Setting yourself up for 2024: Start with a business plan

21 December 2023

Do you have specific growth or profitability objectives for 2024. Write them down and build out a business plan to make sure you achieve those objectives.

Why you need a business plan

In a landscape where businesses are continuously adapting to dynamic market conditions, a well-defined business plan is not just a tool, it's a roadmap to success. Without the roadmap you can easily go off course and makes it significantly harder to achieve those goals:

A business plan:

  • Gets everyone on the same page: by writing down your goals and objectives, you will ensure that all of your stakeholders (staff, business partners and even family) are aligned on the objectives and what you are trying to achieve and do
  • Gives you a roadmap to execute against: With specific and actionable tasks, a business plan transforms lofty ideas into achievable milestones, keeping your firm on a trajectory of growth and innovation
  • Gives you clarity on what you should say no to: once you have agreed on your objectives and roadmap it becomes very easy to say no to things. If a new opportunity it is not on your roadmap or does not align with your strategic objectives, then it is a very easy to say no
  • Identifies where you might have holes in your plan / business: you might go through your business planning process and still have some holes. Revenue or profitability might not match your objectives. This means you either need to reset your objectives or do something different. Much better to understand this in advance rather than wondering at the end of the year why it did not work
  • Forces you to spend some time thinking about your business: Dedicating time to thoroughly think about your business from multiple angles can reveal hidden opportunities and areas for improvement.
  • Gives you something to measure success against: By setting out your plans with clear milestones and objectives you can hold yourself accountable and will have a clear measure of how you are performing. Not delivering to your plan is not a failure, though allows you to make changes to what you are doing or alternatively reset your objectives.

Constructing Your Business Plan

Creating a business plan for an advisory business involves a structured approach that addresses all critical aspects of your business. Here's a step-by-step guide to help you develop an effective plan:

  1. Look at what happened over the past 1-2 years in your business
    • What has worked and what has not worked in your business
    • Look at everything that you have done and put it into one of two buckets
      • What has worked and why did it work
      • What has not worked and why did it not work
  2. Have a look at what others in the industry are saying and doing
    • How has your business performed against others in the industry - talk to your reps at the banks or insurance companies to understand what is happening in the broader market
    • What are other advisory firms saying has worked well or not worked well for them
    • Are there any firms in the industry that you look up to and think are doing some interesting things you can copy – it is much easier to copy someone doing an excellent job rather than trying to create ideas from scratch
  3. Set yourself a small set of clear objectives
    • What are the key things that you want to achieve in 2024, can you measure them?
    • The more specific they are the better
  4. Create a series of initiatives and a roadmap
    • What are the initiatives that you need to undertake to achieve your objectives and how are you going to do them? It might be a new website to drive more leads, or new referral partners to drive revenue per customer, but you need a clear set of initiatives to ensure you can do what you want
    • Also, focus on what you are going to stop doing. You can’t do everything so that you need to prioritise what is important to you
  5. Create a financial forecast to match the roadmap
    • You now know what you are going to do operationally. Now turn that into a financial forecast. It does not need to be much. A 10-line excel sheet is all you need to lay out your revenue lines and costs monthly.
    • When creating your financial forecast make sure you tie in the operational metrics as well.
    • If you want help with this, the team at kōura are good with spreadsheets.
  6. Have someone review and challenge your business plan
    • We are all good at working in isolation. But there is nothing better and a bit of a healthy challenge. It always helps to get someone to critique and think through what you are doing
    • Again – something that Paula can help you with
  7. Write it up, starting with a plan on a page
    • Put it on a page. This allows you to share with your team and means there is full alignment. You can put it into more detail, and you might want to do a page on each one of the initiatives, but you should try and get the main part of it on a page to start with so that everyone is aligned
  8. Look at it each and every month
    • Each month, pull out your plan and look at it. What has happened, and what has not happened? What needs to change and what should you focus on for the next few months
    • Business plans are living documents. They will change and you will not do everything that is set out for them.


Some common pitfalls in building out a business plan for an advisory business

  1. Your business depends on the market
    • Don’t get frustrated when the market turns against you, and you no longer hit your objectives. We all work in cyclical industries that have some big ups and downs. Be aware of that and make sure you prepare for the downsides as well as the upsides.
  2. You overextend on costs (higher costs equals higher risk)
    • High fixed costs in an adviser business equals higher risk. Make sure you size your fixed cost base for the low point in the market and be very careful about hiring and incurring costs with the expectation that you will grow into it. Managing your cost base is equally important to managing your revenue base.
  3. Don’t try and do too much
    • You are your business's biggest asset. As a small business owner, you will be constantly pushed and stretched and try to do everything to save yourself some costs. That is unsustainable and going to hold you back. Just remember, the most valuable thing you can be doing is talking to clients and building your business. Therefore, where you can outsource small / admin-style tasks do it. If you try and do everything, you will often end up doing nothing.
    • That is why referral partners are so good. You get a revenue stream with negligible work and no regulatory risk

Conclusion: Your Path to Success

Embracing a well-crafted business plan, especially one that integrates services like KiwiSaver effectively, sets the foundation for your advisory firm's success. It positions you not just as a financial advisor but as a comprehensive financial partner for your clients.

Reach out to us for more insights on how strategic business planning and a partnership with Kōura Wealth can elevate your advisory services to new heights.

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