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A list of Dan Richards’ previous articles appears at the end of this article.
This month, many advisors are working on next year's business plans.
For many, those plans will end up like a black hole in space - lots of energy will go in and little or nothing will come out.
Causes of the "black hole" effect
A number of things cause business planning to fail to translate into results.
First is underestimating the impact of entrenched habits - and failing to build in routines around new initiatives emerging from the business planning process.
Second is a lack of process to follow up on commitments made during the business planning process - and a lack of consequences for failure to follow through.
Third is being overly optimistic and trying to do too much - with the all too familiar result that nothing changes.
Last is a lack of absolute commitment to new initiatives coming out of the business planning exercise - seeing them as "nice to do" rather than "need to do."
Start by reviewing where you've been
Any successful planning exercise starts by clearly identifying where you'd like to be in the mid-term (say three years) and then translating that into your goals for the coming year.
You then need to look at everything you've done in the past year in the context of those goals, dividing activity into three categories:
- Existing clients - Activity to build loyalty, communicate effectively and maximize revenue
- Prospective clients - The things you've done to cultivate new clients
- Team and practice efficiency - Activities to maximize overall efficiency
For each major activity you're doing now, ask yourself and your team:
- On a scale of 1 to 10, how effective is this?
- Is this something we should do more of?
- How can we make it work better?
Do we need to fundamentally change or eliminate this?
