John Augustine of Augustine Financial in Brookfield, Wisconsin, has been in the industry for 10 years. He is deeply passionate about helping his clients grow, enjoy, and, as they see fit, share their wealth. Augustine loves to educate. His dream was–and is–to offer a wide menu of educational sessions to his clients and his community. A year ago, John relocated his office, moving into a space that has a “great room”–one large enough to seat 20 to 30 people easily and an ideal spot for holding client events.
His new office has served him especially well during this period of market turbulence and uncertainty. Last October, for example, Augustine held six “fireside chats,” which included market updates, in his great room. All attendees came through existing clients who had invited friends to the events. As a direct result of these events, Augustine signed up nine new clients. Five of these new clients each had more than $1 million in assets to manage; the other four each brought in up to $750,000 in AUM.
Augustine’s success is not a matter of luck. He knows precisely what he is absolutely passionate about. And he has built that passion into his game plan. When it came time for a physical change of office, his passion (and his plan) served him well. He selected an office that would: 1) give him the space he needed to turn his dream of educating the community about financial matters into reality; and 2) aid him in retaining business as he worked to secure new assets to manage.
Isn’t it nice to know that during a time when the Dow is going up and down 300 points a day, there are success stories among hard-working advisors? Moreover, we might as well be prepared for an economic shift that could be with us for a long time. For small businesses like financial advisory practices, the impact of the economic downturn is keenly felt. Current economic conditions require advisors/business owners to plan like John and to rise to the challenge of leadership.
One of the most important business management habits at any time is the creation of a plan. But the phrase “business plan” may conjure up visions of a big, fat document that takes forever to write. Say the words “game plan,” however, and a document right-sized and more appropriate for small business comes to mind. In fact, an effective plan can be drawn up in one to four pages.
After months of unrest and volatility, creating a game plan may be just the fresh start you need to move forward. In some respects, advisors are already brilliant at this. After all, don’t you create financial plans and portfolios for clients so they can weather the ups and downs of the market?
Here’s how to write a four-page game plan that will serve you well no matter how well–or poorly–the markets and the economy perform. More important, it can help you form an annual business planning habit. Whether you are a veteran planner or a novice, there will be a helpful nugget for you.
Begin with a little preliminary work.
1. Conduct an assessment of your practice.
a. A SWOT assessment guides you in brainstorming about internal Strengths, internal Weaknesses, external Opportunities, and external Threats.
b. A Practice Assessment can be extremely useful. One assessment tool asks 50 questions covering leadership, staffing, operational efficiency, marketing, revenue generation, and risk management. Simply completing this exercise promotes awareness.
2. Reflect on personal vision. Ensure that your business aligns with your personal vision and values. As Stephen Covey, author of The Seven Habits of Highly Effective People, has taught us, the big container is your personal vision for your life. If the business vision doesn’t naturally fit inside, an opportunity for success and happiness is missed.
3. Be aware of your assumptions about the global economy, national and local politics, taxes, business partners, and personal issues (e.g., health). Thinking through assumptions helps to ground plans.
Once this groundwork is laid, you can start writing the plan.
The Process: Page One
The first page of your plan contains your business vision and mission, statements about the strategy for evolving the firm over the next three to five years, and a handful of goals.
Business vision. Business vision builds on personal vision–it helps you live out your personal vision. A sample vision would be “To create customers for life among clients who value our advice and with whom we have an integral relationship.”
Another grounding statement is the mission statement, which answers questions such as:
What does your firm do?
For whom do you do it?
How is work accomplished?
What deliverables are provided?
How are you rewarded?
Strategy. Strategy statements provide the general direction to move your organization toward where your business is heading. Sir Winston Churchill said, “It is always wise to look ahead, but difficult to look further than you can see.” A three- to five-year time frame works for most advisors. Bulleting strategy statement keeps you focused. For example:
Transition to nearly all fees
Focus on super-affluent clients
Decrease number of clients
Find a junior successor