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How To Start A Financial Planning Business

How To Start A Financial Planning Business

Modified: December 29, 2023

Learn how to start a successful financial planning business with our comprehensive guide. Get expert tips and advice on launching your finance career today!

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Table of Contents

Introduction, step 1: define your services, step 2: determine your target market, step 3: develop a business plan, step 4: obtain necessary certifications and licenses, step 5: set up your office and infrastructure, step 6: build your team, step 7: establish your pricing and fee structure, step 8: create a marketing strategy, step 9: network and build relationships, step 10: provide excellent client service.

Welcome to the world of financial planning! Starting a financial planning business can be a rewarding and lucrative venture. As a financial planner, you have the opportunity to assist individuals and businesses in managing their finances, achieving their financial goals, and securing their financial futures. Whether you’re a seasoned professional in the finance industry or someone looking to make a career change, this article will guide you through the essential steps to start your own financial planning business.

Financial planning involves analyzing a client’s financial situation, developing strategies, and providing recommendations to help them achieve their financial objectives. This can include retirement planning, investment management, tax planning, risk management, estate planning, and more. As a financial planner, you will play a crucial role in helping your clients make informed decisions about their money and investments.

Before diving into the world of financial planning, it’s important to have a strong foundation in finance and a deep understanding of the industry. Finance knowledge, coupled with a passion for helping others achieve financial success, will set you on the path to building a successful financial planning business.

In this article, we will walk you through the essential steps to start your financial planning business. From defining your services and target market to developing a business plan and establishing a marketing strategy, we will cover everything you need to know to lay a solid foundation for your business.

So, get ready to embark on this exciting journey of starting your financial planning business. By following these steps and staying committed to providing excellent service to your clients, you can create a thriving business that not only helps others but also brings you financial success and personal fulfillment.

Before you start your financial planning business, it’s essential to clearly define the services you will offer to your clients. Financial planning encompasses a wide range of services, and having a clear understanding of what you can provide will help you attract the right clients and differentiate yourself from competitors.

Start by assessing your skills, expertise, and areas of interest within the finance industry. Consider whether you want to focus on personal financial planning, business financial planning , or both. Personal financial planning typically involves helping individuals with retirement planning, investment management, budgeting, tax planning, and estate planning. Business financial planning, on the other hand, focuses on assisting businesses with financial analysis, cash flow management, risk management, and strategic financial planning.

Once you have determined the scope of your services, it’s essential to establish your unique value proposition. What sets you apart from other financial planners? Is it your specialized knowledge in a specific area of finance? Is it your personalized approach to understanding your clients’ goals and providing tailored solutions? Clearly articulating your unique value proposition will help attract clients who resonate with your approach.

Additionally, consider how you will deliver your services. Will you offer in-person consultations, virtual meetings, or a combination of both? Will you provide ongoing financial management or one-time consultations? Will you offer comprehensive financial plans or specialize in specific areas? Defining your service delivery model will not only help you in planning your business operations but also in setting your pricing structure.

Remember, as a financial planner, your expertise is your greatest asset. It’s important to continually invest in your professional development and stay up to date with industry trends and changes. This will not only enhance your credibility but also enable you to provide the best possible advice and solutions to your clients.

By clearly defining your services, establishing your unique value proposition, and investing in your professional growth, you will be well-positioned to attract clients and build a successful financial planning business.

One of the key factors for success in the financial planning business is identifying and understanding your target market. Your target market is the specific group of individuals or businesses that you will focus on serving with your financial planning services. By narrowing down your target market, you can develop a more tailored approach to meet their unique needs and effectively market your services.

Start by conducting market research to identify potential clients who are most likely to benefit from your expertise. Consider demographics such as age, income level, occupation, and location. Think about the type of clients you feel most passionate about assisting and the specific financial challenges they may face.

For example, you may choose to focus on serving high-net-worth individuals who require comprehensive wealth management services, or you may specialize in helping young professionals navigate their early career financial decisions. Alternatively, you may decide to target small business owners who need assistance with financial planning for their businesses.

Once you have identified your target market, it’s important to conduct a thorough analysis of their needs, preferences, and pain points. This will help you tailor your services and marketing messages to resonate with your target audience. Consider the financial goals and objectives your target market is likely to have and the specific services they may require to achieve those goals.

Understanding your target market will also assist you in determining the most effective marketing channels to reach them. For example, if you are targeting millennials, utilizing social media platforms and digital marketing strategies may be more effective than traditional advertising methods.

Moreover, by narrowing down your target market, you can position yourself as a specialist in addressing their unique financial needs. This specialization can give you a competitive edge and help attract clients who are seeking expertise in their specific financial situation.

Keep in mind that your target market may evolve over time as your business grows and you gain more experience. It’s important to regularly reassess and refine your target market strategy to ensure you are consistently meeting the needs of your ideal clients.

By determining your target market and gaining a deep understanding of their needs, you will be able to tailor your services, marketing efforts, and value proposition to attract and serve clients who are the best fit for your financial planning business.

A solid business plan is crucial for the success of your financial planning business. It will serve as a roadmap, guiding your decisions and actions as you start and grow your business. A well-developed business plan will help you define your business goals, outline your strategies, and identify potential challenges and opportunities.

Begin by clearly defining the vision and mission of your financial planning business. What is the ultimate purpose of your business, and what values will guide your operations? Consider how you want to position your business in the market and what unique value you aim to provide to your clients.

Next, outline your business objectives and set measurable goals. These can include financial goals, such as revenue targets, as well as non-financial goals, such as the number of clients you aim to serve or the geographic reach you want to achieve. Make sure your goals are specific, realistic, and time-bound so that you can track your progress and make necessary adjustments along the way.

Once you have established your goals, develop strategies and action plans to achieve them. This may include marketing and branding strategies, client acquisition and retention strategies, pricing and fee structures, and operational plans. Consider the resources, technology, and infrastructure you will need to support your business operations and deliver exceptional service to your clients.

Additionally, assess the financial aspects of your business and create a detailed financial plan. This includes projecting your startup costs, estimating your revenue and expenses, and determining your pricing structure. Conduct a thorough analysis of the financial viability of your business and create contingency plans for potential risks or downturns in the market.

Remember to include a comprehensive marketing plan in your business strategy. Identify your target market segments, outline your marketing channels and tactics, and establish a budget for your marketing efforts. Your marketing plan should focus on raising awareness about your services, establishing your credibility, and attracting and retaining clients.

Regularly review and revise your business plan as your financial planning business progresses. Keep track of your goals and key performance indicators, analyzing your progress and making necessary adjustments. A business plan is a dynamic document that should evolve alongside your business.

Developing a business plan may require research, market analysis, and a deep understanding of the financial planning industry. Consider seeking guidance from a mentor, attending workshops or courses, or consulting with professionals to ensure your business plan is comprehensive and well-informed.

By developing a thorough business plan, you will have a clear roadmap to guide your financial planning business from its inception to its growth and success.

As a financial planner, it is essential to obtain the necessary certifications and licenses to operate legally and effectively. These credentials not only demonstrate your expertise and credibility but also ensure that you are providing sound financial advice and adhering to industry regulations. Here are some key certifications and licenses to consider:

  • Certified Financial Planner (CFP®): The Certified Financial Planner designation is one of the most recognized and respected certifications in the financial planning industry. To become a CFP®, you must fulfill educational requirements, pass a comprehensive exam, and meet experience and ethics requirements. This certification covers areas such as retirement planning, estate planning, investment management, tax planning, and insurance.
  • Chartered Financial Analyst (CFA®): The Chartered Financial Analyst designation is globally recognized and focuses primarily on investment analysis and portfolio management. Achieving the CFA® designation requires passing three levels of exams, meeting experience requirements, and adhering to a strict code of ethics.
  • Registered Investment Advisor (RIA): If you plan to offer investment advice to clients, you may need to register as an investment advisor with the appropriate regulatory authorities. This registration ensures that you are compliant with regulations governing investment advisory services and provides added credibility to your practice.
  • Insurance Licenses: If you will be offering insurance-related services, such as life insurance or long-term care insurance, you will likely need to obtain relevant insurance licenses. These licenses vary by state and product, so make sure to research the requirements in your area.

It’s important to note that the certifications and licenses required may vary depending on your location and the specific services you offer. Be sure to consult with industry associations, regulatory bodies, and legal professionals to ensure you are aware of the requirements applicable to your financial planning business.

In addition to professional certifications, consider joining professional associations and organizations in the financial planning industry. These memberships can provide valuable networking opportunities, continuing education resources, and access to industry updates and best practices. Some notable associations include the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA).

Obtaining the necessary certifications and licenses demonstrates your commitment to professional standards and assures clients that you have the knowledge and expertise to provide quality financial planning services. It will also give you a competitive advantage in the industry and open doors to new opportunities and partnerships.

Take the time to research and understand the requirements for certifications and licenses in your jurisdiction. By investing in your professional development and ensuring compliance with industry regulations, you will establish yourself as a trusted and reliable financial planner.

Setting up your office and infrastructure is a crucial step in establishing a professional and efficient financial planning business. A well-designed and organized workspace will not only enhance your productivity but also instill confidence in your clients. Here are some key factors to consider when setting up your office:

  • Physical Location: Determine whether you will operate your financial planning business from a physical office or work remotely. If you choose a physical location, consider factors such as accessibility, proximity to your target market, and the overall image it projects. If you opt for a remote setup, ensure you have a dedicated workspace that is quiet, comfortable, and free from distractions.
  • Equipment and Technology: Invest in reliable and up-to-date equipment and technology to support your business operations. This may include computers, software for financial planning analysis, secure data storage, printers, and communication tools such as phones and videoconferencing software.
  • Data Security: Protecting your clients’ personal and financial information is paramount. Implement robust data security measures, including encryption software, firewalls, and secure password protocols. Consider hiring an IT professional to ensure your technology infrastructure is secure and regularly updated.
  • Professional Software: Utilize financial planning software to streamline your processes and provide accurate and comprehensive analysis for your clients. Choose software that aligns with your business needs and supports the services you offer, such as retirement planning, investment management, and tax planning.
  • Compliance and Documentation: Familiarize yourself with industry regulations and compliance requirements. Establish a system to maintain and organize client documents, correspondence, and agreements. Implement compliance measures to ensure you are adhering to legal and ethical standards in your financial planning practice.
  • Administrative Support: Determine whether you will handle administrative tasks yourself or hire support staff to assist you. Administrative tasks may include scheduling client meetings, managing paperwork, bookkeeping, and handling inquiries. Consider outsourcing certain tasks or utilizing virtual assistants to free up your time and focus on client-facing activities.

Remember, the goal is to create an environment that promotes professionalism, efficiency, and client trust. Ensure your office is well-organized and visually appealing, with a comfortable seating area for client meetings. Consider branding elements such as logos, signage, and marketing materials to create a cohesive and professional image.

Lastly, don’t forget about insurance considerations. Protect your business assets, data, and liability by obtaining appropriate insurance coverage, such as professional liability insurance and general business insurance.

By setting up a well-equipped and organized office, you will create an environment that supports your financial planning practice and instills confidence in your clients. Strive for professionalism and efficiency to deliver exceptional service and build a strong foundation for your business.

Building a talented and reliable team is essential for the growth and success of your financial planning business. While you may start as a solopreneur, as your business expands, you may need to bring in additional resources to meet client needs and scale your operations. Here are some considerations for building your team:

  • Identify Roles and Responsibilities: Determine the specific roles and responsibilities needed within your financial planning business. This may include financial planners, investment analysts, administrative staff, marketing professionals, and IT support. Clearly define the job descriptions and expectations for each role.
  • Recruitment and Hiring: Develop a recruitment strategy to attract top talent. Consider posting job openings on job boards, utilizing professional networks, and working with recruitment agencies. Conduct thorough interviews and assessments to ensure you find individuals who align with your company culture and possess the necessary skills and qualifications.
  • Training and Development: Provide ongoing training and professional development opportunities for your team members. This will ensure they stay up-to-date with industry trends, regulations, and best practices. Encourage continuous learning and offer incentives for professional certifications or advanced degrees.
  • Collaboration and Communication: Foster a culture of collaboration and open communication within your team. Encourage brainstorming sessions, regular team meetings, and an open-door policy. Utilize project management tools and communication platforms to facilitate collaboration, particularly if your team is working remotely.
  • Evaluate Performance: Establish performance metrics and conduct regular performance evaluations for your team members. Provide constructive feedback and recognition for achievements. Address any performance issues promptly and offer support and resources for improvement.
  • Delegate and Empower: Learn to delegate tasks and responsibilities effectively. Trust your team members to handle their assigned tasks and empower them to make decisions within their areas of responsibility. This will not only increase productivity but also foster a sense of ownership and accountability.

It’s important to note that as your team grows, you will need to establish policies and procedures to ensure consistency and professionalism in your services. This includes setting clear expectations, establishing workflows, and implementing quality control measures to maintain service standards.

Building a strong team requires careful planning, effective communication, and a commitment to nurturing talent. By assembling a capable and dedicated team, you will enhance your business’s capacity to serve clients, manage growth, and achieve long-term success.

Establishing a clear and competitive pricing structure is a crucial step in running a successful financial planning business. Your pricing strategy should align with the value you provide to clients, cover your costs, and position your business in the market. Here are some key considerations when setting your pricing and fee structure:

  • Market Research: Conduct market research to understand the pricing landscape in your area and within your target market. Analyze what other financial planners with similar services and expertise are charging. This will give you a benchmark for setting your prices. Keep in mind that pricing can vary based on factors such as location, clientele, and specialization.
  • Value-Based Pricing: Consider implementing a value-based pricing approach, where you price your services based on the value and outcomes you deliver to clients. Focus on the benefits and results your clients can expect to achieve through your financial planning expertise. This approach allows you to charge higher fees if you can demonstrate significant value to your clients.
  • Fee Structure: Determine the fee structure that best suits your business and client needs. Common fee structures in financial planning include hourly rates, flat fees, retainer-based fees, and percentage-based fees (based on assets under management or investment performance). Consider the pros and cons of each structure and decide which one aligns with your business model.
  • Transparency: Be transparent about your pricing and fee structure with clients. Clearly communicate your fees and the services included in each package. Provide a breakdown of your services and the benefits clients can expect to receive for the fees they pay. Transparency builds trust and helps clients understand the value they will receive in exchange for their investment.
  • Consider Your Costs: Take into account your business’s operating costs and the time you will spend delivering your services. Factor in expenses such as office rent, technology, software subscriptions, staffing, and marketing. Consider your desired income level and the profitability of your business when setting your prices.
  • Flexibility: Consider offering tiered pricing or customized service packages to cater to varying client needs and budgets. Some clients may require comprehensive financial planning services, while others may only need assistance with specific areas. Offering different pricing options allows you to accommodate a wide range of clients while maximizing your revenue opportunities.

Regularly evaluate and adjust your pricing strategy as needed. Monitor the market, assess client feedback, and review your profitability to ensure your pricing remains competitive and sustainable. Keep in mind that pricing can be a delicate balance between attracting clients and maintaining profitability, so be mindful of making any necessary adjustments.

Remember, pricing is not just about the numbers; it’s also about clearly communicating the value you bring to your clients’ financial lives. By establishing a fair and competitive pricing structure, you will not only position your business for success but also communicate your expertise and commitment to delivering exceptional financial planning services.

A well-crafted marketing strategy is key to attracting clients and growing your financial planning business. Developing a targeted and effective marketing plan will help you reach your ideal clients, differentiate yourself from competitors, and build your brand. Here are some essential steps to create a successful marketing strategy:

  • Define Your Target Audience: Identify your ideal clients and understand their needs, preferences, and pain points. Clearly define their demographics, such as age, income level, occupation, and location. This will allow you to tailor your marketing messages to resonate with your target audience.
  • Brand Positioning: Determine how you want your financial planning business to be perceived in the market. Develop a compelling value proposition that differentiates you from competitors. Consider the unique qualities, expertise, and approach that sets you apart and craft a brand story that connects with your target audience.
  • Online Presence: Establish a professional online presence through a user-friendly and visually appealing website. Optimize your website for search engines with relevant keywords and provide valuable content such as educational articles, blog posts, and client testimonials. Utilize social media platforms to engage with your target audience and share valuable insights.
  • Content Marketing: Create high-quality content that demonstrates your expertise and provides value to your target audience. This can include blog posts, videos, podcasts, and downloadable resources such as guides or ebooks. Share your content through your website, social media channels, and email marketing campaigns to establish yourself as a trusted resource in the financial planning industry.
  • Referral Program: Leverage the power of referrals to expand your client base. Develop a referral program that incentivizes your current clients, professional contacts, and partners to refer new clients to your business. Offer rewards or discounts to those who refer new business your way.
  • Networking: Attend industry events, join professional associations, and participate in networking opportunities to connect with potential clients and referral sources. Build relationships with other professionals, such as attorneys or accountants, who may refer clients to you. Consider giving presentations or educational sessions to establish your expertise and generate leads.
  • Client Testimonials: Request testimonials from satisfied clients and showcase them on your website, social media profiles, and marketing materials. Authentic and positive feedback from past clients can provide social proof and build trust with potential clients.
  • Track and Measure: Implement tracking mechanisms to measure the effectiveness of your marketing efforts. Monitor website analytics, track leads generated from different marketing channels, and assess the return on investment (ROI) of your marketing campaigns. Adjust your strategies based on the data and insights gathered.

Remember, consistency and persistence are key in marketing your financial planning business. Regularly evaluate and refine your marketing strategy based on market trends, client feedback, and your business goals. Stay up-to-date with digital marketing trends and changes in consumer behavior to ensure your marketing efforts remain relevant and impactful.

By creating a comprehensive marketing strategy, you will increase your visibility, attract your ideal clients, and position your financial planning business for long-term success.

Networking and building relationships play a vital role in the success of your financial planning business. By connecting with others in the industry and building a strong professional network, you can gain valuable insights, generate referrals, and expand your client base. Here are some key strategies for effective networking and relationship building:

  • Attend Industry Events: Participate in conferences, seminars, and workshops related to finance, investments, and financial planning. These events offer opportunities to learn from industry experts, stay updated on the latest trends, and connect with like-minded professionals.
  • Join Professional Associations: Become a member of professional associations such as the Financial Planning Association (FPA) or the National Association of Personal Financial Advisors (NAPFA). These associations provide networking opportunities, educational resources, and access to a community of financial planning professionals.
  • Volunteer: Offer your expertise and time to nonprofit organizations, community groups, or educational institutions. Volunteering not only allows you to give back to the community but also provides networking opportunities and helps you establish yourself as a trusted professional in the field.
  • Engage on Social Media: Utilize social media platforms to connect with industry professionals, share valuable insights, and engage with your target audience. Join relevant groups and participate in discussions to expand your network and visibility within the financial planning community.
  • Build Strategic Partnerships: Seek out professionals who complement your services, such as accountants, attorneys, or insurance agents. Establish mutually beneficial partnerships where you can refer clients to each other. This not only expands your network but also enhances your credibility and provides comprehensive solutions to your clients.
  • Host Workshops or Webinars: Organize educational workshops or webinars on financial planning topics to showcase your expertise. These events not only position you as a thought leader but also provide an opportunity to connect with potential clients and generate leads.
  • Nurture Relationships: Cultivate relationships with clients, professional contacts, and industry peers. Stay in touch with past clients through regular communication and periodic check-ins. Maintain a database of contacts and utilize customer relationship management (CRM) tools to manage and nurture your relationships.
  • Be a Resource: Offer value to your network by sharing helpful resources, information, and insights. Provide educational content through your blog, social media platforms, and email newsletters. By positioning yourself as a valuable resource, you will establish trust and credibility with your connections.

Networking and relationship building require genuine effort, time, and consistent engagement. Focus on building meaningful connections, rather than simply collecting business cards. Be authentic, listen actively, and show genuine interest in others.

Remember, successful networking is not just about what you can gain, but also about how you can contribute and add value to others. By fostering relationships within the financial planning industry, you will create opportunities for collaboration, professional growth, and business expansion.

Providing excellent client service is the cornerstone of a successful financial planning business. Satisfied and loyal clients not only become advocates for your services but also contribute to the long-term growth of your business through referrals and repeat business. Here are some key strategies to ensure you deliver exceptional client service:

  • Develop Strong Relationships: Build trust and rapport with your clients by establishing open and transparent communication channels. Listen attentively to their goals, concerns, and aspirations. Foster a personalized approach that demonstrates your genuine care for their financial well-being.
  • Understand Client Needs: Take the time to understand your clients’ unique financial situations and objectives. Conduct thorough fact-finding interviews and gather relevant information that allows you to tailor your financial planning services to their specific needs. Regularly reassess and adjust their financial plans as circumstances change.
  • Educate and Empower: Empower your clients by educating them on financial matters and explaining complex concepts in simple and understandable terms. Provide them with the knowledge and tools to make informed decisions about their finances. Foster a collaborative approach that involves them in the financial planning process.
  • Deliver Timely and Accurate Information: Be prompt and responsive in your communication with clients. Address their queries and concerns promptly, and follow up on action items in a timely manner. Provide accurate and transparent information in all client interactions.
  • Regularly Review Progress: Schedule regular meetings with your clients to review their financial progress and make necessary adjustments to their plans. Keep them informed about market trends, changes in regulations, and any potential impact on their finances. Provide performance reports and updates on the status of their financial goals.
  • Continuing Education and Professional Development: Stay updated with the latest developments in the financial planning industry. Pursue continuing education opportunities, attend seminars and conferences, and maintain relevant certifications. By expanding your knowledge and expertise, you can provide even better service to your clients.
  • Communicate Changes and Updates: Proactively communicate any changes in your services, fees, or business operations to your clients. Keep them informed about market updates, investment strategies, and any relevant regulatory changes that may affect them. Clear and transparent communication fosters trust and demonstrates your commitment to their financial well-being.
  • Solicit and Act on Feedback: Regularly seek feedback from your clients to assess their satisfaction and identify areas for improvement. Actively listen to their suggestions and concerns and take appropriate actions to address them. Regular client feedback surveys or informal feedback sessions can provide valuable insights for enhancing your client service experience.
  • Go the Extra Mile: Surprise and delight your clients by going above and beyond their expectations. Offer personalized touches, such as sending birthday or anniversary greetings, providing helpful resources, or organizing exclusive client events. Small gestures can make a big impact and reinforce your dedication to exceptional client service.

Remember, every client interaction is an opportunity to showcase your commitment to their financial success. By consistently delivering excellent client service, you will build long-lasting relationships, foster client loyalty, and position yourself as a trusted financial advisor.

Congratulations on completing the ten essential steps to start your own financial planning business! By following these steps, you have laid a strong foundation for success in the dynamic and rewarding field of financial planning. Remember, starting a business requires dedication, continuous learning, and a commitment to providing excellent service to your clients.

Throughout this journey, you have defined your services, determined your target market, developed a comprehensive business plan, obtained necessary certifications and licenses, set up your office and infrastructure, built a talented team, established your pricing and fee structure, created a marketing strategy, networked and built relationships, and committed to providing excellent client service.

As you embark on this new venture, remain adaptable and open to new opportunities and challenges. The financial planning industry is constantly evolving, and staying ahead requires a proactive approach and a commitment to ongoing professional development.

Continue to expand your knowledge, seek mentorship, and engage with industry peers. Embrace technology and leverage digital marketing channels to enhance your visibility and attract clients. Invest in building relationships, both within the industry and with your clients, as these connections will contribute to the growth of your business.

Remember, success doesn’t happen overnight. It requires dedication, perseverance, and a commitment to continuous improvement. Stay focused on delivering exceptional service, exceeding client expectations, and adapting to the changing needs of your clients.

With the right skills, expertise, and a passion for helping others achieve their financial goals, your financial planning business has the potential to thrive. By providing valuable insights, strategic guidance, and personalized financial solutions, you can make a significant impact on the lives of your clients and create a rewarding and fulfilling career for yourself.

Best of luck on your journey as a financial planner, and may your business flourish in the exciting world of financial planning!

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How to Grow Your Financial Advisory Business

There’s nothing wrong with wanting a lifestyle practice, but growth is a primary goal for many financial advisors. It could be that you want to grow to a point where you can have a lifestyle practice, or maybe you enjoy the work of building up your business. Maybe you want to leave a healthy financial advisory practice to your successor. 

Whatever the reason, you’re interested in acquiring more, better-fit clients and growing your assets under management (AUM). You've seen the success of other advisors, like:

  • Kyle Hart of RIA Coastal Wealth Planners, who achieves upwards of a 50 percent open rate when emailing the over 500 investors that subscribe to his email list.
  • Josh Brown and Barry Ritzholt of Ritholtz Wealth Management, whose social media followers numbers in the 100s of thousands and blog posts number in the tens of thousands .
  • Rick Kent of Merit Financial Advisors, whose digital marketing machine is contributing to a 25 percent growth rate.

Those numbers are impressive, but they don't mean much if you don't know where to start. That's why we're going to explore how to grow your financial advisor business.

The #1 Thing to Avoid: Yo-Yo Marketing

Most financial advisors have a business as a side effect of their true passion—helping their clients achieve financial wellbeing. But business demands persist nonetheless.

As a result, financial advisors tend to only pay attention to their business when its demands are particularly dire—maybe the client base has or is threatening to shrink, or maybe an important client has reduced the assets placed under your management. Suddenly, you’ve been made aware of the need to bring in more clients, so you put aside your regular duties for a short time in order to dedicate time to a marketing campaign.

Maybe you do a few webinars, attend a few networking events, send out some email blasts. Some new clients come in, and the business seems like it’s in better shape than it was a few months ago. You might think, “Glad that’s over,” and get back to devoting 100% of your attention to client outcomes.

Only, you’ll have to go through it all over again a few months or a year later. Somehow, despite your intense efforts at marketing during this time, your practice never seems to grow. 

It’s called yo-yo marketing —you spend a lot of time going back and forth but never seem to actually get anywhere.

What to Do Instead

How to grow your financial advisory business in a sustainable way? Take your time. 

There is no need to engage in rapid-fire bursts of marketing activity. As intensive as those bursts may be, marketing campaigns have momentum. Starting and stopping burns up a lot of energy, while slow and steady effort can build up over time.

Take three or four hours every week to stop being a financial advisor and start being a marketer instead. During that time, your job isn’t to guide your clients’ financial futures but to prospect, find leads, build creative campaigns, and attract the people who could benefit from your business the most.

It isn't always easy to carve out another three or four hours every week, however. When they're not attending to their clients, modern advisors' time is often eaten up by administration, portfolio management, and other back-office tasks. One way to gain the time needed for business development activities is to outsource some of these more transactional tasks. In fact, an AssetMark study found that advisors who outsourced investment management saved 8.4 hours a week—more than enough to engage in consistent, meaningful growth practices like marketing.

Another option is to hire a professional to do all the marketing work for you. They’ll be an expert in growing businesses and, if you find the right person, an expert in growing financial advisory practices in particular. That way, you won’t have to experience the whiplash from yo-yo marketing ever again.

Learn how AssetMark can make a difference in your firm's business performance.

3 Essential Elements to Keep in Mind

In your slower, steadier market efforts going forward, you’ll want to keep these three key takeaways in mind.

1. Marketing Takes Time

In marketing, execution is often instantaneous—you’ll send out emails, conduct a webinar, write a blog—but the results are almost always delayed and are often difficult to quantify.

This is why the slow but steady approach is the right one. It’s unlikely that someone is going to get in touch with you right after you wrap up a webinar. But a few months down the line, they might hear something that reminds them of you; maybe their circumstances are different now, and they’re ready to take on your services. Or, maybe they mention having attended your webinar to a colleague, and perhaps they’re the one to seek you out. 

However the results are realized, it takes time for your prospects to decide whether you’re the right financial advisor for them or not.

2. You Should Enjoy Whatever It Is That You Do

If you don’t like public speaking, then don’t do a webinar just because one of your peers had great results. There are a number of ways to market your practice—pick an approach that you like the most and highlights your specific expertise. 

Not only will it make it more likely that you’ll apply the consistency that makes marketing efforts truly successful, but your audience will notice, too. A nervous or disengaged speaker in a webinar won’t be as engaging, impactful, or memorable as an insightful and well-written article.

If you don't know where to start, consider marketing tactics like:

  • Blogging : When optimized around a keyword, blog articles can be a great source of leads to your business. So long as you write articles focused on answering the questions your prospects are searching for, your blog can continuously attract new leads to your website.
  • Email marketing : Reaching out to your prospects' inboxes can be a powerful way to attract new leads. In fact, one study found that a full 69 percent of new leads came to advisors via email marketing.
  • Podcasts : Like blogs, once you've created a podcast episode, it continues to generate leads while you sleep. It's also an excellent way to create source material for blogs, emails, and other marketing collateral.
  • Webinars : If you enjoy presenting, webinars can help you strengthen your relationship with existing clients, drive referrals, and generate new leads for your business—that is, if you follow up with your registrants after the webinar is over.

This is by no means an exhaustive list of marketing tactics, and you don't need to stick to just one (nor should you). Rather, it's meant to demonstrate that there are a variety of ways that you can market your business, and that you should focus on the approach that you enjoy the most. You can even focus your other marketing efforts around that favored approach. If you really enjoy public speaking, for instance, then it could be beneficial to build a webinar series. Then, rather than brainstorming blog topics or content for your email newsletter, you can include key takeaways from your webinar.

3. Most Importantly: Track Your Efforts

While marketing takes time to yield results, you won’t recognize those results if you’re not tracking and measuring your efforts.

To set yourself up for success, establish a business plan prior to launching your marketing efforts. As part of this plan, you’ll define your desired goal (e.g., growing AUM by 15% next year) as well as your key performance indicators (or KPIs; e.g., number of new contacts, new clients onboarded, net promoter score, etc.) Keeping track of your KPIs will alert you to whether you’re on track or whether you need to tweak your approach.

Of course, in order to measure your efforts, you need something to measure. This doesn’t just have to be limited to hard data, such as the number of new contacts in your database or growth in AUM. You could, for instance, solicit feedback from attendees to see whether they found your recent webinar engaging and informative. You could ask your current clients how they found you and whether they consumed any resources on your website before deciding to hire you. With the right mindset, you can find actionable information in all sorts of places.

Putting It Into Practice

Learning how to grow your financial advisor business is just the beginning; now you actually have to put that knowledge to work. Of course, that’s easier said than done.

You may find that even though you intend to set aside a few hours every week to make consistent effort, obstacles seem to consistently prevent you from doing that.

Unexpected business needs might arise, life events might throw a wrench in your plan, or you might simply not have the extra energy to dedicate to consistent marketing efforts. If any of that is the case—or if you simply want the advice of someone who’s been there before—don’t hesitate to reach out to AssetMark’s team of experienced consultants for assistance.

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The Five Stages Of Growth In A Financial Planning Firm

February 10, 2014 07:01 am 7 Comments CATEGORY: Practice Management

Executive Summary

As the world of financial advice continues to grow and evolve, advisory firms are increasingly going through a series of consistent stages in the growth of their firm. There's a start-up phase with rapid growth, followed by a capacity "wall" where the individual advisor just can't handle any more clients. The capacity wall is cleared by converting from a solo advisory firm into a multi-advisor ensemble, with years of potential continued growth as the firm reinvests into its infrastructure. Eventually, though, the ensemble practice hits another wall, as the sheer size of the firm is so large that even the collective efforts of all the advisors and partners is not enough to sustain its growth rate, leading to the fifth and final phase: the establishment of a brand and truly scaled marketing.

What's significant about this progression is not just the fact that the growth pattern happens so consistently, with a series of faster and slower growth phases, but that the walls occur at consistent points as well, and require an able-to-be-anticipated series of steps to navigate them and reach the next stage. In practice, these stage nuances may be masked by the tailwind of market returns (or the headwind of a bull market), which  provide an additional level of volatility to an advisory firm. Nonetheless, by focusing on the underlying organic growth rate of new clients and asset flows, the pattern remains clear.

Ultimately, advisory firms that recognize the stages of growth will be best positioned to navigate the inevitable walls that come. But the real challenge of this landscape is to recognize that the firms in the last stage of growth may actually be the best positioned of all, potentially putting a "growth squeeze" on the wider base of smaller advisory firms still struggling to reach the next stage. For those firms that are smaller and wish to stay that way, it will still be possible to enjoy a profitable lifestyle practice. But those in the middle stages may need to navigate carefully, or risk being unable to get past the final growth wall. And in the long run, the largest firms with a visible brand and scaled marketing may actually grow so large and effectively, that it begins to change the growth landscape itself in the future!

Michael Kitces

Author: Michael Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth , which provides an evidence-based approach to private wealth management for near- and current retirees, and Buckingham Strategic Partners , a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network , AdvicePay , fpPathfinder , and New Planner Recruiting , the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com , dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

The inspiration for today's blog post comes from a recent realization that I've had in talking to so many advisors over the years that advisory firms go through an incredibly consistent series of growth stages, with a number of highly 'predictible' growth walls. The first occurs when the advisor tries to transition from an individual solo practitioner to a true business that extends beyond the individual founder alone. The second occurs when the advisory business tries to grow beyond being just a conglomeration of its ensemble members and into a true enterprise with scaled marketing and a recognized brand. These stages are reflected in the graphic below.

The Five Stages Of Growth

Graphic - Five Stages Of Growth in a Financial Planning Firm

Start-Up Phase

The start-up phase is the beginning of any financial planning firm. It's about bringing in the first clients, getting enough revenue to have sufficient take-home pay to be viable and earn a living. Given the 'failure' rate of the industry, many advisors don't even manage to attract enough clients - or do so quickly enough - to 'survive' in the first place. For those who do make it past the initial start-up phase, the advisory firm can become quite financially rewarding, especially with today's tools and technology that allow for incredible efficiencies and leveraging of an individual's productivity.

Nonetheless, as the focus of work shifts from bringing in new clients to servicing the ones that are now on board, the growth rate begins to slow and plateau. For the largest of practices in the start-up phase, an administrative staff member or two may come on board as well, to allow the firm to grow a bit further. Outsourcing activity may increase as well, as the advisor tries to focus his/her "unique talents" ( a la Strategic Coach ) and delegate the rest (whether it's outsourced planning or outsourced operations ; this is often the point at which we see advisors interested in outsourcing investment management with our Pinnacle Advisor Solutions offering as well).

But ultimately, the first wall is reached: the advisor hits full capacity.

Capacity Wall

For many practice management consultants to financial advisors, the individual capacity limit is known as "the wall", and any individual advisors will eventually hit it as they reach the sheer limits of what one person can manage, even with some technology, efficiencies, and support staff. For highly inefficient practices, the wall can come as soon as $150,000 - $250,000 in revenue. For most advisory firms, it seems to come somewhere between $300,000 and $500,000 in revenue (or similar revenue-per-partner levels in a multi-advisor partnership). As we see from the Moss Adams benchmarking studies , even the top performing solo advisors are barely over half a million in revenue. They've hit capacity; they're at the wall.

In an advisory firm, climbing over the capacity wall requires hiring staff - specifically, junior financial planners who can service and eventually take over client relationships. (Ideally, hired before the wall is actually hit so there's time to get them up to speed and smooth out the growth path, although in practice most advisor clients we see in our New Planner Recruiting offering have already hit the wall.) The decision to hire a professional planner staff member represents the fundamental dividing line between highly efficient solo practitioners, and the formation of an actual business that begins to craft economic value beyond just the capacity of its founder/owner. Notably, this is a line that many advisors choose never to cross - given how incredibly profitable a productive solo practitioner can be, there's not necessarily a need to move beyond the capacity wall (unless the goal is truly to build a large saleable business), and many advisors choose to remain as 'lifestyle' practices.

Ultimately, getting past the capacity phase requires a significant reinvestment back into the business, hiring professional advisor staff who can ultimately increase the capacity of the firm and help it to continue to grow beyond the wall.

Building Infrastructure

The infrastructure stage of growth is often one of explosive growth in business value. As the ability to generate revenue and profits extends beyond the founding owner(s), the advisory firm begins to be less about just the revenue and income of the owner, but the revenue, expenses, net profits, and saleable economic value of the business as a business.

As the name implies, the infrastructure phase of an advisory firm's growth is all about continuing to build the infrastructure and capacity of the firm. A junior planner turns into a team of junior planners. A founding owner begins to add/promote/take on partners, transitioning from a founder-centric business into an ensemble practice. To the extent they're not outsourced, the client service team gets deeper, the investment team gets deeper, the firm hires a manager to handle all the staff (and eventually a COO to manage the firm), along with the firm's first hires for internal technology support and marketing. In essence, the infrastructure phase is a series of mini-walls that the firm continues to surpass by ongoing reinvestment into the depth of staff and infrastructure itself.

In the meantime, as the client base grows, a larger and larger number of clients are available to provide referrals. The firm becomes more credible in its local market, and begins to craft (additional) referral relationships with centers of influence. And the growing number of partners and advisors expands the firm's capabilities to generate new clients from all directions. The value of the business as an entity grows significantly far beyond what the founder alone could have achieved as an individual.

Until, eventually, the next wall is reached: the firm becomes so large, not even all of these efforts together can sustain its growth rates.

The "size wall" in larger advisory firms stems from the recognition that as the business grows larger, eventually the marketing and business development practices that got it there simply cannot sustain at the same rate given the sheer mass of the firm. Given that the growth rate is a fraction, where the numerator is new business and the denominator is the current size of the existing firm, eventually the denominator becomes  so  large that the growth rate can't help but decline.

For instance, a firm with $10M of AUM and an average household of $500k has 20 clients. In order for it to grow by 20%, it needs 4 new clients a year, or one per quarter (4 clients x $500k = $2M of new assets / $10M of AUM = 20% growth rate). A firm with $100M of AUM and the same average household, though, now has 200 clients and needs 40 new clients, or more than 3 per  month to sustain the same growth rate. This is why firms often go "up market" and raise their minimums - at a higher average revenue per client, the numbers aren't as daunting, as getting 20% growth with millionaires will 'merely' require 20 new clients (5 per quarter) rather than 40 (over 3 per month!). As the firm continues to grow, the challenge continues, though; at $200M of AUM even with a $1M average household, the firm once again need more than 3 new millioniare  clients per month just to sustain its growth. While firms build out their infrastructure, the pace of client growth can accelerate, but at some point the denominator of the growth fraction just becomes overwhelming; at $1B of AUM and an average $1M household, there are 1,000 clients, and now the firm requires 200 clients, or about 4 millionaires  per week to sustain its growth rates. In the short term firms may go up-market and try to raise their minimums to sustain the growth rate, but eventually as firms reach an ever-larger size, the growth rates slow. It's the size wall.

The reasons for the size wall are plentiful. For a firm that has been in place long enough to grow to such a size, a large portion of the client base has already fully tapped its network for referrals (how many more referrals can really come from clients who've already been referring for 10+ years?), and only a small portion of clients are actually "new" enough (perhaps the first 1-5 years with the firm?) to still have a lot of prospects to refer. The center-of-influence referrals may be coming at the same pace, but the half-a-dozen-per-year referrals that were a healthy contributor to growth at $50M or even $200M don't even cover two weeks' worth of growth at $1B of AUM. Many of the advisors in the firm may be reaching their own individual capacity, where they're not pushing their individual growth anyway. And to say the least, the growth requirements far exceed what a handful of partners/founders alone can sustain.

In the end, the size wall for larger advisory firms is more dangerous than the capacity wall for small firms, because the sheer size of the business makes it impossible to simply shift to a low-growth "lifestyle" model, as the lack of opportunities that growth brings may lead to rising staff turnover (as I've noted in the past, "growth" itself forms the basis of a viable career track to attract and retain employees at most firms, and a lack of growth results in a lack of career path ). In addition, the number of clients makes even small percentages of client attrition a significant loss of revenue (at $1B of AUM, losing "just" 3% of clients is a loss of $30M of AUM and a whopping $300k of revenue at 1% management fees!).

G etting past the size phase requires the firm to reinvest once again, and convert itself from a conglomeration of individual advisors and an ensemble of partners into a standalone branded firm that can truly scale its marketing efforts as an enterprise. As with the capacity wall, the size wall requires a very significant investment - relative to the size of the firm - to advance itself to the next stage.

Scaled Marketing

The final stage of growth for advisory firms is when the marketing of the firm overall becomes truly scaled, built around a centralized brand that can be supported by a dedicated marketing department, and the business develops real value as an enterprise. The leading example in this category is probably  Edelman Financial Services, which added a whopping 4,000(!) clients last year  leveraged through Edelman's books, radio and TV appearances, and seminars. Other notable mega-RIA examples working through this stage include Joe Duran's United Capital and their Honest Conversations program , Steve Lockshin's  Convergent Wealth Advisors , Ron Carson's Wealth Management Group and Peak Advisor Alliance , and Buckingham Asset Management with their consumer media personalities Larry Swedroe, Carl Richards, and Dan Solin.

Although the details of their marketing and growth strategy vary - some build around a branded public persona, others around a niche clientele, and still others by acquiring or attracting advisors to work under their umbrella - the fundamental point to all of them remains an effort to build a scaled marketing effort that will allow them to maintain and even accelerate growth, despite the sheerly huge number of new clients it would require. Yet for the firms that succeed, the prospective rewards are enormous; as noted above, Edelman's firm alone added more than 4,000 clients last year, with his enterprise alone trumping the growth of dozens or even hundreds of individual advisors.

The end point of this stage is that the largest firms that manage to scale their marketing and attract clients at a  lower  cost than smaller firms, reaching a point of "marketing inequality" where the largest firms actually grow even larger and increase their market share while the smaller firms are stuck small . In fact, arguably it's the largest firms that figure out how to scale their marketing which have the greatest growth potential, because they are able to truly benefit from the efficiencies of marketing scale that bring down  the client acquisition costs that are the greatest growth barrier for most firms . In essence, this is the rise of the "mega firm" and national brands predicted in the various issues of Mark Hurley's often-criticized-but-slowly-becoming-true vision of a world with a small number of large firms at the top and a wide base of small advisory firms that struggle to be profitable or grow at all. And these are entities that create a significant enterprise value.

Reflecting On The Five Stages Of Growth

Ultimately, advisors exist across the full range of the five stages of growth. And as noted earlier, continuing to grow through each stage is not  necessarily an imperative, especially for advisors that are still in the "individual" stage and can become a comfortable and highly profitable "lifestyle" practice, deliberately finishing their growth at the capacity wall.

Firms that push through the individual phase into the business phase, though, raise the stakes for themselves. While it's feasible to convert an individual practice into a lifestyle, it's not really feasible to do so as a multi-advisor ensemble practice, both because different partners may have different growth goals and aspirations, and because even if the partners become content with the size of the business, the odds are low that all of the underlying staff infrastructure will be similarly content, which raises the risk of increasing staff turnover that can eventually undermine the value of the business, or collapse it entirely. Thus, while growth for an individual can be done, or not, for the individual's sake, growth for a business becomes a necessary imperative for its own sustainability.

On the plus side, the end point of continued growth, and overcoming the size wall, is the potential to build an enterprise with extraordinary business value, which is the compensation embedded in the risks that are present for failing to do so and getting stuck behind the wall. In fact, many of the largest advisory firms are achieving such scale and efficiencies with their new client growth that they seem to even be out-competing firms from all the prior stages, raising the question of whether the landscape for advisory firm growth itself will shift in the coming years as more and more firms make it into the final stage. We'll see.

So what do you think? Where does your firm lie in the stages of advisory firm growth? Are you hitting one of the walls? How did you get past the last wall? How are you preparing for the next wall that may come? 

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February 10, 2014 at 9:16 am

If you think about that growth curve, the nature of investment decision making changes as an organization is being built. Perhaps the biggest challenges occur before the capacity wall is hit, because few single practitioners have the combination of time and skill to be able to deal with the range of investment issues that they confront. But, even as they grow big and profitable, advisory firms often neglect building a proper investment infrastructure. One aspect of the maturation process is embracing that need and creating a true investment organization as well as an advisory one.

growing financial planning business

February 10, 2014 at 9:23 am

Tom, Indeed, I think there are a lot of ‘predictable’ investment decision-making process changes that occur through this growth curve as well.

I find for many, the capacity wall is where many first choose to outsource, acknowledging that it’s not a core competency for them.

For those that retain the investment decision-making process past the capacity wall, the expansion of infrastructure usually results in the formation of an investment team/committee, to broaden the investment workload and (hopefully) deepen the firm’s investment resources, but in the process introduces new challenges and potential dysfunctions around the actual decision-making process of a team/committee approach versus a solo founder/owner.

Ultimately, at the upper end of infrastructure and certainly in the scaled marketing phase, I find there’s often – though not always – a complete dissociation of the typical advisor within the firm and the firm’s investment process, as the investment function is fully taken over by dedicated team/staff and the advisor becomes primarily responsible for discussing and reporting results, and matching portfolio models to client needs/goals and risk tolerance, but without any actual “hands-on” role of the advisor in the portfolio. – Michael

growing financial planning business

February 11, 2014 at 1:45 pm

When you use the term outsource for the investment piece of an advisory practice, would you typically be referring to a TAMP. Loring Ward, Symmetry, SEI? I’ve wrestled with using a group like this and the issue that i usually have is the extra fee to the client. Most firms charge at least .5% to the client, so either the client’s fees will go up or my fee must go down. Just curious if these are the types of groups you are referring to when you mention outsourcing and if you any thoughts on overcoming the extra fee, I know your firm has some level of this outsourcing function as well.

growing financial planning business

February 10, 2014 at 9:43 am

Enjoyed reading this. Stages give people benchmarks.

While I use different terms, I’d add Stage 6 – Legacy — Usually legacy of the original owner and how they’ll leave the firm. Even after that happens, there will be other stages, based on the new owners. Kinda like a spiral, ever changing (for the good, hopefully).

Although I wish the stages were cut/dry, often the strengths, life goals, weaknesses, and/or control issues of the owners add or throw a wrench into the mix.

Within each stage of business — even the solo-practitioner stage (your start up stage) — there is always a dance of sorts going on in which one of the three p’s needs the most attention. In the new solo-practitioner stage the profit that comes from servicing clients is first in mind followed by people (part-timers and consultants of various sorts) followed by processes.

Micro-business it’s usually people, then processes, and while profit is there, the other two p’s need attention so that profit continues.

growing financial planning business

February 10, 2014 at 6:19 pm

Thanks so much for writing this. I am a solo advisor generating 1.7M in annual revenue with 90 clients and really starting to think about how to scale in the future (hiring, outsourcing, both…). I am in my early 40s. In my annual business planning I am thinking more about what you call the capacity wall. My desire is to maximize the solo model and there are fewer and fewer advisors whove been where i’m going with the solo model for me to learn from. Your post is a good description for scaling. Thank you!

February 11, 2014 at 3:22 am

Mike, Thanks for sharing!

Honestly, at $1.7M of revenue you’re already doing FAR more revenue than almost any other solo practitioner I’ve met over the years.

On the other hand, by client capacity, your numbers sound dead-on. I find most advisors seem to top out at 75-100 active client relationships (and if the relationships are more complex the ‘soft cap’ tends to be even lower). So from that benchmark, it sounds like you’re coming right up to the capacity wall (albeit with an average of more than $20,000 revenue per client so your total revenue numbers are well above average)! – Michael

February 11, 2014 at 8:33 am

Michael, do you think that some of these scaled firms such as Edelman, Mutual Fund Store, Fisher, reached these pinnacle levels of growth due to their scaled marketing early on? Edelman and MFS both have strong public awareness brands that seem to have grown to this size because of their brands. In essence, they got to the scaled level because of scaled marketing earlier than the 5 stages may suggest. Thanks so much for insightful articles.

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How to Start a Financial Advisor Business

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12 Steps to Starting a Financial Advisor Business

How big is the financial planning & advice industry, what are the key sectors of the financial planning & advice industry, what external factors affect the financial planning & advice industry, who are the key competitors in the financial planning & advice industry, what are the key customer segments in the financial advice market, what are the typical startup costs for a new financial advisor, what are the key costs to launching a successful financial planning firm, is a financial advisor business profitable, what type of financial advisor business model should i choose, what are the keys to launching a new financial advisor business, starting a financial advisor business faqs, other helpful business plan articles & templates.

A financial planning firm is a company that provides financial advising and planning services to individuals and businesses. Financial advisors offer advice on managing investments, insurance, mortgages, and other financial matters. If you’re looking to start your independent financial planning firm, there are a few key things you need to know. 

In this article, we’ll walk you through the process of starting your own financial planning firm and provide tips for launching your business.

Importantly, a critical step in starting a financial planning business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Financial Advisor Business Plan Template here .

Download our Ultimate Financial Advisor Business Plan Template here

1. Figure out your Niche

The financial and investment advisor industry can be very competitive, so you have to find a way to set yourself apart from the rest of the investment advisers out there. Find your niche, and focus on it.

A few niches include:

  • The “mass affluent,” which is a financial services market made up of individuals with investable assets between $100,000 and $1 million.
  • Retirees who have accumulated savings that they can’t afford to lose in a volatile market

2. Choose an Investment Management Style

Once you’ve identified your niche, it’s time to choose a method of financial planning you’re going to focus on. Here are the most popular styles:

  • Asset management – focuses on how much money a client can save in a given year, and helps them budget accordingly
  • Wealth preservation – works with clients to ensure their assets are being protected from market volatility and inflation
  • Income planning – focuses on a client’s long-term financial stability, helping them create a sustainable income flow
  • Consultative sales – offers a wide range of services for large fees that can be covered through loans or investments

3. Consider your Target Audience

Next, think about who you’re targeting. Your ideal audience will be the clients that value your services the most and are more likely to pay for them.

Some things to consider when choosing a target audience include:

  • Geography – where do they live?
  • Age – will they need financial education or wealth preservation services?
  • Wealth – how much money do they already have?
  • Occupation – are they educated professionals, or are they self-employed?
  • Gender – how will this affect your financial advisor marketing strategy ?

      BONUS: Access the “How to Start a Financial Advisor Business” Course Here 

4. find your competitors.

Now it’s time to find out what your competition is up to in the financial advisory industry. Think about whom you’re going after and which companies offer services that might compete with yours.

5. Get your Business Plan in Order

Once you’ve set up your niche, chosen an investment style, identified your target audience, and found out what your competition is doing, it’s time to create a financial planner business plan for success.

To enhance your planning process, incorporating insights from a  sample financial advisor business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include:

  • A general description of the company
  • The services you will offer
  • A description of the market you plan to target
  • How you will attract clients and get them to pay for your services
  • A financial summary of how much money you need to start a successful business

Be sure to include all of this information in a well-thought-out plan that will help you get funding from investors and convince clients that your financial services are the best choice.

6. Secure Funding for Startup Costs

The nature of a financial advisor business means you will need funding to provide initial marketing, advertising, and operational costs. This is generally done through personal investments by the founders or loans from local banks or other institutions interested in lending money to small businesses.

To get outside funding for your business, follow these steps:

  • Conduct market research to find potential investors and lenders
  • Get referrals from clients or other financial planners you know of in the industry who have already received loans or investments
  • Create a list of possible lenders and investors you want to approach with your business plan
  • Create an advertising plan to show how you will attract clients and make money for your business

Be prepared to answer questions about your financial services, your target audience, and the market in general; also be ready to explain how much startup funding you need and what it will be used for.

How to Finish Your Financial Advisor Business Plan in 1 Day!

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With Growthink’s Ultimate Financial Advisor Business Plan Template you can finish your plan in just 8 hours or less!

7. Start Marketing Yourself

Now that you have a financial planner business plan in place, it’s time to start marketing yourself. Begin by creating an online presence and using the Internet to attract potential clients for your services. You can start with these things:

  • A website with specific information about your services, fees, and target market
  • A social media presence on Twitter, Facebook, LinkedIn, etc. to help you promote your business online
  • Blogs related to comprehensive financial planning that allow you to include links back to the main website for clients or potential clients to see

Once you’ve started to build your online presence, start building relationships with other financial advisors in the business. Hang out in chat rooms or forums where they’re already congregating and offer advice whenever possible. This establishes you as an expert in the field to people who might need your services later on.

Building a name for yourself will take time, but starting a financial advisor business is rewarding and you’ll soon find yourself with plenty of new clients.

8. Develop an Elevator Pitch

An elevator pitch is a 30-second explanation of your financial advisor business that you can use to introduce yourself to potential clients. Your investment advisor elevator pitch should highlight the unique aspects of your Financial Advisor business and immediately communicate what makes you stand out from other financial advisors in your Financial Advisor niche.

Focus on capturing attention as soon as possible. Your elevator pitch should be simple and straight to the point; you want your clients to remember what sets you apart from other financial advisors, not a long speech about how great you are.

Pitch yourself at networking events and financial advisor business startup seminars.

9. Create your Client Acquisition Plan

Once you’ve built up an online presence, it’s time to create a client acquisition plan that will help you meet your goals for getting new clients and start bringing in money. To develop this plan, identify your ideal client and decide how exactly you will attract them to your business:

  • What types of clients do you want? What’s the best way to reach them through online and offline marketing?
  • What about referrals from other local financial advisors or people currently using your services? How will you get more referrals to grow your business even faster?
  • How will you make your clients want to spend their money and come back for more services?

Once you’ve identified the right clients and found the best way to attract them, it’s time to start filling those client coffers. You’ll be surprised at how much business can grow from word-of-mouth referrals alone, so don’t hesitate to ask satisfied clients for a referral whenever possible.

10. Work on Client Retention

A happy client is a client who will come back for more services and tell their friends about your financial planning firm. You can stay in touch with clients through digital or paper newsletters, phone calls, text messages, social media, email blasts – whatever works best to keep you at the forefront of their minds.

The first sale is always the hardest, but after that client has purchased a service, you’ll find it much easier to sell them other services down the road. To start this process, create a basic financial plan for your clients; take time to sit down with each of them, identify their needs and goals, and develop an investment strategy that makes sense for their current financial state. You can also offer services like estate planning, tax preparation, and insurance to give your clients more options when they’re ready to expand their financial portfolios.

11. Achieve Success by Setting Goals and Measuring Results

Setting goals is one of the most integral parts of operating a successful business, so it’s important to set clear, attainable goals for your financial advisor business. For example, if you want to grow your client base by attracting ten new clients in the first month of operation, start with smaller goals like attracting five or three new clients and work up from there so you know what to expect throughout the process.

Once you’ve set your initial client goals, develop a strategy for how you’ll measure your progress. Set up Google Analytics or another program to track how many people visit the website and social media presence of your financial planning firm so you can see which sources bring in the most traffic and clients. This will help guide future marketing efforts and help you see what’s really working when it comes to promoting your financial planning business.

12. Get the Training and Licenses You Need to be Successful

Financial advisors are governed by strict legal and ethical standards, so it’s important to get enough training to stay in compliance with both local and federal laws. While many states allow financial planners to operate under their own licenses (and sometimes without any license at all), other states require financial planners to have a license from the Series 65 exam. If you live in one of these regulated states, be sure that your education and experience meet the standards set forth by the state: Finra .

    Want to Start a Successful Financial Advisor Business?

The financial services industry is growing at a rapid pace and continues to grow despite the recent economic downturn. The industry is worth over $59.2 billion and is expected to grow by 4% every year over the next decade.

The financial services industry is made up of five main sectors:

  • Personal Financial Planning and Investment Services – The business of helping individuals make investment decisions along with managing their investments, such as retirement accounts such as 401(k)s and IRAs, stocks or bonds, mutual funds, and retirement savings accounts.
  • Broker Dealer –  The business activities involving buying and selling securities, such as stocks, bonds, and mutual funds on behalf of investors.
  • Trust Services – The business of providing trust, custody, and related services to customers/clients who have entrusted their money or investment products with the financial institution.
  • Financial Management Consulting – The business of providing one-time financial management and planning services to clients.
  • Estate Planning Services – The business of providing financial advice and services to clients when they are ready to distribute their assets after death.

The financial planning and advice industry is affected by external factors such as market performance, economic trends, and the overall state of the economy.

For example, advisors that focus on selling investments or providing investment services must consider the performance of the stock market. If the market is performing well and people feel good about their money, it’s likely they’ll invest more funds in stocks, which will affect how brokers make a living.

The other external factors that affect the financial planning profession are macroeconomic trends that affect the population’s confidence in the economy.

For example, during an economic recession, it’s important for financial advisors to understand that their clients may be more risk-averse, and not investing as much money into stocks or mutual funds would be wise.

On the other hand, if the economy is doing well and people are feeling confident about their financial stability, then it’s wise to invest more money into stocks.

The financial planning and advice industry is highly competitive, and there are over 130,000 financial advisors in the United States alone. Although many of these advisors work for large financial institutions such as banks and credit unions, many others run their own business full-time or on a part-time basis.

Some of the key competitors in the financial advising industry are:

  • Banks & Credit Unions – These financial institutions provide many of the same services as a financial advisor, such as investment advice and personal finance guidance. They can be a source of competition for advisors because they’re equipped with similar services, but they don’t necessarily compete directly in terms of clientele.
  • Insurance Companies – These financial institutions provide services such as life insurance and annuities, so they can be a source of competition for advisors if the advisor is also selling these types of products.
  • Other Financial Advisors – Most financial advisors have to compete with other advisors from the same company, especially within a large financial advisory firm where each advisor specializes in a different investing sector.

The financial advising industry provides services to individuals of all income levels, but there are some key differences in the type of client each advisor typically deals with.

  • High-Income Clients – These clients have a high net worth and can afford to hire an advisor on a full-time or part-time basis. They’re typically more willing to pay for financial advice and services, especially if the advisor specializes in a specific industry that pertains to their financial situation.
  • Middle-Income Clients – These clients have a moderate net worth and can afford to hire an advisor on a part-time basis for monthly or quarterly checkups. They’re often satisfied with what they receive from the financial advisor, but typically don’t require as much service or attention to their finances.
  • Lower-Income Clients – These clients typically have a low income and struggle with managing their personal finances on their own. They’re more likely to benefit from the types of services that advisors provide, such as budgeting advice or debt management plans.

From growing family needs to save for retirement, financial advisors provide services that help clients meet their individual goals.

Financial advisors have two primary types of startup costs: the cost to set up a legal entity for their new company and ongoing costs that must be met in order to keep the business running.

The Legal Entity

If you want to set up a financial advisor business, you’ll need to create a legal entity for your company. Your startup costs will depend on how you choose to structure your company, but these options are the most common:

  • Sole Proprietorship – This is the cheapest option for creating a legal entity, but it also provides the least amount of tax-related benefits.
  • Partnership – This is another cheap option for starting your company, but it requires at least one other co-founder who contributes to the partnership equally.
  • Corporation – You can register an S Corporation or C Corporation through your state’s Secretary of State’s office, but this type of entity comes with the highest startup costs.

Ongoing Business Expenses

The other primary cost you’ll need to consider when starting a financial advisor business is how much it will cost to keep your company running on a monthly basis. These are some common expenses that every financial advisor has to pay:

  • Salary and Wages – The cost of hiring employees and freelancers can vary significantly, depending on their expertise and area of focus.
  • Insurance Costs – These costs will typically include life insurance, health insurance, and business liability insurance.
  • Utilities – You’ll need to pay for electricity, water, internet access, telephone services, and other standard utilities to keep your business running.
  • Loans – Any loans you take out will need to be paid back within a set amount of time, which will add to your ongoing expenses.

The good news is that there are many different financial advisor business models you can choose from depending on what startup costs you’re able to cover. You can either start a full-service financial planning company, which will require more overhead because you’ll need to hire employees and freelancers, or you can start a fee-only financial planning company that only charges clients through the services they use.

The key costs you’ll need to cover when launching a successful financial planning company include:

  • Operating Expenses – These are the ongoing fees that make it possible for your financial planning firm to remain in operation, such as paying for employees and freelancers, insurance costs, and other standard utilities.
  • Technology – The more sophisticated your technology needs become, the more financial resources you’ll need to cover them. For example, if you want to offer clients the ability to submit their financial plan proposals online and check on their progress towards goals with web-based software and apps, you’ll need to cover the initial investment.
  • Marketing – Marketing costs typically include online advertising, trade magazine ads, direct mail campaigns, and other promotional expenses.
  • Additional Costs – These additional costs will vary depending on the financial advisor model you choose to adopt, but they could include anything from client meetings in person at their homes or place of business to covering the cost of hiring freelancers.

Even though you’ll need to invest money initially, having your own financial planning company can save you thousands of dollars per month in fees, which means that advisors who go independent typically recoup their startup costs within three years. Plus, once you establish yourself as a success and gain clients, you’ll be able to cut back on your marketing expenses, which means that you’ll see a return on investment much sooner.

The amount of money you’ll make as a financial advisor depends on how much work you put into establishing your business and what financial advisor business model you adopt. Advisors who work with institutions and rely on investments to generate their income will generally earn more money annually compared to smaller financial advisory businesses.

When you launch a financial advisor business, you’ll need to choose between the following business models: fee-only financial planning, concierge service, and full-service.

  • Fee-Only Financial Planning – This type of financial planner typically charges clients hourly rates for consultations and other services, and there are no commissions or fees involved. Most fee-only financial planners work with clients on a retainer basis instead of just a one-time consultation.
  • Concierge Service – Under this model, advisors typically charge based on the services they provide rather than an hourly rate or retainer. For example, you can charge clients by the hour for phone consultations or monthly fees for access to planning tools.
  • Full-Service – As a full-service financial advisor, you can offer all types of services to your clients without having to specialize in one specific discipline. This model is typically only appropriate if you have enough financial resources to hire other advisors and financial planners, such as accountants and tax specialists.

The model you choose to adopt depends on the financial advisor business you establish. For example, if you plan to launch a fee-only financial planning business that offers high levels of personalized service, then you’ll probably want to choose the concierge service model for your business. If you’re more likely to attract prospective clients who are interested in investing their money with you, then you’ll likely want to choose the full-service financial advisor business model.

Once you’ve decided on a financial advisor business model and have gathered all of the necessary tools, it’s time to launch your new company. Below are some tips for a successful launch:

  • Set Up Your Business – Before you can begin offering any services as a financial advisor, you’ll need to set up your business. You’ll want to choose a business structure, create your company’s website and social media pages, and get all of the necessary licenses.
  • Establish Relationships – Even though you can launch a financial advisor business online by establishing an online presence through websites and social media platforms, you’ll most likely want to establish personal relationships with clients by meeting face-to-face. Whether you travel to meet with clients or find a suitable office space to work from, building relationships is essential for your financial advisor business’ success.
  • Market Yourself – In order to attract as many prospects as possible and stand out from other financial advisors, it’s important that you market yourself properly. Through your company website and social media pages, you can post articles, blog posts, and videos that educate consumers about financial planning.
  • Reach Out to Clients – Once you’ve reached out to prospects and generated some interest in your financial advisor business, it’s important that you reach out to clients frequently. You can do so through email or phone contacts, online surveys, or social media engagement.
  • Grow Your Business – To grow your financial business, you’ll need to develop a sound business strategy and create a long-term plan. You’ll also want to establish goals that will make it easier for you to meet your financial targets.

Additional Resources

Financial Advisor Mavericks

What are the qualifications needed to start a financial advisor business?

To start a financial advisor business, you'll typically need at least two to three years of experience in the financial planning field. You can meet this requirement by holding various financial planning positions or taking relevant online courses and continuing education classes.

How can I find financial and investment advisor business leads?

The best way to find financial planning leads is by utilizing your company website or social media pages. You can also track down prospects through online directories, referrals from friends, personal networking engagements, and cold calling techniques.

What are the benefits of starting a financial advisory business?

The primary benefit of launching your own financial advisor business is establishing control over how you make money. Aside from that, there are many other benefits including building lasting relationships with clients, gaining greater flexibility in your work schedule, and enjoying the satisfaction that comes with helping others achieve their financial goals.

What are the risks of starting a financial advisory business?

One of the main risks associated with launching a financial advisor business is going into debt. You'll want to have at least six months' worth of living expenses saved up as well as an emergency fund in place to help balance this risk out. Another risk to consider is not having enough time to focus on your company due to the demands of your full-time job.

Who are some successful financial advisors?

A few well-known, highly successful financial advisors include Charles Schwab, Kenneth Fisher, and David Bach. These advisors have written numerous books on their financial strategies and how they can be applied to everyday life.

What is my financial advisor business plan?

In order to become a financial advisor, you'll need to have a sound financial advisor business plan in place. It will help you determine how much money you'll need to make the annual salary you desire, your marketing strategies going forward, and how much money you can spend on expenses each month.

How do I become a registered investment advisor?

In order to become a registered investment advisor, you'll need to meet certain requirements regarding your education and professional background as well as pass the Series 7 exam. You can find out more about the requirements by visiting websites such as Investment Adviser Association or FINRA.

Where Can I Download a Financial Advisor Business Plan PDF?

You can download our financial advisor business plan PDF template here. This is a business plan template you can use in PDF format.

Business Plan Template & Guide For Small Businesses

Financial Model, Business Plan and Dashboard Templates - FinModelsLab

Start Your Financial Planning Practice Business in 9 Simple Steps

By alex ryzhkov, resources on financial planning practice.

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Opening a Financial Planning Practice: A Step-by-Step Guide to Success

Financial planning has become an essential service in today's complex economy, and with the increasing demand for reliable and unbiased advice, starting a financial planning practice can be a profitable endeavor. According to recent statistics, the global financial planning market is expected to reach a value of $6.29 billion by 2025, with a CAGR of 4.4%. This growth can be attributed to the increasing importance of financial planning for individuals and businesses alike.

However, opening a financial planning practice requires careful planning and execution to ensure success. In this guide, we will walk you through nine essential steps to help you launch your own financial planning practice and establish a strong foundation for long-term growth.

  • Conduct market research and identify target market: Before starting any business, it is crucial to understand the market and identify your target audience. Conducting thorough market research will help you better understand the needs and preferences of potential clients.
  • Develop a comprehensive business plan: A well-crafted business plan is the roadmap to success. It should outline your goals, target market, marketing strategies, financial projections, and other important aspects of your practice.
  • Create a financial model and identify funding needs: Determine the financial requirements of your practice, including startup costs, overhead expenses, and operating expenses. This will help you identify any fundraising needs and secure the necessary funding.
  • Secure necessary permits and licenses: Financial planning practices are subject to various regulatory requirements. Obtain the necessary permits and licenses to operate legally and ensure compliance with industry regulations.
  • Establish legal structure and register the business: Choose a legal structure for your practice and register it with the appropriate authorities. This will help protect your personal assets and ensure legal compliance.
  • Develop a marketing strategy and brand identity: Create a compelling marketing strategy to attract clients and establish your practice's brand identity. Utilize both online and offline marketing channels to reach your target audience effectively.
  • Hire and train qualified staff: Building a competent team is essential for the success of your financial planning practice. Hire qualified professionals and provide them with adequate training to deliver exceptional services to your clients.
  • Implement financial planning software and tools: Invest in reliable financial planning software and tools to streamline your practice's operations and enhance client experience. These tools can help you create customized financial plans, track investments, and monitor progress.
  • Launch a strong online presence and website: In today's digital age, having a strong online presence is imperative for any business. Create a professional website that showcases your expertise and provides valuable resources for potential clients.

By following these nine steps, you can lay a solid foundation for your financial planning practice and position yourself for long-term success in the ever-growing financial planning industry. Stay tuned for our upcoming blog posts, where we will dive deeper into each step and provide valuable insights to help you navigate the challenges of starting and running a financial planning practice.

9 Steps to Start a Financial Planning Practice Business: Checklist

Before starting a financial planning practice business, there are several crucial steps that need to be taken in order to ensure a successful launch. By following these steps, you can lay a solid foundation for your business and position yourself for long-term growth and profitability.

Conduct Market Research And Identify Target Market

Before diving into the world of financial planning practice, it is crucial to conduct thorough market research to understand the landscape and identify your target market. This step will lay the foundation for a successful business by helping you tailor your services to meet the needs and preferences of your ideal clients.

Market research involves gathering and analyzing relevant information about the financial planning industry, including current trends, competitors, and potential opportunities. Here are some tips to guide you through this process:

Tips for Conducting Market Research:

  • Define your target market: Clearly identify who your ideal clients are based on factors such as age, income, financial goals, and preferences. This will help you tailor your services to meet their specific needs.
  • Analyze the competition: Identify other financial planning practices in your area and study their offerings, pricing, and marketing strategies. This will help you differentiate yourself and find unique selling points.
  • Segment the market: Divide your target market into segments based on factors such as demographics, life stages, or financial goals. This will allow you to customize your marketing efforts and services for each segment.
  • Conduct surveys or interviews: Gather feedback from potential clients to understand their financial planning needs, pain points, and expectations. This firsthand information will guide the development of your services and ensure they meet market demand.
  • Stay updated on industry trends: Research industry publications, attend conferences, and connect with experts in the field to stay abreast of current trends, regulatory changes, and emerging opportunities. This ongoing research will help you adapt and innovate as the financial planning industry evolves.

By thoroughly conducting market research and identifying your target market, you will have valuable insights to develop a business plan, design marketing strategies, and ultimately position yourself as a trusted and preferred financial planning practice in your chosen market.

Develop A Comprehensive Business Plan

A comprehensive business plan is essential for launching a successful financial planning practice. It serves as a roadmap for your business, outlining your goals, strategies, and financial projections.

When developing your business plan, consider the following key elements:

  • Mission and Vision: Clearly define the purpose and direction of your financial planning practice. What unique value will you provide to clients?
  • Market Analysis: Conduct thorough market research to understand your target market, including demographics, competition, and industry trends. Identify niches or underserved segments where you can differentiate your services.
  • Service Offerings: Outline the range of financial planning services you will offer, such as retirement planning, investment management, tax planning, or estate planning. Consider the specific needs and preferences of your target market.
  • Marketing Strategies: Develop a comprehensive marketing plan to promote your services and attract clients. This may include digital marketing, networking, referral programs, or partnerships with other professionals.
  • Operations and Management: Define the organizational structure of your practice and outline the roles and responsibilities of each team member. Ensure that your systems and processes are efficient and compliant with industry regulations.
  • Financial Projections: Create realistic financial projections, including revenue, expenses, and profitability. This will help you determine your funding needs, pricing strategy, and break-even point.

Tips for Developing a Comprehensive Business Plan:

  • Research and study successful financial planning practices to learn from their strategies and approaches.
  • Seek feedback from industry experts or mentors to gain insights and refine your business plan.
  • Regularly review and update your business plan as your practice evolves and market conditions change.

By developing a comprehensive business plan, you will have a clear roadmap to guide your financial planning practice and increase your chances of success in the competitive industry.

Create A Financial Model And Identify Funding Needs

Creating a financial model is an essential step in launching a financial planning practice business. It involves developing a comprehensive understanding of your projected expenses, revenues, and profitability over a specific period. This financial model will serve as a roadmap to guide your financial decisions and help you identify the funding needs for your business.

To create a robust financial model, consider the following steps:

  • 1. Estimate your startup costs: Begin by calculating the initial expenses required to establish your financial planning practice. This may include office space, furniture, technology equipment, software licenses, marketing materials, and professional fees.
  • 2. Project your operating expenses: Determine your ongoing monthly costs, such as employee salaries, rent, utilities, insurance, marketing expenses, and software subscriptions. It's crucial to be realistic and consider potential fluctuations in expenses.
  • 3. Identify potential revenue streams: Evaluate how you plan to generate income within your fee-only financial planning practice. This may include financial planning fees, hourly consulting fees, or retainer fees. Ensure that these revenue streams align with your business goals.
  • 4. Determine pricing: Set your pricing strategy based on your target market, competition, and value proposition. Analyze industry standards and adjust your fees accordingly to ensure competitiveness and profitability.
  • 5. Perform a break-even analysis: Calculate the number of clients or revenue needed to cover your fixed and variable costs. This analysis will help you determine your breakeven point and assess your financial viability.
  • Consider consulting with an accountant or financial advisor who specializes in the financial planning industry to assist you in creating an accurate and comprehensive financial model.
  • Regularly review and update your financial model as your business evolves to ensure its relevance and accuracy.
  • When identifying funding needs, explore various options such as personal savings, loans from financial institutions, or seeking investments from partners or stakeholders.
  • Allocate a contingency fund within your financial model to account for unexpected expenses or fluctuations in revenue.

By carefully creating a financial model and identifying your funding needs, you will be better equipped to secure the necessary capital and make informed financial decisions as you launch your financial planning practice business.

Secure Necessary Permits And Licenses

Before you can officially open your financial planning practice, it is crucial to Secure Necessary Permits And Licenses in order to comply with legal and regulatory requirements. This step ensures that your business operates within the bounds of the law and establishes trust with potential clients. Here are some important considerations:

  • Research the specific permits and licenses required in your state or region for financial planning practices. Each jurisdiction may have different requirements, so it is important to understand the local regulations.
  • Contact the appropriate government agencies or regulatory bodies to inquire about the necessary permits and licenses for your financial planning practice. They will be able to provide specific information and guide you through the process.
  • Ensure that you meet all the eligibility criteria outlined by the regulatory bodies. This may include specific qualifications, certifications, or experience in the financial planning field.
  • Prepare the necessary documentation and applications required for obtaining the permits and licenses. This may include providing personal and professional information, financial statements, proof of insurance, and any other supporting documents required.
  • Submit your applications and pay any applicable fees. Be sure to keep copies of all documentation and proof of submission for your records.
  • Start the process of securing necessary permits and licenses as early as possible to avoid any delays in launching your financial planning practice.
  • Consider seeking assistance from a legal professional or consultant who specializes in regulatory compliance to ensure you have completed all the necessary steps correctly.
  • Stay up to date with any changes or updates to the regulations governing financial planning practices in your jurisdiction to maintain compliance and adapt accordingly.

Obtaining the necessary permits and licenses demonstrates your commitment to operating a legitimate and trustworthy financial planning practice. By following the appropriate procedures and completing all required steps, you can confidently move forward in the process of launching your business.

Establish Legal Structure And Register The Business

Choosing the right legal structure for your financial planning practice is a crucial step in setting up your business. Determining the appropriate structure will not only impact your liability protection but also your tax obligations and operational flexibility.

Here are some key considerations when establishing the legal structure of your business:

Consult with a lawyer or accountant:

Consider a limited liability entity:, determine ownership structure:, register your business:, obtain necessary permits and licenses:.

Establishing the legal structure and registering your business lays the foundation for your financial planning practice. It is crucial to ensure compliance with regulations and set the right framework for your operations. Consulting with professionals and understanding the legal requirements will help you make informed decisions and protect your practice's interests.

Develop A Marketing Strategy And Brand Identity

Developing a marketing strategy and brand identity is crucial for the success of your financial planning practice. It helps you establish a strong presence in the market and attract your target clients. Here are some key steps to consider:

  • Identify your target market: Determine who your ideal clients are based on factors such as age, income level, and financial goals. Tailor your marketing efforts towards reaching this specific audience.
  • Define your unique value proposition: Clearly articulate what sets your practice apart from competitors. Highlight the benefits and advantages that clients will receive by working with you.
  • Create a compelling brand identity: Develop a professional and visually appealing logo, website, and marketing materials that reflect your practice's values and desired image.
  • Establish your online presence: Build a user-friendly website that showcases your expertise, services, and client testimonials. Leverage social media platforms to engage with your audience and share valuable content.
  • Utilize content marketing: Develop a content strategy to educate your audience about financial planning and establish yourself as a thought leader. Produce blog posts, videos, or podcasts on relevant topics.
  • Network and build relationships: Attend industry events, join professional organizations, and connect with other professionals who can refer clients to you.
  • Regularly evaluate and adjust your marketing efforts based on feedback and results.
  • Consider offering educational workshops or webinars to position yourself as a trusted resource.
  • Ensure consistency in your branding across all marketing channels for a cohesive and professional image.
  • Track the return on investment of different marketing strategies to identify the most effective ones.

Remember, developing a comprehensive marketing strategy and brand identity takes time and effort, but it is essential for attracting and retaining clients in the competitive financial planning industry.

Hire And Train Qualified Staff

Building a successful financial planning practice requires assembling a team of qualified professionals who possess the necessary knowledge and skills to provide exceptional service to your clients. Here are some important steps to follow when hiring and training staff for your practice:

  • Define job roles and responsibilities: Clearly outline the specific roles and responsibilities you need your staff to fulfill. This may include financial planners, administrators, client service associates, and marketing personnel.
  • Identify desired qualifications: Determine the qualifications and certifications necessary for each role. Look for candidates with relevant educational backgrounds, industry certifications (such as Certified Financial Planner®), and experience in the financial planning field.
  • Advertise job openings: Promote your job openings through various channels, such as online job boards, industry associations, and local colleges or universities. Clearly communicate the skills, qualifications, and responsibilities required for each position.
  • Conduct thorough interviews: Screen candidates based on their resumes and conduct in-depth interviews to assess their skills, experience, and cultural fit with your practice. Ask behavioral and scenario-based questions to evaluate their problem-solving abilities and decision-making skills.
  • Provide comprehensive training: Once you have selected the right candidates, invest time in providing comprehensive training to ensure they are well-equipped to fulfill their roles effectively. This may involve internal training programs, mentorship, and external workshops or seminars.
  • Create a positive work environment: Foster a positive work culture that encourages collaboration, continuous learning, and professional growth. Offer competitive compensation and benefits to attract and retain top talent in the industry.
  • Consider hiring staff with different areas of expertise to provide a well-rounded service offering to your clients.
  • Regularly evaluate staff performance and provide constructive feedback to help them improve and grow in their roles.
  • Encourage ongoing professional development by sponsoring relevant industry conferences, seminars, or training programs.

By hiring and training qualified staff who share your commitment to providing exceptional financial planning services, you can build a strong foundation for success and establish a reputation as a trusted advisor in the industry.

Implement Financial Planning Software And Tools

Once you have assembled a qualified team of financial planners and established your business structure, it is important to equip them with the necessary software and tools to effectively serve your clients. The right financial planning software can streamline the process, improve efficiency, and enhance the overall client experience.

When selecting financial planning software, consider the following:

  • Research and compare different options: Take the time to research and compare different financial planning software available in the market. Look for software that aligns with your specific business needs, offers comprehensive features, and provides a user-friendly interface.
  • Consider integration capabilities: Choose software that integrates seamlessly with other tools you use, such as CRM systems, document management platforms, and customer portals. Integration can enhance efficiency and ensure a smooth workflow.
  • Ensure data security: Financial planning involves handling sensitive client data, so it is crucial to prioritize data security. Look for software that employs robust security measures, including encryption, secure data storage, and regular system updates.
  • Provide training and support: Once you have chosen the software, provide thorough training to your staff to ensure they can effectively utilize all its features. Additionally, ensure that the software provider offers reliable customer support to assist with any issues or questions that may arise.
  • Involve your financial planners in the software selection process to ensure their needs and preferences are considered.
  • Read user reviews and seek recommendations from industry peers to gain insights into the software's performance and reliability.
  • Regularly assess your software's performance and consider upgrades or updates to keep up with industry advancements.

By implementing the right financial planning software and tools, you can effectively manage client data, collaborate with your team, and deliver exceptional financial planning services.

Launch A Strong Online Presence And Website

In today's digital age, a strong online presence is essential for any business, and a financial planning practice is no exception. A well-designed and user-friendly website can serve as a valuable tool for attracting potential clients and building credibility in the industry.

To launch a strong online presence and website for your financial planning practice, consider the following steps:

  • 1. Define your brand: Before designing your website, it's important to have a clear understanding of your brand identity. Define your unique value proposition and incorporate it into your website's design and content.
  • 2. Optimize for search engines: Implement search engine optimization (SEO) strategies to ensure your website appears in relevant search engine results. Research keywords related to financial planning and incorporate them into your website's content.
  • 3. Create valuable content: Offer informative and educational content on your website to establish yourself as an industry expert. Consider including blog posts, articles, and resources that address common financial planning concerns.
  • 4. Enable online appointment scheduling: Streamline the process for potential clients to schedule appointments by integrating an online scheduling system into your website. This can save time for both you and your clients.
  • 5. Showcase client testimonials and case studies: Highlight the positive experiences of your satisfied clients to build trust and credibility. Include testimonials and case studies on your website to demonstrate the value you provide.
  • Invest in professional web design and ensure your website is mobile-friendly.
  • Include clear contact information and a prominent call-to-action to encourage potential clients to reach out.
  • Regularly update your website with fresh content to keep visitors engaged and coming back for more.

By launching a strong online presence and website, you can attract and engage potential clients, establish trust and credibility, and ultimately grow your financial planning practice.

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9 Financial Planning Tips for Small Business Owners

David Luther

Starting a small business can be exhilarating and overwhelming all at once. It’s tempting to devote the lion’s share of time and effort to developing your product or service, hiring the right people and finding customers. But it’s important to carve out some time to tend to the financial health of the company. It’s similar to how airlines recommend attaching your own oxygen mask before helping others: You can’t fulfill your customers’ needs or empower employees if you suddenly find yourself in a liquidity crisis.

What is Financial Planning?

Small business financial planning is an ongoing process. Your objectives: Develop short- and long-term business and fiscal goals and tactics to achieve them. Do some scenario planning to understand the financial barriers that can arise at every stage of growth, and consider your options in terms of funding sources.

While many aspects of small business financial planning are similar to handling personal finances — think creating a budget, risk management, tax and investment strategies and retirement and estate planning — there are some important differences.

1. Separate business and personal goals.

Blurring the lines between personal and business goals could mean compromising some aspects of your finances for another. Perhaps you want to add a new product to your inventory but also want to add funds to your child’s 529 plan. Which takes priority?

Of course, you’re building the business to make money to forward your personal financial goals. But if you don’t distinguish between personal and business objectives, you may end up hurting both.

We’re not just talking about separating your finances, including having separate checking accounts, for example — though that’s also critical, as we’ll discuss. We’re talking about visioning and goal setting. Ask yourself:

  • Personal: What are my immediate personal priorities? Examples: Get more exercise, learn a new skill. What’s my five- and 10-year plan? What are my family’s priorities?
  • Business: What are my immediate business priorities? Examples: Hire a new employee, make a marketing plan to acquire more customers. Where do I want my business to be in five years? What are our product or service development priorities?

2. Explore your funding options.

Small business owners tend to self-fund, or bootstrap, meaning that personal funds are the owner’s only or major source of capital. Putting money back into the business makes sense: Bootstrapping allows you to slowly and organically grow your business while ensuring that the model is financially viable.

On the downside, you’re not well-diversified. Using savings or credit cards for startup capital can put you at significant financial risk, depending on how capital intensive your business is.

It’s prudent to offset some of that risk by exploring one or more additional sources of funding.

Fortunately, there are plenty of other places to get capital. Bringing in outside sources, such as offering equity and getting a good or service in return, business loans or customer presales or recurring sales can ensure a constant inflow of capital.

3. Focus on liquidity.

Sure, your balance sheet shows you that your business is financially sound, but it doesn’t mean your assets are liquid. The goal should be to have more assets than liabilities, so you have a buffer to meet short-term financial obligations.

And, the professionals controlling those external funding sources — like business lines of credit or inventory/receivables factoring — will expect you to have a view into your liquidity status . Some key points are that while cash, not P&L, is your main metric, there are additional important KPIs like the cash conversion cycle (CCC), days sales outstanding (DSO), days payable outstanding (DPO) and days inventory outstanding (DIO) that all companies should track.

Some small businesses may even want to assemble a “cash committee” to closely monitor daily metrics and report back on liquidity status.

4. Cash flow.

A healthy cash flow enables you to meet current obligations, like paying employees and purchasing raw materials, while also building up a reserve for investments and emergencies. Amassing assets, like real estate or inventory, is great, but if cash flow is a challenge, your business will stall.

Performing a formal cash flow analysis will tell you how much money is flowing in and out of your business. This knowledge allows you to plan accordingly. When you do these analyses regularly, you will gain historical perspective and be able to determine the amount you should set aside as reserves to weather the leaner months or an unexpected cash flow shortage.

5. Manage taxes.

Going the do-it-yourself route may work for your personal finances, but tax planning can be far more complicated as a small business owner. Outsourcing tax planning and preparation to a qualified certified public accountant (CPA) or other financial professional who may be helping with your business will not only free up time, but that expertise may reduce your tax liability.

A CPA knows tax laws in your area inside and out and can advise you on various strategies, such as how to maximize qualifying business expenses and the amount to pay in estimated taxes so you don’t end up with a big bill — or giving Uncle Sam an interest-free loan.

One note: One business valuation expert has seen founders make a mistake by trying to structure their businesses to minimize the payment of taxes. When they’re successful at that, net income might be zero or even negative. However, that can cause major problems when seeking funding or investments.

6. Risk management.

Identifying and mitigating risk is something every small business needs to do, but it often falls to the bottom of the list simply because creating a plan that addresses all potential perils seems like a massive task. And yes, it is virtually impossible to address every risk that could possibly affect your business. But you can certainly narrow the list and put safeguards, like cybersecurity insurance and a crisis communications plan, in place.

Scenario Planning vs. Business Continuity Planning

Scenario planning is often conflated with business continuity planning. While both are structured processes, scenario planning plays a longer game that considers revenue over time. Business continuity planning is about how your business will react to a disaster, such as a warehouse fire or earthquake.

In both processes, the journey may be as valuable as the final work product. By bringing leaders together to think through what could affect your business, you may head off potential risk.

Here are some things to consider when crafting a risk management plan:

  • Provide the right amount of coverage for yourself and your employees while avoiding overpaying for healthcare and worker’s compensation coverage
  • Include cash flow contingencies in case of a business interruption due to a disaster or death of a key person.
  • How will you cope with the loss or theft of business property or fraud by an employee, supplier, partner or other third party?
  • Consult with counsel about protecting your business from lawsuits.

Note that you don’t need to start from scratch. The Small Business Administration provides a free “Risk Management for a Small Business” training guide.

One existential risk for any business is the loss of the founder or other key leader — do you have a plan for what happens when you must or want to leave?

That leads us to the next three items which, while related, deserve their own plans and attention.

7. Create succession and exit plans. 

These are two different scenarios. In a succession, you’re turning the reins of the business over to the next leader. In an exit, you are selling or shutting down the business. As with risk management, the SBA offers a template for succession planning that also includes a section on selling the business.

When deciding whether to sell, close or pass along the company you’ve built, the Small Business Administration recommends looking at a few factors. Have you received a job offer from another company or a purchase offer for your business or your business assets? Are you satisfied with the business’ profitability? Do you foresee market or industry changes that you can’t or don’t wish to adapt to?

On a personal level, are you ready to retire or find you’re working too many hours? Are you simply no longer passionate about the business and ready to try something new? Answering these questions should provide clarity into your next steps.

Let’s look at both succession and exit.

Exit plan: If you wish to sell your company, you need an idea of the value. In fact, even if you aren’t looking to sell, it’s smart to always have a ballpark idea of the business’ market value. Experts advise looking at what similar firms have sold for recently, consider qualitative factors such as whether executives plan to stay on and decide what payment terms you’ll accept.

Succession plan: This is a strategy to cede control of the business to one or more people, or an acquirer. If the former, decide if you will pass the company on to a family member or an employee, and begin training. You’ll still need to know the business’ value, so take the steps mentioned above. Bring in an attorney and a tax professional early on.

8. Plan for retirement.

Retirement planning is crucial for everyone, business owner or not. Experts recommend saving at least 15% of pretax income for retirement in a tax-advantaged plan, such as a simplified employee pension individual retirement account, or SEP-IRA. Any employer, including sole proprietorships, are eligible to establish SEP-IRAs. You can extend this opportunity to employees.

As with taxes, an experienced financial planner can walk you through your options to create a plan suited to your company’s needs.

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9. Create an estate plan.

Proper estate planning helps to provide for your loved ones, business partners and employees who rely on your business; minimize tax exposure; and provide clear instructions on how the business should proceed. These plans are also critical in case you’re incapacitated. There’s no substitution for having an experienced estate planning attorney help you create an airtight plan.

Creating a customized financial plan is an ongoing process. Find trusted advisers who can offer advice and help you develop actionable steps. Successful small business financial planning is an ongoing process, and done successfully, these strategies will optimize performance and show customers and employees that you’re looking out for their welfare.

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  • Creating a Small Business Financial Plan

growing financial planning business

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on September 02, 2023

Are You Retirement Ready?

Table of contents, financial plan overview.

A financial plan is a comprehensive document that charts a business's monetary objectives and the strategies to achieve them. It encapsulates everything from budgeting and forecasting to investments and resource allocation.

For small businesses, a solid financial plan provides direction, helping them navigate economic challenges, capitalize on opportunities, and ensure sustainable growth.

The strength of a financial plan lies in its ability to offer a clear roadmap for businesses.

Especially for small businesses that may not have a vast reserve of resources, prioritizing financial goals and understanding where every dollar goes can be the difference between growth and stagnation.

It lends clarity, ensures informed decision-making, and sets the stage for profitability and success.

Understanding the Basics of Financial Planning for Small Businesses

Role of financial planning in business success.

Financial planning is the backbone of any successful business endeavor. It serves as a compass, guiding businesses toward profitability, stability, and growth.

With proper financial planning, businesses can anticipate potential cash shortfalls, make informed investment decisions, and ensure they have the capital needed to seize new opportunities.

For small businesses, in particular, tight financial planning can mean the difference between thriving and shuttering. Given the limited resources, it's vital to maximize every dollar and anticipate financial challenges.

Through diligent planning, small businesses can position themselves competitively, adapt to market changes, and drive consistent growth.

Core Components of a Financial Plan for Small Businesses

Every financial plan comprises several core components that, together, provide a holistic view of a business's financial health and direction. These include setting clear objectives, estimating costs , preparing financial statements , and considering sources of financing.

Each component plays a pivotal role in ensuring a thorough and actionable financial strategy .

For small businesses, these components often need a more granular approach. Given the scale of operations, even minor financial missteps can have significant repercussions.

As such, it's essential to tailor each component, ensuring they address specific challenges and opportunities that small businesses face, from initial startup costs to revenue forecasting and budgetary constraints.

Setting Clear Small Business Financial Objectives

Identifying business's short-term and long-term financial goals.

Every business venture starts with a vision. Translating this vision into actionable financial goals is the essence of effective planning.

Short-term goals could range from securing initial funding and achieving a set monthly revenue to covering startup costs. These targets, usually spanning a year or less, set the immediate direction for the business.

On the other hand, long-term financial goals delve into the broader horizon. They might encompass aspirations like expanding to new locations, diversifying product lines, or achieving a specific market share within a decade.

By segmenting goals into short-term and long-term, businesses can craft a step-by-step strategy, making the larger vision more attainable and manageable.

Understanding the Difference Between Profitability and Cash Flow

Profitability and cash flow, while closely linked, are distinct concepts in the financial realm. Profitability pertains to the ability of a business to generate a surplus after deducting all expenses.

It's a metric of success and indicates the viability of a business model . Simply put, it answers whether a business is making more than it spends.

In contrast, cash flow represents the inflow and outflow of cash within a business. A company might be profitable on paper yet struggle with cash flow if, for instance, clients delay payments or unexpected expenses arise.

For small businesses, maintaining positive cash flow is paramount. It ensures that they can cover operational costs, pay employees, and reinvest in growth, even if they're awaiting payments or navigating financial hiccups.

Estimating Small Business Startup Costs (for New Businesses)

Fixed vs variable costs.

When embarking on a new business venture, understanding costs is paramount. Fixed costs remain consistent regardless of production levels. They include expenses like rent, salaries, and insurance . These are predictable outlays that don't fluctuate with business performance.

Variable costs , conversely, change in direct proportion to production or business activity. Think of costs associated with materials for manufacturing or commission for sales .

For a startup, delineating between fixed and variable costs aids in crafting a more dynamic budget, allowing for adaptability as the business scales and evolves.

One-Time Expenditures vs Ongoing Expenses

Startups often grapple with numerous upfront costs. From purchasing equipment and setting up a workspace to initial marketing campaigns, these one-time expenditures lay the foundation for business operations.

They differ from ongoing expenses like utility bills, raw materials, or employee wages that recur monthly or annually.

For a small business owner, distinguishing between these costs is critical. One-time expenditures often demand a larger chunk of initial capital, while ongoing expenses shape the monthly and annual budget.

By categorizing them separately, businesses can strategize funding needs more effectively, ensuring they're equipped to meet both immediate and recurrent financial obligations.

Funding Sources for Small Businesses

Personal savings.

This is often the most straightforward way to fund a startup. Entrepreneurs tap into their personal savings accounts to jumpstart their business.

While this method has the benefit of not incurring debt or diluting company ownership, it intertwines the individual's personal financial security with the business's fate.

The entrepreneur must be prepared for potential losses, and there's the evident psychological strain of putting one's hard-earned money on the line.

Loans can be sourced from various institutions, from traditional banks to credit unions . They offer a substantial sum of money that can be paid back over time, usually with interest .

The main advantage of taking a loan is that the entrepreneur retains full ownership and control of the business.

However, there's the obligation of monthly repayments, which can strain a business's cash flow, especially in its early days. Additionally, securing a loan often requires collateral and a sound credit history.

Investors, including angel investors and venture capitalists , offer capital in exchange for equity or a stake in the company.

Angel investors are typically high-net-worth individuals who provide funding in the initial stages, while venture capitalists come in when there's proven business potential, often injecting larger sums. The advantage is substantial funding without the immediate pressure of repayments.

However, in exchange for their investment, they often seek a say in business decisions, which might mean compromising on some aspects of the original business vision.

Grants are essentially 'free money' often provided by government programs, non-profit organizations, or corporations to promote innovation and support businesses in specific sectors.

The primary advantage of grants is that they don't need to be repaid, nor do they dilute company ownership. However, they can be highly competitive and might come with stipulations on how the funds should be used.

Moreover, the application process can be lengthy and requires showcasing the business's potential or alignment with the specific goals or missions of the granting institution.

Funding Sources for Small Businesses

Preparing Key Financial Statements for Small Businesses

Income statement (profit & loss).

An Income Statement , often termed as the Profit & Loss statement , showcases a business's financial performance over a specific time frame. It details revenues , expenses, and ultimately, profits or losses.

By analyzing this statement, business owners can pinpoint revenue drivers, identify exorbitant costs, and understand the net result of their operations.

For small businesses, this document is instrumental in making informed decisions. For instance, if a certain product line is consistently unprofitable, it might be prudent to discontinue it. Conversely, if another segment is thriving, it might warrant further investment.

The Income Statement, thus, serves as a financial mirror, reflecting the outcomes of business strategies and decisions.

Balance Sheet

The Balance Sheet offers a snapshot of a company's assets , liabilities , and equity at a specific point in time.

Assets include everything the business owns, from physical items like equipment to intangible assets like patents .

Liabilities, on the other hand, encompass what the company owes, be it bank loans or unpaid bills.

Equity represents the owner's stake in the business, calculated as assets minus liabilities.

This statement is crucial for small businesses as it offers insights into their financial health. A robust asset base, minimal liabilities, and growing equity signify a thriving enterprise.

In contrast, mounting liabilities or dwindling assets could be red flags, signaling the need for intervention and strategy recalibration.

Cash Flow Statement

While the Income Statement reveals profitability, the Cash Flow Statement tracks the actual movement of money.

It categorizes cash flows into operating (day-to-day business), investing (buying/selling assets), and financing (loans or equity transactions) activities. This statement unveils the liquidity of a business, indicating whether it has sufficient cash to meet immediate obligations.

For small businesses, maintaining positive cash flow is often more vital than showcasing profitability.

After all, a business might be profitable on paper yet struggle if clients delay payments or unforeseen expenses emerge.

By regularly reviewing the Cash Flow Statement, small business owners can anticipate cash crunches and strategize accordingly, ensuring seamless operations irrespective of revenue cycles.

Preparing Key Financial Statements for Small Businesses

Small Business Budgeting and Expense Management

Importance of budgeting for a small business.

Budgeting is the financial blueprint for any business, detailing anticipated revenues and expenses for a forthcoming period. It's a proactive approach, enabling businesses to allocate resources efficiently, plan for investments, and prepare for potential financial challenges.

For small businesses, a meticulous budget is often the linchpin of stability, ensuring they operate within their means and avoid financial pitfalls.

Having a well-defined budget also fosters discipline. It curtails frivolous spending, emphasizes cost-efficiency, and sets clear financial boundaries.

For small businesses, where every dollar counts, a stringent budget is the gateway to financial prudence, ensuring that funds are utilized judiciously, fostering growth, and minimizing wastage.

Strategies for Reducing Costs and Optimizing Expenses

Bulk purchasing.

When businesses buy supplies in large quantities, they often benefit from discounts due to economies of scale . This can significantly reduce per-unit costs.

However, while bulk purchasing leads to immediate savings, businesses must ensure they have adequate storage and that the products won't expire or become obsolete before they're used.

Renegotiating Vendor Contracts

Regularly reviewing and renegotiating contracts with suppliers or service providers can lead to better terms and lower costs. This might involve exploring volume discounts, longer payment terms, or even bartering services.

Building strong relationships with vendors often paves the way for such negotiations.

Adopting Energy-Saving Measures

Simple changes, like switching to LED lighting or investing in energy-efficient appliances, can lead to long-term savings in utility bills. Moreover, energy conservation not only reduces costs but also minimizes the environmental footprint, which can enhance the business's reputation.

Embracing Technology

Modern software and technology can streamline business processes. Automation tools can handle repetitive tasks, reducing labor costs.

Meanwhile, data analytics tools can provide insights into customer preferences and behavior, ensuring that marketing budgets are used effectively and target the right audience.

Streamlining Operations

Regularly reviewing and refining business processes can eliminate redundancies and improve efficiency. This might mean merging roles, cutting down on unnecessary meetings, or simplifying supply chains. A leaner operation often translates to reduced expenses.

Outsourcing Non-core Tasks

Instead of maintaining an in-house team for every function, businesses can outsource tasks that aren't central to their operations.

For instance, functions like accounting , IT support, or digital marketing can be outsourced to specialized agencies, often leading to cost savings and access to expert skills.

Cultivating a Culture of Frugality

Encouraging employees to adopt a cost-conscious mindset can lead to collective savings. This can be fostered through incentives, regular training, or even simple practices like recycling and reusing office supplies.

When everyone in the organization is attuned to the importance of cost savings, the cumulative effect can be substantial.

Strategies for Reducing Costs and Optimizing Expenses in a Small Business

Forecasting Small Business Revenue and Cash Flow

Techniques for predicting future sales in a small business, past sales data analysis.

Historical sales data is a foundational element in any forecasting effort. By reviewing previous sales figures, businesses can identify patterns, understand seasonal fluctuations, and recognize the effects of past initiatives.

This information offers a baseline upon which to build future projections, accounting for known recurring variables in the business cycle .

Market Research

Understanding the larger market dynamics is crucial for accurate forecasting. This involves tracking industry trends, monitoring shifts in consumer behavior, and being aware of potential market disruptions.

For instance, a sudden technological advancement can change consumer preferences or regulatory changes might impact an industry.

Local Trend Analysis

For small businesses, localized insights can be especially impactful. Observing local competitors, understanding regional consumer preferences, or noting shifts in the local economy can offer precise data points.

These granular details, when integrated into a larger forecasting model, can enhance prediction accuracy.

Customer Feedback

Direct feedback from customers is an invaluable source of insights. Surveys, focus groups, or even informal chats can reveal customer sentiments, preferences, and potential future purchasing behavior.

For instance, if a majority of loyal customers express interest in a new product or service, it can be indicative of future sales potential.

Moving Averages

This technique involves analyzing a series of data points (like monthly sales) by creating averages from different subsets of the full data set.

For yearly forecasting, a 12-month moving average can be used to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Regression Analysis

Regression analysis is a statistical tool used to identify relationships between variables. In sales forecasting, it can help understand how different factors (like marketing spend, seasonal variations, or competitor actions) relate to sales figures.

Once these relationships are understood, businesses can predict future sales based on planned actions or expected external events.

Techniques for Predicting Future Sales in a Small Business

Understanding the Cash Cycle of Business

The cash cycle encompasses the time it takes for a business to convert resource investments, often in the form of inventory, back into cash.

This involves the processes of purchasing inventory, selling it, and subsequently collecting payment. A shorter cycle implies quicker cash turnarounds, which are vital for liquidity.

For small businesses, a firm grasp of the cash cycle can aid in managing cash flow more effectively.

By identifying bottlenecks or delays, businesses can strategize to expedite processes. This might involve renegotiating payment terms with suppliers, offering discounts for prompt customer payments, or optimizing inventory levels to prevent overstocking.

Ultimately, understanding and optimizing the cash cycle ensures that a business remains liquid and agile.

Preparing for Seasonality and Unexpected Changes

Seasonality affects many businesses, from the ice cream vendor witnessing summer surges to the retailer bracing for holiday shopping frenzies.

By analyzing historical data and market trends, businesses can prepare for these cyclical shifts, ensuring they stock up, staff appropriately, and market effectively.

Small businesses, often operating on tighter margins , need to be especially vigilant. Beyond seasonality, they must also brace for unexpected changes – a local construction project obstructing store access, a sudden competitor emergence, or unforeseen regulatory changes.

Building a financial buffer, diversifying product or service lines, and maintaining flexible operational strategies can equip small businesses to weather these unforeseen challenges with resilience.

Securing Small Business Financing and Capital

Role of debt and equity financing.

When businesses seek external funding, they often grapple with the debt vs. equity conundrum. Debt financing involves borrowing money, typically via loans. While it doesn't dilute ownership, it necessitates regular interest payments, potentially impacting cash flow.

Equity financing, on the other hand, entails selling a stake in the business to investors. It might not demand regular repayments, but it dilutes ownership and might influence business decisions.

Small businesses must weigh these options carefully. While loans offer a structured repayment plan and retained control, they might strain finances if the business hits a rough patch.

Equity financing, although relinquishing some control, might bring aboard strategic partners, offering expertise and networks in addition to funds.

The optimal choice hinges on the business's financial health, growth aspirations, and the founder's comfort with sharing control.

Choosing Between Different Types of Loans

A staple in the lending arena, term loans offer businesses a fixed amount of capital that is paid back over a specified period with interest. They're often used for significant one-time expenses, such as purchasing machinery, real estate , or even business expansion.

With predictable monthly payments, businesses can plan their budgets accordingly. However, they might require collateral and a robust credit history for approval.

Lines of Credit

Unlike term loans that provide funds in a lump sum, a line of credit grants businesses access to a pool of funds up to a certain limit.

Businesses can draw from this line as needed, only paying interest on the amount they use. This makes it a versatile tool, especially for managing cash flow fluctuations or unexpected expenses. It serves as a financial safety net, ready for use whenever required.

As the name suggests, microloans are smaller loans designed to cater to businesses that might not need substantial amounts of capital. They're particularly beneficial for startups, businesses with limited credit histories, or those in need of a quick, small financial boost.

Since they are of a smaller denomination, the approval process might be more lenient than traditional loans.

Peer-To-Peer Lending

A contemporary twist to the traditional lending model, peer-to-peer (P2P) platforms connect borrowers directly with individual lenders or investor groups.

This direct model often translates to quicker approvals and competitive interest rates as the overheads of traditional banking structures are removed. With technology at its core, P2P lending can offer a more user-friendly, streamlined process.

However, creditworthiness still plays a pivotal role in determining interest rates and loan amounts.

Crowdfunding and Alternative Financing Options

In an increasingly digital age, crowdfunding platforms like Kickstarter or Indiegogo have emerged as viable financing avenues.

These platforms enable businesses to raise small amounts from a large number of people, often in exchange for product discounts, early access, or other perks. This not only secures funds but also validates the business idea and fosters a community of supporters.

Other alternatives include invoice financing, where businesses get an advance on pending invoices, or merchant cash advances tailored for businesses with significant credit card sales.

Each financing mode offers unique advantages and constraints. Small businesses must meticulously evaluate their financial landscape, growth trajectories, and risk appetite to harness the most suitable option.

Small Business Tax Planning and Management

Basic tax obligations for small businesses.

Navigating the maze of taxation can be daunting, especially for small businesses. Yet, understanding and fulfilling tax obligations is crucial.

Depending on the business structure—whether sole proprietorship , partnership , LLC , or corporation—different tax rules apply. For instance, while corporations are taxed on their earnings, sole proprietors report business income and expenses on their personal tax returns.

In addition to income taxes, small businesses may also be responsible for employment taxes if they have employees. This covers Social Security , Medicare , federal unemployment, and sometimes state-specific taxes.

There might also be sales taxes, property taxes, or special state-specific levies to consider.

Consistently maintaining accurate financial records, being aware of filing deadlines, and setting aside funds for tax obligations are essential practices to avoid penalties and ensure compliance.

Advantages of Tax Planning and Potential Deductions

Tax planning is the strategic approach to minimizing tax liability through the best use of available allowances, deductions, exclusions, and breaks.

For small businesses, effective tax planning can lead to significant savings.

This might involve strategies like deferring income to a later tax year, choosing the optimal time to purchase equipment, or taking advantage of specific credits available to businesses in certain sectors or regions.

Several potential deductions can reduce taxable income for small businesses. These include expenses like rent, utilities, business travel, employee wages, and even certain meals.

By keeping abreast of tax law changes and actively seeking out eligible deductions, small businesses can optimize their financial landscape, ensuring they're not paying more in taxes than necessary.

Importance of Hiring a Tax Professional or Accountant

While it's feasible for small business owners to manage their taxes, the intricate nuances of tax laws make it beneficial to consult professionals.

An experienced accountant or tax consultant can not only ensure compliance but can proactively recommend strategies to reduce tax liability.

They can guide businesses on issues like whether to classify someone as an employee or a contractor, how to structure the business for optimal taxation, or when to make certain capital investments.

Beyond just annual tax filing, these professionals offer year-round counsel, helping businesses maintain clean financial records, stay updated on tax law changes, and plan for future financial moves.

The investment in professional advice often pays dividends , saving businesses from costly mistakes, penalties, or missed financial opportunities.

Regularly Reviewing and Adjusting the Small Business Financial Plan

Setting checkpoints and milestones.

Like any strategic blueprint, a financial plan isn't static. It serves as a guiding framework but should be flexible enough to adapt to evolving business realities.

Setting regular checkpoints— quarterly , half-yearly, or annually—can help businesses assess whether they're on track to meet their financial objectives.

Milestones, such as reaching a specific sales target, launching a new product, or expanding into a new market, offer tangible markers of progress. Celebrating these victories can bolster morale, while any shortfalls can serve as lessons, prompting strategy tweaks. F

or small businesses, where agility is an asset, regularly revisiting the financial plan ensures that the business remains aligned with its overarching financial goals while being responsive to the dynamic marketplace.

Using Financial Ratios to Monitor Business Health

Financial ratios offer a distilled snapshot of a business's health. Ratios like the current ratio ( current assets divided by current liabilities ) can shed light on liquidity, indicating whether a business can meet short-term obligations.

The debt-to-equity ratio , contrasting borrowed funds with owner's equity, offers insights into the business's leverage and potential financial risk.

Profit margin , depicting profitability relative to sales, can highlight operational efficiency. By consistently monitoring these and other pertinent ratios, small businesses can glean actionable insights, understanding their financial strengths and areas needing attention.

In a realm where early intervention can stave off major financial setbacks, these ratios serve as vital diagnostic tools, guiding informed decision-making.

Pivoting Strategies Based on Financial Performance

In the ever-evolving world of business, flexibility is paramount. If financial reviews indicate that certain strategies aren't yielding anticipated results, it might be time to pivot.

This could involve tweaking product offerings, revising pricing strategies, targeting a different customer segment, or even overhauling the business model.

For small businesses, the ability to pivot can be a lifeline. It allows them to respond swiftly to market changes, customer feedback, or internal challenges.

A robust financial plan, while offering direction, should also be pliable, accommodating shifts in strategy based on real-world performance. After all, in the business arena, adaptability often spells the difference between stagnation and growth.

Creating a Small Business Financial Plan

Bottom Line

Financial foresight is integral for the stability and growth of small businesses. Effective revenue and cash flow forecasting, anchored by historical sales data and enhanced by market research, local trends, and customer feedback, ensures businesses are prepared for future demands.

With the unpredictability of the business environment, understanding the cash cycle and preparing for unforeseen challenges is essential.

As businesses contemplate external financing, the decision between debt and equity and the myriad of loan types, should be made judiciously, keeping in mind the business's health, growth aspirations, and risk appetite.

Furthermore, diligent tax planning, with professional guidance, can lead to significant financial benefits. Regular reviews using financial ratios allow businesses to gauge their performance, adapt strategies, and pivot when necessary.

Ultimately, the agility to adapt, guided by a well-structured financial plan, is pivotal for businesses to thrive in a dynamic marketplace.

Creating a Small Business Financial Plan FAQs

What is the importance of a financial plan for small businesses.

A financial plan offers a structured roadmap, guiding businesses in making informed decisions, ensuring growth, and navigating financial challenges.

How do forecasting revenue and understanding cash cycles aid in financial planning?

Forecasting provides insights into expected income, aiding in budget allocation, while understanding cash cycles ensures effective liquidity management.

What are the core components of a financial plan for small businesses?

Core components include setting objectives, estimating startup costs, preparing financial statements, budgeting, forecasting, securing financing, and tax management.

Why is tax planning vital for small businesses?

Tax planning ensures compliance, optimizes tax liabilities through available deductions, and helps businesses save money and avoid penalties.

How often should a small business review its financial plan?

Regular reviews, ideally quarterly or half-yearly, ensure alignment with business goals and allow for strategy adjustments based on real-world performance.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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The Ultimate Guide To Business Financial Planning

The ultimate guide to business financial planning.

Every business wants to accomplish its own set of long and short-term goals. Yes, some goals are more relevant than others, and the hierarchy is unique to the organization. Still, one of the biggest things companies aim for is financial stability for the long term.

Having a comprehensive financial plan is crucial if you want your business to go from where it is now to where you want it to be. Many factors affect a business’s finances, from decisions in management to profits to accounts receivable turnover. As owner or finance leader of the firm, you’d want to make sure that your organization always stays on top of its finances.

This article will discuss the significance of financial planning and how you can create one for your business. 

What is Financial Planning? 

Simply put, financial planning involves a comprehensive evaluation of your company’s current financial health so you can lay out financial objectives and the strategies your company will use to achieve those objectives. You can use these evaluations to create favorable projections that your company can aim for. Typically, a financial plan is a component of your overall business plan, which you tweak over time to align with your current goals. 

In your financial plan, company management and investors can view critical information regarding your company’s growth strategy. It includes essential details such as sales projections, cash flow projections, your expenses budget, and other information that can guide those involved to make informed decisions. As more and more companies embrace digitization, the use of financial management software in budgeting and planning slowly becomes the norm. By pairing it with robust accounts receivable management software, your business increases its efficiency in cash flow management.

Why is Financial Planning Essential For Your Business?

Every business experiences ups and downs as it goes along its journey. With the pandemic still going on, organizations must work harder and innovate to remain standing. A recent survey shows that six in 10 Singapore businesses are barely making ends meet amid the pandemic-induced volatility. When things go downhill, you must find a way to pull through. Your financial plan can come in handy as you navigate the rollercoaster of running a business. It can serve as a road map to your business’s monetary success, nudging you about your short-term and long-term financial objectives from time to time.

A financial plan sets your short and long-term financial goals in a timeline that you can follow. By organizing it into small chunks of steps, you can focus on single actions that accumulate into significant gains.

What Does Your Financial Plan Tell You?

Whether you’re a new business or an established corporation, keeping track of your financial growth and success is vital. Your financial plan reveals two principal details: your current financial data and your expected financial outcome in the future.

Your company’s financial plan lays out the following:

  • Where your business is right now in terms of finances and where you want it to be. 
  • The strategies you will use to generate your ideal income 
  • Your expected profits and future revenue stream
  • How your business will keep ahead of the competition
  • Your projected business growth on an annual basis
  • How your business will make the most out of existing capital and assets
  • The current and expected state of your cash flow
  • How you will handle common problems such as dormant financial receivables  

How Do Financial Plans Guide Your Company?

All this information is vital for you, your team, and various entities and individuals who can provide value for your company. Complementing your business plan with a comprehensive financial strategy can help justify why your business is good. 

All of the information found on your business’s financial plan allows you to:

  • Attract potential investors and funding to your company
  • Secure business loans from lenders
  • Have benchmark forecasts that you can strive to meet and exceed.
  • Better allocate resources and manage liabilities such as debt
  • Determine if your business is still viable or not
  • Protect your business by planning for the unexpected.

If you’re just starting out on your entrepreneurial journey, your financial plan can inform you whether your business is feasible or if you’re just taking an uncalculated risk. 

How to Create a Solid Business Financial Plan?

Your financial business plan should properly supplement your company’s overall business plan. Just like every other section of your business plan, your financial plan is not set in stone. You can modify it anytime for the right reasons. Remember that while the details written on your financial plan are crucial, at the end of the day, what you do with those details is what counts the most.

Here are the steps you can create or recreate your company’s financial business plan:

1. Conduct Research and Develop a Strategy

Everything starts with doing your homework, especially if you’re a startup since you won’t have any past data to gather information. This process goes hand in hand with the development of your overall plan. Before calculating any information to make predictions on the financial plan, you must put every other integral business component in place. This includes your business’s:

  • Operating procedures for activities
  • Products or services
  • Target audience
  • Market research
  • Market strategy
  • Predefined budget and expenses 

After outlining the core components of your business, you can now develop a plan to carry it towards financial growth using a predefined budget. By laying out what your company wants to achieve, you can determine the most productive steps towards it. You can answer questions such as how you’ll acquire financing, what level of talent you would need to source, and how to improve accounts receivable turnover. 

2. Create Financial Projections

Your business must have something good to look forward to in the future to attract investors. Financial projections show an estimate of your future revenues, expenses, profits, and net worth. It provides three essential points, a forward-looking income statement, a balance sheet, and a cash flow statement.  

  • Income Statement

A projection of this financial statement shows your anticipated revenue, expenses, and profit after the end of a specific period. By calculating your expected sales and the cost of those sales, you can reveal if your business can be sustainable.

  • Balance Sheet

A balance sheet forecast reveals your anticipated assets, liabilities, and owner’s equity during a particular point in the future. Ultimately, it shows what you expect your business to be worth during that future period.

  • Cash Flow Statement

This forecast shows the outlook of cash movement in and out of your business. By projecting a smooth cash flow (more money moving in than coming out), you can impress investors and lenders to stand by your company. 

Cash is what will eventually drive your company forward. At any point in your business’s life, having excellent cash flow gives you more flexibility to do the things that allow you to expand and grow. 

By examining past and present results to forecast growth, you can set realistic goals, formulate sound decisions, and tackle unexpected challenges. When gathering data and organizing your projections, financial forecasting software can help ease the process. 

Here at Peakflo, we have integrated our advanced accounts receivable management software with an intuitive forecasting tool, making it easier for you to anticipate your business’s most valued KPI – liquidity. 

3. Keep Track of Progress

Having a benchmark to aim for allows you to create straight pathways towards the results you want. After expressing your goals in clear and definite numbers, you can now monitor your progress and determine if it’s spinning in the right direction. 

You can always generate financial statements at any time and start comparing past results to your current. Yes, compiling detailed reports on paper can be intimidating, especially if you have to do it on the spot. However, you can simplify the process by utilizing financial management software to generate reports and forecasts quickly.  

4. Plan for the Unexpected

It’s not uncommon to run into uncertainty when running a business. But, now that you have developed your financial game plan and its supplementing forecasts, you can now review every detail to identify vulnerabilities and weak spots. For example, suppose you know that your business will eventually have to deal with b2b accounts receivables. In that case, you can brainstorm ways to maintain cash in the bank early on so that when cash flow takes an unexpected twist, you’ll have enough reserves to keep everything going.

Enhance Financial Planning with Business Financial Planning Software

Conventional tools such as spreadsheets might work if you’re just starting out in getting your finances together. However, as your business grows and expands, so will the demands for more streamlined financial management and team collaboration approaches.

By complementing your financial planning and management with software, you can begin to automate tasks that would otherwise take more time and effort. You’ll also be able to seamlessly retrieve gathered data to create your essential reports and projections.

How Can Peakflo Help?

Integrating cash management and AR platform with your existing financial tool puts you in a better position to maintain your ideal cash flow. With Peakflo, you can increase the efficiency of your AR operation, ultimately allowing you to get paid sooner rather than later. We also offer valuable tools that improve team collaboration and productivity so you can be sure that your finances stay in the right direction.

Connect your accounting software and start automating your accounts receivables with Peakflo today!  

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Financial planning often involves looking for funding to help take your business performance to the next level. Here are some strategies to explore.

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Financial planning is an iterative, ongoing process that helps your business reach its long-term goals. Financial planning strategies assess your business’s current financial position and allow you to adapt to market changes, forecast business growth, and achieve higher returns.

A typical financial strategy combines two key elements to help you reach your short- and long-term financial benchmarks. These elements are debt and investments. As you think about your financial strategy for the next year and beyond, here’s how to evaluate these options for fueling growth.

Start with goal-setting

Before you can determine whether to take on debt or pitch to investors, you must know the result toward which you are working. Set a SMART goal — one that’s Specific, Measurable, Achievable, Relevant, and Time-Bound — that you can break down into smaller financial targets.

For instance, most business owners aim to increase profit. However, there are more manageable goals that you can set along the way to earning more profit, such as:

  • Increase revenue.
  • Streamline operating expenses.
  • Improve customer retention.
  • Optimize pricing.

Set numerical targets and deadlines for these smaller benchmarks to get a clear picture of the resources and financial strategy that will help you make progress toward your larger objective.

[Read more: CO— Roadmap for Rebuilding: Planning Your Financial Future ]

How to use debt as a financial strategy

Loans are the most common form of debt that a company can use in its financial planning strategy. Loans from financial institutions, credit card companies, or even friends and family can be a good way to get the cash you need for short-term investments.

As a financial planning strategy, the appeal of using debt is that it’s relatively flexible. “Banks offer a range of different business loan products, including term loans, business lines of credit, equipment financing and commercial real estate loans, among other options,” wrote NerdWallet . “Unless you opt for a product that has a specific use case, like a business auto loan, for example, you can generally use a bank loan in a variety of ways to grow and expand your business.”

However, loans have strict eligibility requirements and can be slow to fund, involving a lot of paperwork and a strong credit score. New businesses may struggle to use debt in their financial planning strategy.

Loans are the most common form of debt that a company can use in its financial planning strategy.

How to use equity or investments in financial planning

Issuing equity (stock) is another way to fund your financial plan. Startups in particular can sell shares of ownership to investors to raise capital for growth, expansion, or acquisitions. This allows you to avoid taking on debt and can bring on partners with mentorship and advice to offer.

“With equity financing, there is no loan to repay. The business doesn’t have to make a monthly loan payment which can be particularly important if the business doesn’t initially generate a profit. This in turn, gives you the freedom to channel more money into your growing business,” wrote The Hartford .

The downside of equity financing is that you will need to share a part of your profit with your equity partners. Equity is best suited for financial strategies that require significant capital quickly.

[Read more: 4 Financial Forecasting Models for Small Businesses ]

Final tips for financial planning

Debt and equity are the key ways to ensure you have the cash flow to reach your financial goals, but there are other elements to consider in your strategy. Make sure you plan a safety net for unforeseen risks; build an emergency fund and get insurance to protect your business. In addition, review your financial results quarterly and annually to ensure your projections are realistic.

“As you look over your annual income reports, you can gain insight into the activities that led to improved revenue and double down on them to raise profits as part of your financial plan,” wrote FundKite , a business funding platform.

Revisit your financial plan frequently to make sure the funding options you explore are still serving your business goals. There are plenty of alternative funding sources — such as grants and crowdfunding — that can help you reach short-term benchmarks along the way.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

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Nine Steps You Can Take Right Now to Build a More Financially Stable Future

Taking even just one of these steps can set you on a better path toward financial success.

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Financial surprises often seem to crop up at the most inopportune times — your car breaks down, you have an unexpected medical bill, your air conditioner needs to be replaced. All of these situations, paired with poor money habits or a lack of financial planning, can create a major hole in your budget, leaving you feeling scared or anxious about how you’re going to climb back out.

But whether you have unexpected expenses, you spend above your means or you feel like you’re behind on saving for retirement, the key to finding stability is intention. Here, the financial and investment experts of Kiplinger Advisor Collective walk through the steps anyone can take right now to start building a more financially stable future and why doing so is key to living the life you want. 

Create a vision board for your life “The first step is to actually take a step back and create a vision board. The vision board should include tangible items of things you want in life, but it should also include values like family, health and more. The reason this is so important is that when we get clear on what we truly want in life, we can then use it to drive our financial actions to make our vision a reality.” — Derek Notman , Couplr

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Make time for learning “The best thing you can do to ensure financial success is devote time to learning. Reading even just one book can put you ahead of most of the population. Find 30 minutes a day to learn about money, whether that means waking up early to read or listening to an audiobook on your commute. Start with these two books: Financial Freedom by Grant Sabatier and The Simple Path to Wealth by J.L. Collins.” — Tyler Wright , Defining Wealth LLC

Analyze why your money is where it is right now “Take a deep, hard look at where your money is now and why it is there. This will give you a better perspective on what your relationship with money is and why you are in the financial position you are now in. Then, you can decide if this is the direction you want to go and determine what options you have available to you to change the situation.” — Deborah W. Ellis , Ellis Wealth Planning

Build up an emergency fund “Creating an emergency fund is a great way to start building a more financially stable future. Life happens, and some things are out of our control. By creating an emergency fund early on, you can help alleviate any unforeseen financial costs in the future without having to borrow against your retirement nest egg . The result is a happier and healthier financial future.” — Greg Welborn , First Financial Consulting

Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >

Start investing small amounts “Start investing money. This is a fundamental mindset shift from consumption to creation, from spender to investor, from having nothing to having something. Investing allows your money to grow. It can lead to you lowering the amount of hours you need to work. And you can invest with a small amount. My advice: Start small, begin right now and stay consistent. Your future self will thank you.” — Jason Vitug , Phroogal

Purchase a home “You have to live somewhere, so you are either a renter or a homeowner. Homeowners have an overall net worth that is 40 times that of renters. When, where and what home you buy is crucial, but renting for the rest of your life is a pure expense. Being a homeowner is buying an asset, and it provides a more stable future — just remember to financially manage all aspects of your home.” — John Bodrozic , HomeZada

Get clear on your numbers “Before you can know where to go, you have to know where you are. Gather your financial information and look at actual numbers rather than trying to do mental math or guessing.  Understanding the connection between your income, spending, debt and savings will help you prioritize, decide next steps and create a realistic plan.” — Chianté Jones , Dollars and Change

Start contributing to your retirement “Live under your means and pay yourself first. Take 10% of your net pay and save it until you have enough to live on for three months without pay. Then, invest in a retirement plan like an IRA or your company’s 401(k) . Companies will match at least 3% of your pay if you contribute at least 3% or more. If you don’t do this, you're losing that additional 3% they would have matched, as well as the tax benefit.” — Dennis Futch , The Tax Shop

Commit to doing better for yourself “A single journey begins with one step. The most important step that anyone can take is to commit to doing better for themselves, so start saving and investing today. Consistency is key, and be certain to understand that you defer some consumption and spending today to ensure that you can continue to pursue your interests, hobbies and passions in the future.” — Marguerita Cheng , Blue Ocean Global Wealth

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What is financial planning in business?

Table of Contents

What is financial planning?

Difference between a personal and business financial plan, how to create a financial plan for your business, develop a solid strategy, create a balance sheet, make cash flow projections, prepare a projected income statement, allocate your budget, monitor your results, plan your finances easily with countingup.

Planning and organising your finances is one of the most crucial parts of running your own business. Financial planning helps you prepare for what the future may involve and uncover ways to grow your company. 

But a financial plan involves much more than simply tracking income and expenses. To help you understand what financial planning is, this guide covers:

  • The difference between a personal and business financial plan

Read on to learn how Countingup can help you manage your financial planning with ease.

A financial plan serves as a roadmap for your economic growth, showing where you’re at right now, where you want to go, and how you will get there. 

You can create a financial plan for personal and business purposes, but these processes are slightly different. We’ll explain more about personal vs business financial planning later in this article.

Financial plans are essential because they force you to consider if you’re on the right track to achieve your business goals. Businesses don’t usually grow accidentally but as a result of hard work and careful planning. 

Working with specific goals in mind and a plan for reaching them increases your chances of taking your business where you want it to go. Otherwise, you risk stumbling around in the dark, focusing on things that won’t help your business grow. 

Most financial plans include much of the same information. However, there are some key differences between a personal financial plan and a business one. The reason is that an individual’s financial goals are likely different from those of a growing company.

For example, your personal financial plan may include a retirement plan, a strategy for investments, and a plan for buying a new house. You’ll also likely focus on making more money while paying yourself as tax-efficiently as possible.

On the flip side, your company’s financial plan is more likely to focus on goals like hiring more staff, buying new equipment, expanding your product or service offering, and purchasing additional inventory. 

These goals are entirely different from the hypothetical individual goals we just mentioned. Therefore, you need a different strategy for your business and personal financial planning.

What is important to include in a financial plan? Below we’ve listed some of the main documents and other aspects you need to create a robust plan:

Effective financial planning usually includes a strategic plan. Think about what you want to accomplish in the next year and ask yourself questions like:

  • Do I need to expand or hire more staff?
  • Do I need more equipment or new resources?
  • How will my plan affect my cash flow?
  • Will I need financing? If yes, how much?

Once you know where you want your business to go in the next 12 months, think about how much it might cost you.

It’s also good to think about what you would do if your finances suddenly deteriorated, perhaps from not getting enough jobs or selling enough products. Maybe you could put money aside when the business goes well to have funds available if money ever gets tight.

Your balance sheet is a snapshot of your business’s financial position, meaning how much money you have, how much you’ll receive, and how much money you owe. It’s called a ‘balance sheet’ because it calculates what you need to balance out.

A balance sheet should list your:

  • Assets: Such as unpaid invoices, money in the bank, and inventory.
  • Liabilities : Money you owe, credit card balances, loan repayments, and so on.
  • Equity: For small businesses, this is usually the owner’s equity, but it could include investors’ shares, retained earnings, and stock proceeds.

Financial planning also involves predicting how much money you’ll make and spend in the coming month, quarter or year. Record how much you expect to make from sales and what you think you’ll spend on expenses like bills, supplies, loan repayments, and so on. 

You can use a simple spreadsheet to calculate your cash flow projections. We have a separate guide that tells you all about what cash flow is and how it works.

Next, you’ll want to prepare a projected income (or profit and loss) statement to predict how successful you think your company will be. It can be helpful to include different scenarios, good and bad, to help you prepare for each one.

Income statements typically include:

  • Revenue: Money from sales.
  • Expenses: Money you’ll spend. 
  • Total income: Calculated as your revenue minus expenses before income taxes.
  • Income taxes: Such as Income Tax, National Insurance, and Corporation Tax for limited companies.
  • Net income: Your total income after deducting expenses and taxes.

Once you’ve created your strategy and filled in your balance sheet, cash flow, and income projections, you need to figure out where you’ll spend the money you make. 

Take your company’s overall budget (read more about how to budget money for your growing business ) and divide it into specific budgets. For example, one for hiring new staff, one for buying new equipment, and one for expanding your product or service offering.

Once you’re done with your financial planning, monitor your real-life results and compare them to your predictions. Monitoring helps you spot any problems so you can fix them before they get out of hand. 

It may be a good idea to hire a financial expert to help you put together and monitor your financial plan. Accounting software like Countingup can also help you keep track of your finances almost effortlessly.

Countingup offers sole traders and small business owners the chance to save time and money. 

With Countingup, your business current account and accounting software are available in one app. Coupled with our handy expense reminders, automated invoicing, and tax estimates, you can have complete confidence in keeping on top of your finances as you trade. 

The app’s realtime profit and loss dashboard gives an insight into your business’ performance and can give you the edge you need to make it a success. 

Find out more about Countingup here and sign up for free today. 

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Annual Financial Planning for Business Owners: 5 Tips for Creating an Effective Strategy

A robust and well-thought-out annual financial plan can help you boost profits and drive business growth in the new year. here are tips to get yours started..

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In an uncertain economy, effective financial planning and analysis are more important than ever. The end of a fiscal or calendar year is an opportune time for your business to reflect on and evaluate its progress, and begin strategizing for the year ahead. Developing a yearly financial plan can provide you with an overview of your business’s financial health, identify opportunities to reduce costs and help you set realistic goals for growth.

However, creating a yearly financial plan for your business can be a daunting task. While it may be tempting to put it off or forgo it entirely, doing so can have lasting implications for your business, both financial and otherwise. With a solid plan in place, you can make more informed spending decisions, allocate your resources effectively, save valuable time and minimize stress.

In this post, we’ll explore what a typical financial plan includes and provide you with five tips for creating your own.

  • What is the purpose of a financial plan?

A financial plan provides an overview of your business’s financial condition and projections for future growth. Developing a financial plan involves reviewing your revenue, expenses, assets, working capital, inventory and anything else concerning your financial affairs.

There are usually six key components in a financial plan: sales forecasting, expense outlay, a statement of financial position, cash flow projection, break-even analysis and an operations plan.

Several small business organizations offer free financial plan templates for small and mid-sized business owners to use. You can find templates for the financial plan components listed here via the US Small Business Administration (SBA) or SCORE .

Tips to help you develop your financial plan

1. revisit last year’s goals and performance.

Set aside time to review your financial plan from the previous year and revisit the financial goals that were set. What progress did your business make? Your evaluation should help you determine which goals you accomplished and which you might choose to revise or continue pursuing in the year ahead.

2. Review your operating expenses

Reviewing and tracking your operating expenses (OpEx) over time is a critical aspect of financial planning because it can help you identify areas to optimize so you can increase profitability. OpEx refers to ongoing expenditures your business incurs from core operations, including overhead costs such as rent, inventory, utilities, marketing and payroll. These are recorded as costs in your profit and loss (P&L) statement because they directly relate to the day-to-day cost of running your business.

Understanding operating expenses is essential for calculating your company’s overall profit and getting a clear financial picture of how operations are impacting your bottom line. With this information, you can determine your net profit and identify areas of opportunity and for improvement. For instance, if the cost of inventory has increased significantly, you may need to adjust your pricing or look into changing suppliers to protect your margins and improve profitability.

3. Forecast demand

Demand planning is an important step in developing your financial plan because it provides valuable insights you can use to optimize working capital and increase profitability, efficiency and customer satisfaction. It involves analyzing your historical sales, consumer trends and seasonality data to improve your ability to efficiently meet customer demand. The demand planning process combines sales forecasting, supply chain management and inventory management to strike the right balance between sufficient inventory levels and customer demand.

Failing to plan for demand can have major consequences for your business. For example, excess inventory ties up working capital , adds to carrying costs and increases the risk of the business being stuck with low-value or obsolete inventory. Alternatively, poor demand forecasting can leave you short on products, which can result in back orders or leave you scrambling last minute for higher-cost raw materials.

4. Map out goals for the year ahead

With your review of operating expenses, and last year’s performance and goals freshly in mind, you can begin the process of setting new financial goals for the year. Start with what you want to achieve and outline actionable steps you can take to meet these goals. If appropriate, you might also include stretch goals .

It’s helpful to break down your goals into measurable parts to make them easier to achieve. Whether you want to improve the financial health of your business, increase market share or create a new product, SMART goals — ones that are Specific, Measurable, Attainable, Realistic and Timely — can help you get there. Be precise with the numbers you want to see at the year’s end, too. For example, if you’ve set a goal of $200,000 in revenue, you could split this into quarterly, monthly or even weekly goals, so you can better gauge your success throughout the year.

Setting objectives and key results (OKRs) is another valuable approach to goal setting and tracking progress. OKRs comprise an objective (a clearly defined goal) and three to five key results (specific measures used to track the achievement of that goal). As you are setting your goals, ensure you consider growth opportunities and put money aside to properly invest in them. A commitment to growing your business will drive innovation, profit, employee retention and customer satisfaction.

5. Consider cash flow and working capital

Paying close attention to your cash flow and working capital is one of the most important aspects of financial planning. Conducting a comprehensive analysis of your key financial statements and metrics will tell you how much money is flowing in and out of your business. Tracking and managing cash flow can help you uncover unexpected cash flow gaps, or it may indicate you have a healthy enough cash reserve to make investments. For example, even if sales are high, you could be at risk of cash shortages if invoice payments are delayed in accounts receivable.

Positive cash flow enables you to cover your day-to-day operating costs while also building a reserve for investments and/or emergencies. Monitoring and forecasting your cash flow and working capital enable you to predict cash flow shortages and make more informed, proactive financial decisions. While drafting your financial plan, you’ll want to determine if you have the money you need to cover your overhead expenses and achieve the goals you have set.

If your working capital falls short of what you’ll need, it’s important to investigate why that is and explore debt-free ways to improve your company’s position . Consider implementing strategies or solutions that can help you optimize your working capital quickly.

For example, consider improving your billing practices, updating invoicing terms or leveraging an early payment program with dynamic discounting to get paid faster and free up cash. Or, see if you can increase working capital by reducing DIO (days inventory outstanding) or DSO (days sales outstanding) to tighten your cash conversion cycle . In some cases, you may need to use a combination of financial strategies and solutions to achieve your goals, or otherwise consider your options for working capital financing .

The takeaway

Strategic financial planning can help you find ways to overcome supply chain disruptions, handle rising costs and identify innovative solutions to optimize your financial position. But as a small to mid-sized business owner navigating a fluctuating economy, it can be challenging enough to plan on a quarterly basis, let alone annually.

It can be even more difficult if you lack the in-house expertise to help you create and realize your financial goals. If this is the case, it may be in your best interest to hire a finance manager to help your company execute a robust financial plan.

Ultimately, taking the time to review your finances, set goals and put together a plan to accomplish them will propel your business forward in the new year.

In this article:

  • 5 tips to help you develop your financial plan

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Grow Your Financial Advisory Firm Fast with These Tips

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Launching a financial advisory business is hard, and that's an understatement. It's full of long days of trying to market your firm and sell your services without getting to do what you really want — work one-on-one with clients.

All you really wanted to do when you started your practice is to help people save and plan for their futures . To make their dreams come true. Yet now you just find yourself drained, both emotionally and physically.

Now you are left wondering, "How can I grow my firm and do it quickly so I can start doing what I really want to do?" Before we get into some ways to grow your business , let's first talk about the word "quickly."

What It's All About

Growing a financial advisory firm, especially from scratch, can take years, and there is a very good reason for this. A financial advisory business is not about the investments or the plan. It is about the relationships you foster with clients. Before anyone will put their money with you they want to know, like and trust you. Very rarely do you meet someone at a networking dinner and they sign up for your services the next morning. They need time to get to know you before they hand over their hard-earned dollars.

With that in mind, you should approach marketing in a way that focuses on building trust and a relationship. Unfortunately, that does not always happen quickly. But if you continually work on getting prospective clients to know, like and trust you, then it will happen faster than if your marketing isn't focused on relationship building.

Here are three ways to grow your practice while focusing on the relationship.

New-Age Networking

Networking is not a new technique for trying to build your firm, but seldom do you see financial advisors doing it the right way. Instead of going in looking for leads, go into every event looking to start a friendship. Even if the folks you encounter won't ever be clients, look to learn how you can help them without asking for anything in return.

Remember what mighty salesman Zig Ziglar said: "You can have everything in life you want, if you will just help other people get what they want." Network to make friends and help others grow and you will begin to build relationships with others who will happily refer you or become your client because they know, like and trust you.

Valuable Volunteering

Find one or two non-profit organizations you like and start volunteering your time. This is a great way to meet people with similar interests, help the community and build new relationships. After working with the same organization for a while, you will start to establish relationships with those around you. They get to know and trust you because of how you follow through and donate your free time to help others. 

When people ask for referrals to an advisor, your name will come to mind. Again, remember that people refer people that they know and trust, and being selfless in a volunteer situation can help make this happen.

Try Public Speaking

Speaking in front of groups is a great way to build credibility and to get your name out. When you speak in front of someone, you are automatically looked at as the expert. There is, however, one thing to keep in mind as you try and build trust with new prospects: Don't sell.

This may go against what most people say you should do at the end of a presentation, but because you're in the financial industry, most people are automatically looking for the sell, the catch. Approach your talk from an educational perspective, where listeners can take the information out of the room and still make it work for them. Then when they need someone to help, they may be more inclined to call you.

There are two things you can do to open the door for the audience to come to you. First, tell everyone that you will stick around after the presentation to answer any questions. This will allow those that are interested to come up and start the conversation so they feel like they are in charge. Second, tell the audience that if they want a copy of the slides, they should e-mail you so you can send them over. This way they can initiate contact to get something; it's not an in-your-face sales tactic.

The Bottom Line

The fastest way to grow your advisory business is to create a scenario where people know you, like you and trust you. Do this by helping others achieve their goals and by educating without selling. You will be amazed at how fast your business grows.

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I'm a HENRY financial planner who makes $125,000. Here's how I manage my money — and the mistakes I see others making.

  • Georgia Lord, a HENRY and financial planner, earns a salary of $125,000 but doesn't feel wealthy.
  • Lord's financial goals include early retirement, travel, a wedding, and a larger NYC apartment.
  • She warns HENRYs against investing without knowledge and recommends financial planning for everyone.

Insider Today

This as-told-to essay is based on a conversation with Georgia Lord, a 27-year-old certified financial planner and HENRY in New York City. It has been edited for length and clarity.

I studied finance and started my career in Brisbane, Australia.

When I was 22, I moved to New York to join Morningstar in the credit ratings division. I pivoted to financial planning for a Canadian Fintech called Wealthsimple a year later.

I discovered that I love financial planning and working one-on-one with clients. Last year, I got my certified financial planning license .

I now make a comfortable living, but I consider myself a HENRY and have a way to go before I hit my goals.

I make 6 figures but don't feel wealthy

I earn a base salary of $125,000 and manage to live in New York City by being frugal. I love a bargain or a sale. I save for certain things I want, and I'm good at it because it's my job. I'd feel like a hypocrite if I didn't do what I told others to do.

I save on my Broadway tickets by entering into the lottery. I splurge on some things — I spend around $600 monthly on dining out. I also travel a lot, so I automate a certain amount of money every month for travel.

I lived with roommates for four years, and I've lived with my boyfriend for the last year. We split the rent more favorably to me since he makes quite a lot more, so I contribute $1,500 per month. That's also been helpful for managing my finances.

I have a few financial goals

One of my financial goals is to save up for the professional designations available in my field since they can be expensive.

I want to retire early , and I want to keep prioritizing saving for travel and visiting my home in Australia, which is not cheap.

I'm also saving for a wedding and improving cash flow to move into a larger apartment.

To reach my savings goals, I automate at least 20% of my paycheck every two weeks and deposit it in a high-yield savings account . I use Wealthfront but also like Ally, CapitalOne360, and Betterment. I preach that to all of my clients who are HENRYs : Automate your savings for big goals.

There's not a number in mind that I'm looking to reach to feel rich, but I will feel successful if I can achieve my goals without sacrificing my lifestyle in the process. Being in a great financial position today and in the future is what I consider rich.

I see HENRYs making one big mistake

Because the market did well in 2023 , I've noticed HENRYs (both in my personal life and those I see as clients) wanting to throw money into it without thinking about how they will fund other goals, like a down payment for a house.

Not only is it harder to access funds once they're invested, but there can also be financial benefits to other strategies. For example, some stock market returns might've been 3% last year, but some high-yield savings accounts have a return of 4.5%.

I still invest in the market, but I do so strategically. I have a 401(k) , Roth IRA , Traditional IRA , brokerage account with Betterment, and a brokerage account in Australia. I mostly invest in ETFs — I'm not a stock picker and love the diversity that ETFs provide.

It can be difficult to figure out how to divide your money and where to put it, so I recommend HENRYs work with a financial planner . We're not just for the rich — I've worked with clients in many different financial situations, and all can benefit.

Even if you're not ready for a financial planner, take the time to think through what your goals are and what you want to spend your money on. That's just as important as putting $100 into the stock market every week.

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Watch: A financial planner reveals an important money lesson young people can learn from the rich

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Leonard Financial Solutions Introduces Innovative Retirement Planning Tool

Leonard Financial Solutions introduces a pioneering retirement planning tool, blending growth and protection strategies, aimed at empowering individuals to achieve their financial goals for retirement.

New Jersey, United States - February 21, 2024 —

Leonard Financial Solutions, a provider of retirement planning services, is proud to introduce a revolutionary retirement income planning tool. With a focus on personalized guidance and a comprehensive approach to financial security, this new tool, "Two-Bucket Strategy," is designed to empower individuals toward a secure and fulfilling retirement.

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The primary goal of Leonard Financial Solutions' new retirement income planning tool is to help individuals effectively plan for and achieve their retirement income goals. This innovative tool achieves this by employing a unique framework centered around two distinct buckets: the Growth Bucket and the Protected Bucket.

The Growth Bucket:

The Growth Bucket within the retirement income planning tool focuses on accumulating assets and generating potential growth. These products may include:

  • Stocks: Providing the possibility of gradual growth over an extended period.
  • Mutual Funds: Diversified investment options aimed at delivering capital appreciation.
  • Bonds: Provides balance in most portfolios for volatility.

The Protected Bucket:

In contrast, the Protected Bucket is designed to prioritize the security and protection of the principal/premium. This bucket includes products that aim to offer stability, protection against market volatility, and a focus on preserving capital. Customers can find peace of mind with products such as:

  • Fixed Index Annuities
  • CDs (Certificates of Deposit): Providing a secure, fixed-interest investment with principal protection.
  • Bank Money Market Accounts and Cash

Founder Jonathan Leonard was recently interviewed on this topic on the Business Innovators Radio Network , where he discussed the importance of incorporating protected income strategies for retirees.

Clients can access Leonard Financial Solutions' cutting-edge retirement income planning tool through a team of experienced financial professionals. By engaging in comprehensive discussions and consultations, individuals can tailor a retirement income plan aligned with their needs, preferences, and risk tolerance.

Its holistic approach to retirement income planning sets Leonard Financial Solutions apart. Individuals can benefit from a balanced and customized approach to securing retirement income by integrating growth-oriented and protected assets within a comprehensive framework. Additionally, their team's commitment to personalized guidance and support ensures that customers receive tailored solutions that address their unique financial circumstances and aspirations for retirement. With a focus on education, transparency, and customer-centric service, Leonard Financial Solutions is a trusted partner in guiding individuals toward a financially secure retirement.

The new retirement income planning tool offered by Leonard Financial Solutions represents a significant advancement in empowering individuals to achieve their retirement goals. By embracing a balanced approach to growth and protection, individuals can confidently navigate retirement planning, ensuring a fulfilling and financially secure future.

About Leonard Financial Solutions:

Jonathan Leonard founded Leonard Financial Solutions in 2017 out of his strong desire to improve the lives of everyone he meets. Leonard Financial Solutions' primary focus is retirement planning for people ages 55 and over. Jonathan has worked for non-profit companies and church ministries in the past, and the company is committed to donating 10% of all their profits to 501c3 charities and organizations. Leonard Financial Solutions has clients nationwide and is licensed in all 50 states.

Learn More at Leonard Financial Solutions

Contact Info: Name: Jonathan Leonard Email: Send Email Organization: Leonard Financial Solutions Website: https://www.leonardfinancialsolutions.com/

Video URL: https://youtu.be/jy-JxJ-x0sE

Release ID: 89121949

If you encounter any issues, discrepancies, or concerns regarding the content provided in this press release, or if there is a need for a press release takedown, we urge you to notify us without delay at [email protected]. Our expert team will be available to promptly respond within 8 hours – ensuring swift resolution of identified issues or offering guidance on removal procedures. Delivering accurate and reliable information is fundamental to our mission.

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How Fast Should Your Company Really Grow?

  • Gary P. Pisano

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Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal for leaders—and an elusive one.

To achieve that goal, companies need a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow. This article offers a framework for examining the critical interdependencies of those decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics.

Why leaders should take a strategic perspective

Idea in Brief

The problem.

Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies barely grow at all.

While external factors play a role, most companies’ growth problems are self-inflicted: Too many firms approach growth in a highly reactive, opportunistic manner.

The Solution

To grow profitably over the long term, companies need a strategy that addresses three key decisions: how fast to grow (rate of growth); where to seek new sources of demand (direction of growth); and how to amass the resources needed to grow (method of growth).

Perhaps no issue attracts more senior leadership attention than growth does. And for good reason. Growth—in revenues and profits—is the yardstick by which we tend to measure the competitive fitness and health of companies and determine the quality and compensation of its management. Analysts, investors, and boards pepper CEOs about growth prospects to get insight into stock prices. Employees are attracted to faster-growing companies because they offer better opportunities for advancement, higher pay, and greater job security. Suppliers prefer faster-growing customers because working with them improves their own growth prospects. Given the choice, most companies and their stakeholders would choose faster growth over slower growth.

Five elements can move you beyond episodic success.

  • Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation (PublicAffairs, 2019).

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  1. 6 Ways to Improve Your Business's Financial Planning Approach for 2022

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  2. Why Financial Planning Is Important For Generation X

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  3. Company Growth Strategy: 7 Key Steps for Business Growth & Expansion

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  4. What is Financial Planning,Types, Meaning, Objective, Importance & FAQs

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  6. Why is Financial Planning Important?

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    Starting a financial planning business is a multi-step process that requires patience, as it may take some time to see your efforts being to pay off. With that in mind, here are some of the most important tasks you'll need to tackle to get your business up and running.

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  4. Tips on Starting a Financial Planning Firm

    Growing Demand for Financial Planners . ... Many private and even corporate practitioners will readily tell you that financial planning is the best business in the world.

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  8. How to Grow Your Financial Advisory Business

    How to Grow Your Financial Advisory Business. October 20, 2021. There's nothing wrong with wanting a lifestyle practice, but growth is a primary goal for many financial advisors. It could be that you want to grow to a point where you can have a lifestyle practice, or maybe you enjoy the work of building up your business.

  9. What to Know About Starting a Financial Planning Business

    Choosing a financial planning business is a worthwhile route as there is definitely a growing demand for certified financial planners (CFPs), advisors (CFAs), and other financial services. ... Book your demo today, and let's walk through how a visual map can help you grow your brand new financial planning business. TJ Hill November 15, 2022.

  10. The Five Stages Of Growth In A Financial Planning Firm

    Start-Up Phase The start-up phase is the beginning of any financial planning firm. It's about bringing in the first clients, getting enough revenue to have sufficient take-home pay to be viable and earn a living.

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  16. Financial Planning: Growing as a Small Business

    Steps to be able to clarify goals are: Decide - Decide exactly what you want. Write - Write it down. Set - Set a deadline for your goal and assign a dollar amount. Break - Break down big goals ...

  17. The Ultimate Guide to Business Financial Planning

    All of the information found on your business's financial plan allows you to: Attract potential investors and funding to your company. Secure business loans from lenders. Have benchmark forecasts that you can strive to meet and exceed. Better allocate resources and manage liabilities such as debt.

  18. Financial Planning Strategies to Reach your Money Goals

    Financial planning is an iterative, ongoing process that helps your business reach its long-term goals. Financial planning strategies assess your business's current financial position and allow you to adapt to market changes, forecast business growth, and achieve higher returns.

  19. Business planning essentials for financial advisors

    Capital Group's Business planning blueprint for financial advisors workbook provides details on five such steps and includes a 21-day playbook to help jump-start your efforts. Pick a framework that feels right to you and get started. The first step in any program aimed at optimal performance is: Know where you are today.

  20. Nine Steps to Take to Build a More Secure Financial Future

    Then, invest in a retirement plan like an IRA or your company's 401(k). Companies will match at least 3% of your pay if you contribute at least 3% or more. Companies will match at least 3% of ...

  21. What is financial planning in business?

    Planning and organising your finances is one of the most crucial parts of running your own business. Financial planning helps you prepare for what the future may involve and uncover ways to grow your company. But a financial plan involves much more than simply tracking income and expenses. To help you understand what financial planning is, this ...

  22. 5 recent wealth management M&A deals to watch in 2024

    In December, Edelman Financial Engines acquired Pension Plan Systems and its affiliated RIA New England Investment Consultants, adding $1.5 billion in assets under management from over 500 clients ...

  23. Annual Financial Planning for Business Owners: 5 Tips for Creating an

    A financial plan provides an overview of your business's financial condition and projections for future growth. Developing a financial plan involves reviewing your revenue, expenses, assets, working capital, inventory and anything else concerning your financial affairs. There are usually six key components in a financial plan: sales ...

  24. Grow Your Financial Advisory Firm Fast with These Tips

    Growing a financial advisory firm, especially from scratch, can take years, and there is a very good reason for this. A financial advisory business is not about the investments or the...

  25. Financial Planning: How It Helps Achieve Business Goals

    Financial planning is the process of documenting a person's or business' current financial situation and identifying financial goals and how the person or business will achieve them. A financial plan itself is a document that serves as a roadmap for a person's or business' financial growth. It shows where a person or company is ...

  26. HENRY Financial Planner Shares How She Manages Her Own Money

    Georgia Lord, a HENRY and financial planner, earns a salary of $125,000 but doesn't feel wealthy. Lord's financial goals include early retirement, travel, a wedding, and a larger NYC apartment ...

  27. Leonard Financial Solutions Introduces Innovative Retirement Planning

    Leonard Financial Solutions introduces a pioneering retirement planning tool, blending growth and protection strategies, aimed at empowering individuals to achieve their financial goals for ...

  28. How Fast Should Your Company Really Grow?

    Summary. Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal ...

  29. Rethinking Business Financing Norms: Challenging The Status Quo

    Preparation for success means educating yourself about methods, seeking advice from financial experts, staying informed about market and regulatory changes, and building a team to help manage all ...