As the first quarter of 2007 draws to a close, it's a good time to revisit your business plan: those goals you established at the end of last year, the commitment you made to turn 2007 into Your Year of Greatness (as I urged you to do in my January column).
Recently I was listening in on an associate's tele-coaching call. Doug, the advisor being coached, was reviewing his long-range professional goals and had an epiphany: He was achieving them (he had increased his production to $1.4 million), but his heart wasn't in the plan he had completed for 2007. In Doug's words: “I could hit these goals working two days a week.”
This is one of many problems I see with business plans in the financial-services arena: arbitrary or unrealistic goals. These kinds of goals are not motivators; they are mirages — they provide only the illusion that serious planning for the future has been done. Overly aggressive pie-in-the-sky goals can de-motivate because they seem so difficult to reach; so can goals that are set too low, because they don't require much effort or energy on your part, or offer much reward.
Once you've got a realistic goal, you've got to map out the specific actions it will take to reach that goal, and you've got to make it personal.
I recall being envious in high school of classmates whose parents offered them money in exchange for getting higher grades — $10 for every B, $20 for every A. I was jealous because I was taught to believe that learning was its own reward. And I was infuriated because few of the children actually earned the grades they needed to collect their “bribes.” “If only that were me,” I thought. “I'd be rich!”
It was only when I reached age 25, created my first business plan and embarked on my career that I was able to understand why these kids rarely succeeded. What my classmates really needed was a personal roadmap for success. In other words, they needed to craft a plan with specific steps to get them to their goal, which might have included tutoring, learning to take better notes or getting help for a learning disability. And then they needed to develop an emotional attachment to the result by associating it with a personal reward, rather than a financial one. If it's personal enough, that reward can become a powerful motivating force.
Drawing Your Roadmap
Financial advisors can build a roadmap by breaking down the final goal into different components with individual targets. Examples, include:
- Total clients and new clients.
- Total assets and new assets under management.
- Revenue flows — from fees on assets, fees for financial plans, fees from advice, commissions from insurance and annuity products, etc.
- Expenses — distribution to partners, salaries, marketing, administrative, equipment purchases and leases, overhead, etc.
- Production, net revenue and personal income.
List these elements on the left side of a piece of paper. In the center of the page, state exactly where you are now for each. To the right of that, determine where you want to be in five years. You have now filled out the picture of your desired future and defined the gap you need to close to achieve it. Next you need to develop action steps to turn your plan into reality.
Get Emotionally Attached
Managing this pipeline process drives the growth component of your business plan. But growth for growth's sake isn't going to get you working at 100 percent. To develop your emotional attachment to this plan, you've got to figure out what personal goals you want to fulfill with the financial resources that business growth provides. Doug decided that he wanted to retire in 10 years on a horse farm at 70 percent of his current income (emotion). For this to occur, he needs to manage $600 million in assets and produce $6 million in annual revenue (logic). When asked what he needs to do to reach those numbers, he responded: “I need to execute two high-impact rainmaking activities a day.”
Now Doug is motivated. Revisit your business plan, link its logic with your emotions and execute. Remember, 2007 is Your Year of Greatness.
Writer's BIO: Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com