As we move to start planning for yet another year, ask yourself this – do you have a documented business plan? That’s a question I ask at the start of my presentations to advisers around the world.

The response? Typically, only about a third of the audience has a documented plan in place and only half of those use it as a living, breathing document.

That’s a pity because, as in many other areas of life, whatever you want to achieve you are far less likely to succeed without a documented plan and one that you regularly monitor.

Think about this from your clients’ perspective. They all have written plans to reach their goals and it’s your job to monitor those plans to keep them on course.

Why is this important? Because I’ve found that where advice firms don’t have a living business plan, everyone can end up losing. The owners don’t have a sustainable business, they don’t have efficient processes, they don’t have motivated staff, and they are less likely to build the continuity and trust with clients on which great success is based.

So given the stakes, why is this so hard for advisers? Firstly, let’s admit. It is difficult. When you start asking yourself to come up with a big goal, the answers rarely fall into your lap. It’s a challenge to identify a goal that is big enough and that has real meaning.

Secondly, advisers sometimes shy away from planning because it reveals the enormity of the task ahead. Just setting the goal can reveal an almighty gap between where they are now and where they want to get to. This shock often leads to analysis paralysis – doing lots and achieving nothing.

Thirdly, you may need to make sacrifices. Getting real about a vision often means confronting the idea that you might have to let go of other goals. You end up confronting the reality that you really can’t do it all. So putting off planning can allow you to live under the illusion of the magic pudding.

In other words, I get it. There are lots of ready-made excuses and rationalisations to avoid putting in place a business plan.  But if you really want to make your business great, generate the lifestyle you want and the financial outcomes you long for, you are going to need to get cracking. So, let’s do it.

A plan on a page

In its simplest form, a business plan should help you answer three questions:

  1. Where are we now?
  2. Where do we want to get to?
  3. What actions are needed for us to get there?

Next, ask yourself these seven questions about your current state of affairs:

  1. Do you have a defined a goal, one you can clearly articulate and are fully committed to?
  2. Do you have a concrete, actionable plan to meet that goal?
  3. Is your plan written down in a comprehensive (and comprehensible) manner?
  4. Do you have a timetable? And a financial projection of some sort?
  5. Have you shared the plan with senior colleagues or, better yet, your entire team?
  6. Have you developed metrics that you use on a regular basis to measure progress toward your goal? Or asked another way, how are you keeping score?
  7. Are you satisfied with your progress?

Out of these seven questions, how many could you answer ‘yes’ to?

The initial practical outcomes from the plan should be the allocation of actions and accountabilities to individuals or sub-committees to complete certain tasks by specific dates.

If you’re not sure what a plan looks like, ask a colleague, peer, study group member, or licensee. It doesn’t need to be 60 or 70 pages like one of your SoAs. There is nothing wrong with a plan on a page if you can refine it to that.

If you are not sure where to start, get a facilitator for an offsite. It won’t be a cost, it will be an investment. Without a plan, how will you achieve your growth goals and ROI?

Too daunting? There are some simple steps you can take on your own that involve breaking down the big distant goal into smaller ones at different time intervals.

Step 1) The 10-year goal

What’s the goal for you and your business? This needs to be an objective that both excites you and scares you in equal measure. Add a financial number to go with it. Don’t get too hung up on the veracity of the number. For now, it’s just a rabbit to chase. And don’t worry too much about the details of how you’ll achieve your goal either. It kills the creativity.

However, do work out the five big steps you’ll need to take to get there in 10 years. Simply outlining those five big steps provides a series of objectives that you can break down further or chip away at in some of your shorter term planning.

Step 2) The three-year goal

Once you know your 10-year goal, you can create a three-year view of your business. Three years is like looking to the horizon. Five years out is too far.

For this goal, pick a turnover number that you are 95 per cent sure you can hit. While the number linked to your 10-year goal should be about 20 per cent believable, the three-year number needs to be something to smash through. If you set too big a target, you could find yourself six to 12 months into the journey knowing you won’t hit it. This demotivates the entire team.

The second part is to describe, in as much detail as possible, what the business will look and feel like in three years. When I check in with clients at their quarterly review, it’s the progress toward this description that I’m most interested in, not how close they are to the financial number.

Why do this? Because to create a great business you’ll need to achieve a lot more than just hit your numbers. You’ve got to be laying foundations for the future, and the descriptors usually capture a lot of that well. This process of visualisation is commonly used by top sports people to lift their performance.

Step 3) The one-year goal

The last part of the business-planning process is to set yourself a 12-month goal.

The financial target here should be 100 per cent achievable. This is especially true if you’re a business that has never really hit its objectives.

You need to build up the skill of being able to forecast accurately. When you can trust your numbers, you can make quality plans off the back of them. When your numbers feel like pie in the sky, you can’t plan effectively and your team won’t trust you.

Summing it up

I’ve discovered that by using this approach, a quality business plan becomes the written goal for you and the business. Put another way, it provides a kind of compass that you can regularly refer to see if you’re on course. If not, you have time to act.

We started this discussion with my surprise that so many advice businesses do not have a documented business plan and even many of those that do have one rarely revisit it. As French writer Antoine de Saint-Exupery once said, “A goal without a plan is just a wish.”

So don’t despair. Great growth and success are possible. Living the life you want is possible. But you need a plan, you need a strategy. And you need to be able to implement them. What I’ve set out above is a great place to start. Let’s get to work.

Share your comments and feedback with the editor
David Haintz is founder and principal of business-to-business consultancy Global Adviser Alpha. He is a CFP and a past director of the Financial Planning Association of Australia (FPA), where he was instrumental in the push for professionalism. David has had a 26-year career with his own firm and subsequently became a founding director of Shadforth Financial Group. He departed Shadforth in 2015 and established Global Adviser Alpha.