Think, Plan, Commit, Act

Futuro Conference – Adelaide 2013

Presented by: Julia Skull

17th September 2013

Why create a business plan?

* Business Health – Future Ready IV Report 2012

• Surprisingly, only 57% of financial planning practices have a clearly

documented business plan*

• However, the increase in profit for firms who effectively business plan vs

those that don’t = 165%*

• Its good business practice

• Will help increase your business valuation

• You will be more successful

1. Hold a Business Planning Day with key stakeholders (consider involving all staff);

2. Document your plans and actions, and;

3. Allocate responsibility and communicate to those involved;

4. Review, track & monitor the plan monthly;

5. Communicate and provide feedback minimum quarterly.

What is effective business planning?

A Structured Process1. Setting your vision & Goals

2. Your Financials

3. Growth strategies

4. Advice delivery model

5. Resources and operations

6. Other strategic plans

7. Implementation - developing the plan

8. Monitor and review

One Page Business

Plan

What distinguishes the highly successful advisers from the rest of the market?

1. Setting your vision & Goals

It isn't:• Opportunity• Experience• Education• Or even luck

It is simply:• The desire and ability to

create a vision for the business

• The confidence to try and make it a reality

Think

“A powerful business tool that can be used to motivate, unify and inspire”

Your Vision

Your Staff

Your Referral Partners

Your Clients

Your Potential

Successors

Think

When its clear a vision is like a light house that pulls and guides you and your

team continuously towards your strategic objectives.

Your Vision

Think

• A vision statement answers the question,

– "Where do we want to go?“

• It sets the direction for your business

• It inspires you to succeed and exceed

• Gives your staff & clients something to believe in

Why is your vision statement important?

Think

1. Hold a vision planning workshop with all Business Partners

2. Paint a mental picture of what your business will look like in 3-5 years

3. Work towards creating a clear image of a possible future that is compelling to all stakeholders

4. Involve key staff in the process - their engagement is key to your success

5. Communicate to all stakeholders

Steps to creating your vision

Think

• Everything you do must have the vision in mind

• In order for your business plan to work – it must be based on

your business vision.

• Goals and Strategies must align with your vision

The vision based business plan

Think

Develop SMART Goals and Objectives

• Specific – it is clear and well defined

• Measurable – can it be quantified? How will you know when it is accomplished?

• Achievable – Be realistic. Make sure your goal is feasible in terms of the resources available to you

• Results oriented - Focus on the end results you desire rather than the activities necessary to get there.

• Time Based – Give yourself a deadline

Think

Examples of SMART Goals

To achieve sustainable profit growth of 20% by

June 2014.

Increase revenue generated by new

business from 20% to 25% by December 2014.

To acquire an average of 2 new ideal clients

(revenue of $5K+) per month in 2013

Improve business efficiencies by increasing profit per employee by

10% by June 2014

Think

Breakout Session 5 minutes Goals & Objectives

What are your SMART Goals in the:

• Short Term Goals: 12 months

• Medium Term Goals: 1 - 3 years

• Long Term Goals: 3 - 5 years

1. Cashflow – statement of cash flow

2. Revenue – focus on what you can control

3. Expenses – fixed & variable

4. Monitor & Review

2. Your Financials

Plan

1. Prepare a 12 month Statement of Cashflow

– Opening balance, cash incoming, cash outgoing, closing balance

2. Be diligent with your invoicing

3. Follow up outstanding debts in a timely manner

4. Monitor the payment of expenses

Cashflow

Plan

Revenue

What parts of the revenue equation can you control?

• Price - YES

• Number of services offered - YES

• New clients – NO

• Retention of clients – NO

Plan

Where is YOUR revenue coming from?Break it down

Business revenue targets

Finding new clients $_______

Getting existing clients to spend more $_______

Retaining existing clients $_______

Plan

Expenses - understanding your costs

Plan

1. Review & analyse your expenses from the previous year

2. Set expense budgets and stick to them (or have strategies in place to deal with differences)

3. Keep accurate and detailed records so you know where your money is going.

4. Review your expenses monthly and identify those that exceed budget. Question why?

Benchmark Average Top 20% of firms

Revenue per income producer

$400,000 $750,000

Active clients per income producer

80 100

Average fee per active client $4,000 $7,000

Revenue per employee $150,000 $250,000

Gross profit margin 48% 60%

Net profit margin 21% 35%

Benchmarks for budgeting

Catalyst for Financial Planners Benchmarking 2012

Plan

Monitor & ReviewAllow some flexibility when your budget is wrong

• Have a strong determination to stick to your budget

• However, the secret to any business budget is your ability to be flexible. – Such as holding cash reserves or finding ways to reduce expenses

following a rough month can help bring you back on track quickly.

Plan

• Inevitably growth will be part of your long term business objectives.

• Where do you start?

a) Existing client base - upsellingb) Referral networks – new clientsc) Strategic marketing – campaigns/branding

3. Growth strategies

Plan

Conduct an analysis:

1. What is the average age of your client base?

2. What is the gender ratio of your client base?

3. Is there a commonality with professions of people you work with (such as farmers or medical professionals)?

4. Do you know what the breakdown of your revenue via service is (such as insurance or estate planning)?

a) Existing Client Base

Plan

Where do the opportunity's lie in your existing client base?

a) Existing Client Base

Niche Market

Clients networks – community

involvement

Client Sale

Referrals from existing clients

New Services ie Aged Care/Estate

Planning

Plan

Accountants

b) Your Referral Networks

Your CompanyYour

company

Lawyers

Mortgage brokers

Clients

Community groups

Accountants

Social Media

Plan

1. Mind Map your referral networks – think about ‘all’ your

connections

2. Develop a referral partner process & plan

3. How do your referral partners ‘see you’ – what is their

perception of you and is this accurate?

4. Marketing campaign/plan – seminars, education workshops,

joint meetings

5. Monitor and review the relationship regularly

b) Steps to developing successful Referral Networks

Plan

Business revenue objectives translate simply into marketing

objectives… revenue growth is by

• Finding new clients,

• Getting existing clients to spend more, or

• Retaining existing clients.

c) Strategic marketing planning

Plan

Where is YOUR revenue coming from?Break it down

Business revenue targets

Finding new clients $_______

Getting existing clients to spend more $_______

Retaining existing clients $_______

Plan

c) Strategic marketing planning

Business Revenue

Objectives

Finding New Clients

Getting existing

clients to spend more

Retaining existing clients

Plan

c) Strategic marketing planningFinding New Clients Promotional/Brand Activities

• Direct Mail, Advertising, Seminars to the public at large

Referral Partners• Professional, Corporate & Group COI’sExisting Client Referral• Prompt at review, Tactical campaigns

Getting existing clients to spend more Organic Growth (Client driven)• Change in clients circumstancesTactical Growth (Business Driven)• Upsell, increase services offered

Retaining Existing Clients Deliver on your promise• Have a strong service model and offering• Remind your clients what you are deliveringMake barriers to client exit• Be the key – extend services, referral partners

Plan

1. Identify 2-3 growth strategies you would like to implement to help achieve your goals and objectives.

2. Share with the person next to you.

Remember to always consider your vision & your goals

Breakout session – 10 minsDeveloping your strategies for growth

To stay ahead of competitors and improve efficiencies its important to review each and every year your:

a) Segmentation methodb) Services / service levelsc) Pricing methodology

4. Advice delivery model

Plan

Segment review1. How do you currently segment your client base? Revenue

or are there other factors you consider? Marketing and efficiencies?

2. What are your segments called and how are they defined?

3. What’s working and what’s not working in relation to your segmentation?

4. Do you re-segment your client base every year?

a) Segmentation method

Plan

Services Review1. How do you currently service your client base?

2. What are your service packages called and how are they defined?

3. What is the cost to the business to deliver those services?

4. Do your clients regularly question the value the get from you?

5. Are your service levels differentiated or do your clients all received the same service – is this intentional?

b) Services

Plan

c) Pricing

Pricing Review1. Are you priced competitively?

2. Do the FoFA changes impact your pricing model? Do you need to make changes?

3. What is your profit/value margin per client?

4. Are all your clients profitable?

Plan

Advice Model – Things to think about

• Apply a flexible segmentation model• Have clearly defined services / service levels – use technology• Resource allocation costs are greater for new business • Don’t forgo new business revenue in hope of future ongoing

revenue• Do not undervalue your strategic advice

Plan

5. Resources and operations

Plan

• Right people, right jobs – job descriptions

• Technology – are you using it effectively?

• Do you have the resources to implement your plans?

• Culture – staff retention, values

• Processes and efficiencies

To achieve your vision and meet your goals and objectives, growing organically may not be the only strategy to consider.

You may need to consider other growth plans such as:

• Acquiring another business – FP, Accounting

• Formal Joint Venture or merging with another business

6. Other strategic plans

Plan

1. Are you looking to develop a joint venture or merge with another business in the next 1-3 years?

2. Are you looking at acquiring any companies over the 1-3 years? Have you thought about the range and scope of this project for your company?

3. What is your business succession strategy? How do you plan on exiting the business over the next 1-3 years? If someone were to die or leave tomorrow what would the business situation be?

Other strategic plans – things to think about

Plan

1. Document your plans– 1 page plan minimum– Full plan every few years

2. Develop your action plan and set priorities – breakdown into 90 day sprints

3. Determine who will be responsible for what actions and set time frames. How will they be measured?

4. Communicate to all key stakeholders

7. Implementation Developing the business plan

Commit & Act

Consider a business mentor or coach:

• Someone who you believe can really add value to your business and who you respect

• They will hold you accountable to agreed actions • Don’t go overboard – start with one person and work up• Be prepared to pay – “skin in the game”• Review meetings at least quarterly!

8. Monitor and review

Commit & Act

Final words

“The general who wins the battle makes many calculations in his temple before the battle is fought.

The general who loses makes but few calculations beforehand.”

Sun Tzu Chinese Military General, Strategist and Philosopher 400BC The Art of War

Questions