As the chart below clearly shows, in the Australian advisory marketplace, many fail to plan.
A business plan per se is not that important. The beautifully scripted 100 plus-page document that gathers dust on a book shelf is of little use to any business. What matters is having a plan for your business. There are a few fundamentals that remain consistent across most successful advisory practices. First and foremost, they have a plan for their business. Secondly, the plan addresses four key questions discussed below.
How is my business placed today?
Be brutally honest. Test your view of your businesses strengths and weaknesses with others not working in the business, especially your “A” class or best clients. What do they really think about your practice?
Also, consider the external market: what opportunities and threats does it pose? It can be hard for those in small businesses to get a handle on these issues. However, reading industry media, attending conferences and other industry events and utilising your PD days to share ideas and learn from your colleagues will all help to gain a broader understanding of your business environment.
Where do I want to be?
Successful planning begins with a strategic view. It is very hard to have a 12-month plan in place without having first formed a view of the bigger picture and longer term outlook for your business. Ensure that you also consider your personal goals; after all, business is just one part of your life.
How am I going to get there?
What are the 12-month objectives of your practice and what will be done in the next year to ensure you remain on track to achieve your longer term goals? These objectives need to be clearly documented and understood by everyone in your business. They need to be quantifiable and measurable and, while challenging, they also should be viable and achievable. A specific person needs to be directly responsible for each task, with an agreed timeframe for completion.
Am I on track?
The final piece in the planning puzzle is to conduct regular ‘progress to plan’ meetings. These should be at least quarterly, but monthly is even better.
Building a plan for your business isn’t rocket science, but many businesses don’t do it very well. As our research shows, however, those who do invest time and effort into building a plan for their business earn, on average, significantly higher profits than those who don’t.
As we approach the end of the year and our thoughts begin to turn to 2008 and beyond, perhaps it is worth considering writing down what you want to achieve next year and how you think you might get it?
Why does business planning fail?
• A lack of genuine commitment to the outcome and the process of achieving it.
• Doing the plan for the wrong reason, maybe to appease your dealer or bank manager – but not for your business.
• Unclear, unrealistic or immeasurable objectives.
• Filing the plan away after it is completed – no regular review process in place.
• The number one reason why business planning fails: poor implementation.