When you don’t like the results you’re getting, it’s time to do what you’ve been putting off.

Personally, I know that everyone could use a financial plan. Just TRY to convince everyone!

Unless someone has been an executive in corporate America, or previously created a plan and reached a big goal faster and easier than they thought possible, most folks don’t get the value of planning. Not the time savings, expense savings, nor the money producing results of planning.

Few professionals come to me with check in hand and say I want to create a plan. Of those who do they do so by referral, through my newsletter subscription, reading an article I’ve written, reading a book on the topic, or from a speaking engagement – sound familiar? It is. Planning -- whether it be business planning or financial planning… is planning!

What I usually hear someone say is “I desperately need accountability” “I just have to start focusing because I’m all over the place”. “Business can’t be this hard”. “I just don’t get how come I’m not getting more affluent clients” Often I’m told (only half jokingly) that their spouse is going to divorce them if they don’t start spending quality time at home.

Other things I hear…

Their business/marketing results fall short of their expectations.
Inconsistent results with the advisor left scratching their heads wonderings how come it works -- some times.
Company pressures.
Feeling frustrated, overwhelmed, or as if they’re spinning their wheels
Putting out fires all the time.
Management (or Administrative) Team problems – or no team!
Knowing they need to learn how to delegate
Not sure whom to hire and if those hires should be full time, part time, employees/accountants
Wanting to market smarter because they’re tired of doing it their way.
They’re loosing their passion in doing what they’re doing even though it’s what they always wanted to do or loved doing.
What used to work just isn’t working and they don’t know what to do.
I need an exit or succession strategy before it's too late.

Another issue your post mentions is that planning could be viewed as “abstract, too ephemeral, and doesn’t lead to direct action”

Much of the old way of planning gets you more meetings and more questions, therefore more planning. It’s a vicious cycle. Heck, I’ve been at some of those meetings myself! ERRRR

The old way of planning takes months and the end result – it’s a dust collector.

Here is what the new way could look like for an Advisor.

FIRST:

Assess where you are. 30 minutes or less. Use the first assessment in the download – the Best Practices assessment at http://www.ElevatingYourBusiness.com/documents/BusinessSuccessAssessments.pdf

CREATE YOUR PLAN

You create a very concise document that includes ONLY the key initiatives that will get you where you want to go -- using software and templates. No blank pages to stare at or through.

Business plan parts…

vision… (1 sentence)

mission… (2 to 8 words)

Mission plan parts…

objectives… (no more than 9)

strategies,, (no more than 9)

actions… (no more than 9)

Finalizing a one-page plan® has taken between 5 to 12 hours depending on a person’s business knowledge (but that’s hours, not weeks). A plan may need additional approval from within the firm and possibly a little more tweaking after that.

Add 4 more hours to create an ideal client profile because you can’t market to a client you don’t know. (well you can, but we get back to that spinning your wheels scenario)

SET YOURSELF UP FOR SUCCESS

Create a performance management process, dashboard, “whatever” to monitor your objectives and action plans. Make it work for you by creating it on paper, or in Excel, or use an online system or a mixture of those. Whatever will help you accomplish this task, do. That’s about 3 more hours or work to set yourself up for success.

GET YOUR REAR IN GEAR

Take what you created in your management process, and start “to doing” it.

MONITOR YOUR RESULTS

Before you close down your shop for the weekend, update your monitoring system. This is where you can relate your successes to your actions, and monitoring is usually motivating. For those times when you realize that something you’re doing isn’t working right, you go back to what you created and tweak it so that it is motivating the next time around.

GET YOURSELF ACCOUNTABITY

This is where monthly accountability sessions come in handy.

Thoughts?

Maria,

I once heard it said that if you don't create a written business plan, you have by default accepted this unwritten business plan: "Work hard. Make as much money as you can. Do it again next year. Hope for the best."

Unfortunately, that means you let the business happen to you rather than make things happen in your business. You abdicate responsibility for the outcome. (Actually, that works well for those suffering from low self-esteem. "I didn't do as well as I might. But, I had no control so it's not my fault." But this goes off-topic.)

Are you suggesting that we review the business plan every week? Or, do we review the tracking system we created, pulling the business plan out for adjustment when our results stray from expectations? How long should we accept meaningful variance from expectations before we make a change?

David,

I enjoyed reading your "unwritten" business plan scenario. I'd never considered that some stay in "victim role" when they don't write their plans! That's a really interesting excuse to add to my list of "reasons why I havne't created my plan yet" list.

Based on the comments from clients creating a plan and then executing it, dramatically raises a person's confidence level and then they raise the bar. It's difficult to stay in victim role AND be confident about your abilities at the same time! Thank you for that keen observation :)

Based on my experiences, everyone has a business and marketing plan. It's either a bunch of "stuff" running around inside a brain -- and every time you need to make a decision, you basically go swimming through a brain with lots of spaces for the bits of information you need and then try to get everything you need to make an informed decision.

OR it's written down in a formalized planning process OR it's in a dream board format. One multi-million dollar business owner has 6 white boards in her conference room -- always right there when she and her staff have meetings.
As for reviewing the business plan, yes, especially the first year I recommend it and the ideal client profile are reviewed each week. In fact, when my clients complete their plans, I send it to them in what I call the "no excuses" frame -- it has a stand to place on their desk AND it has a loop to hang up on the wall :) The ideal client profile, they also create on one page, and that get's hung up near their desk, too.

Why review it often? Well, when you create your first plan, it’s based on the information and work you do at the time. The objectives and strategies (for example) are THE most important elements that will help you become the most successful.

But as soon as it's created, a GIGANTIC amount of space becomes free in your brain :) And it's usual to hear and see things that "could" be part of your plan. And the way you determine if it belongs in your plan is this.... You look at your plan and see which objective or strategy you're willing to remove to put this MUCH BETTER item IN the plan.

If it's determined that this new "thing" is not worth putting in your plan right now, I recommend writing the idea down and putting it in a pentaflex folder labeled “ideas”. Then you don't have to remember it, it's somewhere filed where it belongs for now.

That said…

Once you create your plan its time to create two tracking systems, – basically a performance management system or scorecard or dash board – whatever you want to call it; it’s a system. You monitor each of your objectives (the one-page® process has you creating a maximum of 9 objectives … and also monitor each of your action plans and the “to do list” you created for each of them.

You then update your numbers and projects each Friday (my suggestion) before you leave for the weekend.

Because you’re watching it that closely, you’ll start noticing things that are working perfectly just the way they are… AND you’ll catch what isn’t working and more quickly adjust (change) what’s not working.

So once you create a plan using a process like the one-page plan® what you created becomes a living breathing plan.

AND…

What I find is that the first plan changes the most often because it’s user is much more focused on the key elements that will help them be successful and has to adjust the numbers (upwards) and add new tasks (because the tasks are completed earlier than the writer first thought)

Plans for subsequent years change less frequently unless something "big" happens within the company -- like it changes direction, is bought out, add new employees, etc. etc.