Your Annual Operating Plan: The Roadmap to Your Goals and Objectives

Many financial advisors excel in financial planning…

However, their practices suffer because they do not know how to operate a business. In fact, many advisors do not even have the basic foundation for a successful practice: an annual operating plan.

A practical operating plan is formed through an analysis of your practice. Taking the time to evaluate your practice can help take it to the next level. One of the biggest discoveries advisors find when creating their operating plan is that they work more hours than needed on unnecessary activity – best practices are focused on essential activities! After creating or updating their operating plan, advisors are able to streamline and restructure their activity to be more functional, efficient, and purposeful.

Jon Kreps, CFP, a decade-long participant of the Exclusive Coaching Program, has built an impressive, client- centric, multimillion-dollar firm by staying focused and intentional. “Our commitment to clients is our purpose. We want to add value and always be proactive. We sit down every year to develop our annual operating plan and then we submit it to the Academy of Preferred Financial Advisors for feedback. Having a comprehensive annual operating plan helps us consistently deliver high-end services and uphold our service-based culture.”

Your operating plan should contain several important items. These include:

  • your mission statement,
  • the vision and goals you have set for your practice,
  • your target market,
  • a client evaluation,
  • your service menu,
  • your marketing strategy,
  • your value proposition, and
  • a practical assessment of your production goals and expenses.

So how do you develop a successful operating plan? Here are some practical suggestions:

Be realistic. Don’t set yourself up for failure by setting unrealistic goals. Is what you want realistic to achieve in your timeframe? Build your operating plan around realistic revenue production and expenses. Estimate how much you need to invest in your practice and what type of revenue stream you will generate from that investment. Strategic evaluation, not speculation or wishful thinking, should guide you in this process.

Clearly define your service menu. Choosing a menu of services for a specific target group will help define your practice and differentiate you from the competition. You can save time and energy and become more service-oriented and focused. For example, if your niche is retirees, then offer tax reduction and wealth transfer strategies.

Create opportunities to be visible. Most successful advisors grow through referrals. Include opportunities to be visible and available to prospects. Host events for clients and their friends (in-person or virtual) so that you can be introduced to prospects. Being visible allows clients to refer their friends and peers.

Be flexible. Your annual operating plan is your roadmap. It will help keep you focused on what you are doing and where you are going. As you monitor your progress, you may need to make corrections and revisions to your business plan based on real-life feedback, successes, and failures. Make your plan flexible enough to allow you to make changes if necessary.

Stay focused. It is very easy to drift off course. There are two roadblocks that often happen. Some advisors don’t commit the time to create a carefully considered annual operating plan and many do not follow one. Conversely, some advisors think too much and create an operating plan with too many unachievable items or non-specific goals.

Remember – consistency counts, be practical, and clearly define what you and your firm can do for your clients. Staying focused on realistic and achievable goals will set your practice up for success!

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