1. 20 Journal of Financial Planning | June 2014 FPAJournal.org
Practice Management
PRACTICE MANAGEMENT Operations
F
indings from the FPA Research
and Practice Institute™ 2013
Future of Practice Management
Study show that 50 percent of financial
advisers don’t have a written business
plan. Are you one of them? If so, consider
using our firm’s business planning
process as a starting point for creating
your own plan.
In 2012, our seven-person firm faced
two seemingly independent growth
challenges: how to formalize our growth
opportunities into a single, strategic
planning document; and how to institute
a performance management process for
our growing staff.
Rather than tackling these issues sepa-
rately, we integrated them into a single
business-planning process. The result: an
annual business plan that clearly links our
long-term growth strategy to each staff
member’s short-term responsibilities for
the coming quarter and year.
This new planning process, which we
deployed in 2013 and 2014, has proven to
be an important management tool for our
firm. It has helped us get more work done,
but more critically, it has helped us get the
right work done. We know the work we are
completing now is laying the groundwork
to achieve our growth objectives and
vision over the coming years.
4 Steps to an Annual Business Plan
Our annual business plan contains four
integrated steps. Each step has a distinct
purpose but ties directly to the next step.
In total, the plan is just 10 pages long.
Step 1: Vision. This step succinctly
articulates the firm we want to become
over the next three to five years. It
includes just four items that capture our
external and internal vision. The external
vision describes our ideal client and the
set of services that are most compelling
to that client and most distinctive in our
marketplace. The internal vision describes
the type of sustainable business we want
to build and the growth benchmarks we
want to achieve.
Step 2: Objectives. This step begins to
describe how we will achieve our vision.
It includes eight major objectives that we
must accomplish over the next three years.
Each objective is too large to complete in a
single year. The descriptions are high-
level, containing only enough detail to
offer a clear image of the scope and focus
of the objective.
Step 3: Deliverables. This step takes
each of our objectives and describes what
we need to complete in the current year
to ultimately accomplish the objectives
over the next three years. For 2014, we
established 54 deliverables (six or seven
per objective). The descriptions are
detailed, because they need to be assigned
to staff members and tracked over the
course of the year.
Step 4: Roles and responsibilities.
This final step takes each deliverable
and assigns it to one or more staff mem-
bers. Every deliverable has at least one
clearly assigned leader, and the more
complex ones have additional leaders
and helpers. The descriptions include a
set of tasks, as well as the metrics that
will be used to measure completion and
performance.
Putting Strategy into Action to
Accelerate Growth
by Stephen Barkhuff, CFP®
, CFA
Vision Objectives Deliverables
Roles and
Responsibilities
• 3–5 year view
• 1 page
• 4 items
• 3-year view
• 1 page
• 8 items
• 1-year view
• 2 pages
• 54 items
• Quarterly view
• 6 pages
• 100 items
Annual Business Plan

2. June 2014 | Journal of Financial Planning 21FPAJournal.org
PRACTICE MANAGEMENTOperations
Performance Management Process
Our performance management process
builds directly from the roles and respon-
sibilities outlined in the business plan. At
the beginning of each year, staff members
use the roles and responsibilities pages to
plan out their year and create individual
performance plans. They break down their
assigned deliverables into quarterly tasks
and coordinate activities with others if a
deliverable has multiple leaders/helpers.
These individual plans form the basis of
quarterly performance reviews. At the end
of each quarter, staff members complete
a self-assessment of their performance
against their assigned responsibilities.
They use a standardized template that we
created to facilitate this process. After the
self assessments are complete, one-on-one
meetings are held with each person’s
manager to review accomplishments,
discuss strengths and development areas,
and prepare for the coming quarter.
At the same time, our executive director
leads a group discussion of firm-wide
progress against our deliverables. During
the meeting she highlights our major
accomplishments as well as the initiatives
that are still outstanding, and sets the
stage for the remainder of the year by
underscoring the activities that will be
most critical to our success.
Separately, she holds a comparable
discussion with our firm’s board of direc-
tors to update them on our priorities and
progress. In that context, the business plan
is proving to be an effective communica-
tion and governance tool.
The Business Plan in Action
As an example of our four-step business
plan, I will highlight the projects we have
underway to become a more cost-effective
organization.
Like all of our work, these projects can
be tied back to a much broader vision and
set of objectives. The vision guiding these
projects is to build a leading, sustainable
financial services nonprofit. This vision
encompasses a wide range of areas,
including revenue generation, client
impact, stakeholder satisfaction, and
talent acquisition. Because of its breadth,
this vision alone triggers multiple
objectives. One of them is to implement
cost-effective business practices, which
describe four specific ways we want
to become more cost-effective. These
descriptions are intended to express a
clear vision of where we want to focus
our work over the next three years, not to
define particular projects.
Next, the deliverables included in the
plan describe the initiatives we must
complete this year in order to ultimately
achieve our objectives and vision. For
2014, nine deliverables are associated
with the objective to implement cost-
effective business practices.
Ultimately, all of these deliverables need
to be resourced and completed. Each of
the nine initiatives is assigned to one or
more leaders and helpers on the roles and
responsibilities pages of our plan. These
staff members then build the work into
their individual performance plans, and
progress is monitored quarterly.
Inspiration for the Plan
The inspiration for our planning process
came from three sources. Two are unique
to my own work experience. Earlier in my
career, I worked at the Boston Consult-
ing Group and learned how to create
clear, actionable strategic plans. Later I
worked at Bank of America’s private bank,
were I used a highly effective quarterly
performance planning process. My
final source of inspiration is the publicly
available series of One Page Business Plan
books by Jim Horan. I recommend them
to any business leader wishing to explore a
simple yet powerful methodology.
Developing the Plan
The first version of the business plan
took roughly 40 hours over six weeks to
complete. It was mostly a two-person
effort. I led the process and created rough
drafts, and our executive director reviewed
Deliverables Pages (Excerpts)
Introduce VOIP
telephone
solution.
Automate credit
report data pull.
Pilot client portal. Develop automated
programmanage-
ment dashboard.
Pilotsecure
file-sharingsolution
withbusiness
partners.
Web-enable
manual client
profile forms and
tools.
Introduce online
appointment
scheduling
solution.
Deploy computer
kiosks for client
use.
Update informa-
tion security and
data collection
policies.
Vision and Objective Pages (Excerpts)
Vision Page (Excerpt)
Build a leading, sustainable financial
services nonprofit:
• Balanced and diversified mix of
contractual revenue and philanthropy.
• Efficient client aquisition model.
• Cost-effective business practices.
• Demonstrated client impact.
• Satisfied stakeholders.
• Pipeline of talent.
Objective Page (Excerpt)
Implement cost-effective business
practices:
• Outsource sub-scale or peripheral
processes.
• Automate core but manual processes.
• Shift to client self-services where
appropriate.
• Standardize program practices.

3. 22 Journal of Financial Planning | June 2014 FPAJournal.org
PRACTICE MANAGEMENT Operations
and edited each draft. When we were
happy with the plan, we shared it with all
staff and incorporated their feedback into
a final version.
In our drafting sessions we completed
each of the four steps in order, starting
with the vision section. Much of our
time was spent carefully articulating the
vision and objectives for our firm. We
went through several iterations until we
were satisfied with the content and tone.
The rest fell together more quickly, and
the rollout to our staff was surprisingly
easy, because the sections of the plan tie
together logically and cohesively.
Since then we have completed our
first annual refresh. The process was
easy, requiring about eight hours over
two weeks to complete. It was again a
two-person effort, with the entire staff
providing feedback toward the end. We
barely needed to edit the vision and
objectives sections, and mainly focused
on updating the deliverables and roles
and responsibilities for the coming
year. We feel the stability of the plan
year-over-year is a positive indicator
that our growth strategy and supporting
initiatives are sound.
Benefits of the Plan
Our annual business plan has delivered
benefits in four important areas:
Strategic growth:
• Helped us define our ideal customer
and set of services. We are now able
to screen prospects more quickly and
with less effort.
• Increased our focus on longer-term
goals, because day-to-day respon-
sibilities are now directly linked to
long-term growth objectives.
Communication:
• Helped us succinctly articulate our
vision and mission. We have incorpo-
rated statements from the plan into
our external presentations and market-
ing materials, making our messaging
more consistent and powerful.
• Increased our level of communica-
tion about priorities and progress
among staff and our board.
Job performance and satisfaction:
• Increased our focus on job perfor-
mance. Each staff member now has
well-defined quarterly responsibilities
and is evaluated based on achieve-
ment of those duties.
• Enhanced employee satisfaction.
Staff members report that they like
having well-defined responsibilities
and knowing how those duties help
the firm grow over the longer-term.
Capacity management:
• Helped us identify bottlenecks.
As roles and responsibilities are
defined, it quickly becomes clear
where staff members or functions are
overburdened. This has enabled us
to strategically add resources where
they are needed most.
• Increased our flexibility and respon-
siveness to new opportunities that
arise during the year. New options
are evaluated against our existing list
of responsibilities. If a new project
has greater strategic value than an
existing project and fits within our
capacity constraints, then we replace
the existing project with the new one,
with full knowledge of the trade-offs
we are making.
Worth the Investment
The investment of time and resources
we made in this process has been
worthwhile. Our business plan has
become an important management tool
for our firm, and we are realizing both
short-term and longer-term value from
the process. We are excited to see what
we can achieve this year and how those
accomplishments will help us fulfill our
vision over the coming years.
Stephen Barkhuff, CFP®, CFA, is the deputy director
of financial services at Compass Working Capital. His
work is focused on helping underserved individuals and
families achieve their financial goals. He is the 2014
recipient of the Diversity Scholarship for FPA Retreat.