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Summer Is an Ideal Time for Strategic Planning

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It’s no secret that many independent advisors want to grow their firms—or that many of them are frustrated by their lack of success in doing so. In our experience, most growth plans disappoint because firm owners usually spend a lot more time and effort trying to grow their firms than they do getting their firms ready to grow. We find that summer is an ideal time for owner-advisors to start getting their businesses—and themselves—ready to grow. It’s usually a slow time for both client meetings and on-boarding new clients, and advisors themselves have time to do some good thinking. If you’re thinking about growing your firm, here’s a simple, three-step plan to get you started this summer:

1. Develop your vision. I know, most owner-advisors have heard countless times that they need a vision for what they want their firm to become. And yet, most advisors still don’t have one (just like succession plans, exit strategies and marketing plans). Most firm owners feel too overwhelmed with just running their firms day-to-day to spend a lot of time musing about the future. But as I said, summer is a slow time for most firms, and while you shouldn’t spend your entire vacation thinking about your business, you ought to be able to carve out a few days. After all, if you don’t spend at least a little time thinking about what you want your firm to be, chances are it’s probably not going to make you as happy as it might. (Does this sound like the speech you give to clients about financial planning?)

You’ve also undoubtedly seen this list many times, but as a refresher, here are some things you should consider when thinking about what you hope to get out of your business:

    • What job do you want? Some advisors love to work with clients, others like to bring in new clients, and still others want to run a business. You may not be able to just focus on your ideal job at first, but to be happy, you should build a business that enables you to do it someday.
    • How much control do you need to have? Many advisors went independent largely for the control they have over how they service their clients and who they work with. If you like being the boss, then building a large firm with a lot of partners probably isn’t for you.
    • How much income do you need to make? In our experience, most independent advisors didn’t go independent for the money. Still, they and their family do have needs and wants. This question alone can determine how large a firm one wants to build.
    • What’s your exit strategy? Is eventually selling your firm part of your retirement plan, or do you just want to close the doors when it’s time to quit? Your answer can determine not only the size of your firm, but whether you need a succession plan, partners, technology systems and a marketing plan that regularly brings in new clients (to keep your client base from getting too old).

2. Target clients. Because very few advisory firms are large enough to do expensive mass marketing, we find target marketing to be the most cost-effective way to get referrals or attract new clients. To successfully grow a profitable business, we find that it’s very helpful to target clients who have similar financial needs. It doesn’t have to technically be a “niche” (such as surgeons or corporate execs), but it should be a group of people you can identify with: retirees, pre-retirees, golfers, couples with college-age children, and divorcees, to name a few successful targets. The key is to pick target clients with whom you have some affinity: You’re a member of that group, your relatives are in that group, or you just like the people who tend to be in a certain group.

3. Identify strategic objectives. Once they’ve determined the firm they want and the clients they want to attract, most owner-advisors sabotage their growth plans by either trying to do too many things at once or failing to start at all. We recommend advisors avoid both of these mistakes by identifying three objectives to implement in the next quarter (say, this fall) that will put their business on the path to growth. (We like three because that’s enough to see real progress toward creating your ideal firm, but not so many that it’s overwhelming, either for you or your staff.)

One of these objectives should be to create a formal five-year or even a 10-year growth plan. The other two should be steps that will take your firm in the right direction, such as hiring a new advisor, creating a marketing plan, adding a new client service, upgrading your technology, finding a strategic partner, etc.

As I said, you don’t have to obsess over your growth plan, but you need to know where you want to go and come up with some first steps to start your firm in the right direction. We find that after that, business growth just seems to take care of itself. And don’t forget to have some fun this summer, too.