A strategic plan means growing your business on purpose rather than by accident, says Larry Distillio, director of financial advisor business management with Mackenzie Financial Corp. in Toronto. And before you can lay that plan, you must have a vision for your practice.
By analyzing some important factors within your practice, you will learn what your focus should be and develop some goals to correspond with that focus.
Here are the four areas to consider in determining your vision:
1. Your target market
Advisors who don’t have a plan for their business often end up with too many, disparate clients — or too many of the “wrong” clients. That’s why determining who you want to serve is critical.
Start this process by printing a list of your current clients. Have a green, a yellow and a red highlighter nearby.
For each client, ask yourself whether you want to duplicate that person in your client base. Does this person provide you with an adequate level of assets? Is he or she a pleasure to work with? Does the client provide referrals?
If so, highlight these clients in green.
Clients who are needy, require a lot of your time and produce less profit, get a red highlight.
Those who fall between those two categories would be your “yellow” clients.
Consider your “green” clients and the best of the yellow clients, looking for characteristics they have in common. Perhaps most of them belong to the same industry or profession, share similar geographical or cultural backgrounds or have similar lifestyles.
2. Your competition
You must understand who your competition is and what their strengths are. Determine whether you are better at providing similar services.
You can get information by asking clients of yours who have worked with your competition in the past. And you can ask centres of influence who collaborate with multiple advisors. Find out what you can about your competitors’ range of services, for example, and marketing strategies.
3. Your strengths and weaknesses
List your strengths, weaknesses, opportunities and threats (SWOTs), Distillio says. Define those elements based on your vision for your practice.
For example, if your current client base is a menagerie of various personalities but you want to focus on helping young professionals, define this anomaly in the context of a SWOT analysis. You may, for example, have noted that your strength is that you employ young people who understand the pressures of building a career, but your weakness is that only a quarter of your client base currently fits the description of your ideal market.
Your next step would be to ask yourself what goals you can set to take advantage of your strengths and opportunities while eliminating weaknesses and threats.
4. Definitions of personal and business success
“You have to spend a lot of time doing what you do every day,” Distillio says. “It should be aligned with what’s important to you.”
So, ask yourself what makes you feel accomplished in your career. Don’t limit the answer to the assets you manage; think about factors such as your community involvement and being a leader to your team.
Your definition of personal success also is important. It must be aligned with what you consider to be professional success.
So, if you pride yourself on being the parent who attends his child’s every softball game, it will be hard to define professional success as having hundreds of clients. Such a large roster would limit you availability for family activities.
This is the first article in a four-part series on developing a strategic plan.
Next: Creating a business plan.