Supercharging Your Business Plan: Combining Logic & Emotion

Phoenix: "I have never once--not once during my 12-year career--ever really committed to the performance targets I set in my annual business plan," confessed Nathan. "It's even more frustrating because I'm the advisor on the team that loves crunching numbers--but there's something in these business plans that rubs me the wrong way, and it's probably holding our team back. Weird, isn't it?"

Phoenix: "I have never once--not once during my 12-year career--ever really committed to the performance targets I set in my annual business plan," confessed Nathan. "It's even more frustrating because I'm the advisor on the team that loves crunching numbers--but there's something in these business plans that rubs me the wrong way, and it's probably holding our team back. Weird, isn't it?"

Here was Nathan, a team leader and million-dollar producer, successful by all industry standards, confessing that he had always struggled with business plans. A bit surprised, I asked why.

He didn't have an answer.

You see, Nathan was a prisoner of the past. Like many advisors, the planning he was exposed to was a corporate exercise premised on what "has been" rather than what Nathan truly wanted to be. His goals and expectations were being set using previous numbers and corporate objectives. Some years the targets were too low, while other years initiatives were included that weren't linked to what Nathan wanted for his team. The result: Nathan had little or no emotional ownership in the business-planning process. Lately, this has been a frequent cause of frustration as he knows his team is underachieving.

A much more effective approach to planning begins when you plumb your imagination to envision exactly what you'd like your practice to look like in five years. This begins the emotional connection. Imagine what it could be--what it can be.

If you haven't already, develop an "Ideal Client Profile." This is a potential profit analysis that identifies those clients who:

  1. Produced the highest levels of gross commissions or fees during the past 12 months.
  2. Have the highest levels of total assets on your books.
  3. Have the potential to supply more gross commissions, fees and/or assets in the next 12 months that would be comparable to, or higher than, the above.
  4. Possess affluent centers-of-influence with the potential for introductions and referrals.

Then explore additional factors related to your business, including:

  • The number of ideal clients you want.
  • The services needed to serve these demanding, affluent clients.
  • The size of your practice.
  • The assets, revenue and income you want.
  • The types of team members--and skill sets--you want.
  • Key elements necessary for improving the quality of your life.

Done properly, this step lays a dynamic and vital foundation for a long-range business plan. Basically, it combines the logical side of your brain with your emotional side. This is quite powerful and allows the application of your imagination--of "Thinking Big"--to become real.

Obviously, I'm not suggesting that you disregard your firm's planning process nor the past and present when formulating your plan. What I'm asking you to do is combine logic with emotion. No matter how well you envision your future (emotion), you'll never get there without analyzing factors (logic) such as:

  • Your current asset and production levels.
  • Number of clients, including clients added and lost over the past 12 months.
  • Quality of the clients added and lost over the past 12 months.
  • Production growth, asset growth, etc.
  • Total number of clients in your practice.
  • Number of non-revenue generating clients.

Now you're ready to honestly assess your current business development strategy and to determine what's been working and what has not. Unearth a copy of your current business plan and determine how closely you followed it--and if you did not, why? This, in itself, may speak to some of the problems you're encountering.

Ultimately, you'll want to pay close attention to sources of your current revenue, determine if additional revenue potential exists from those sources and identify the current and prospective clients who fit your affluent standards.

To successfully employ "affluent business planning," it's important to target your efforts. In the last issue I discussed the Four Key Affluent Motivators, now I want to divide the affluent into four segments, based on how America's top quintile income earners have achieved their wealth:

  • Generators of Wealth --entrepreneurs, self-employed professionals, top artists and entertainers.
  • Earners of Wealth --corporate managers and highly paid salespeople.
  • Receivers of Wealth --retirees, divorced women, widows and inheritors.
  • Managers of Wealth --those who manage qualified retirement plans, non-profits, municipalities, charities and foundations.

Remember, 93 percent of the affluent are, or have been, hard-working Americans; they are self-made. This will be a common theme as you determine the financial services you will provide for individuals in each of the niches that you target. You may discover that, in addition to providing investment (asset) management, retirement planning and insurance planning, for example, you must expand your services to include:

  • Education Planning
  • Tax Planning
  • Charitable-Giving Planning
  • Estate Planning
  • Budgeting and Cash-Flow Management
  • Banking Services

Once you have a clear picture of your current business, your desired market niche and your envisioned future, you're on the path to developing a business plan that you will emotionally own.

By applying yourself to the above, you will supercharge your business planning by activating the total powers of your mind. When you merely take last year's numbers and impose some arbitrary increases, you create a plan that tries to push you ahead using only logic. When you envision and then define your desired future while analyzing your past and present, your plan will continually pull you toward the place you want to reach.

So combine logic and emotion and supercharge your 2007 business plan.

If you want to begin the "logical" side of your planning, you can start by taking inventory of your current business. Click here for a FREE, with no obligation, PDF copy of our "Analyze Your Current Business" worksheet. From there you can envision your future.

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If there is a topic you would like covered, or if you have any special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].

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