Business outcomes - It pays to plan ahead

But if the results of The Adviser straw poll in late 2009 are anything to go by, business planning remains a low priority for brokers, despite the increasingly competitive environment in which they are operating.

The Adviser poll asked brokers whether they had implemented a business plan for 2010.

At last count, 61.1 per cent of the 185 respondents said they hadn’t, while only 23.8 per cent said they had a plan ready to go.

Only 15.1 per cent said their business plan was nearly complete.

The Loan Arranger’s Scott Marshall is among those brokers that believe in planning. He says even the most successful brokers can fail to meet their full potential if they don’t take stock and map out an achievable business plan for the year ahead.

“By having a business plan in place, we are able to define our sales goals as well as outline who is doing what and when,” Mr Marshall says, adding that it is also useful to be able to compare and contrast actual sales against targets, on a month by month and year by year basis.

GOAL ORIENTATED

Mr Marshall says in creating a sales plan as part of their business planning strategy, brokers should start by thinking about what their objective is.

“An effective sales plan should be realistic and ideally contain short term goals and more long term ones,” he says.

“In most cases [the objective] will be getting a return on their investment. In that respect, brokers need to have a good knowledge of the market and tailor the plan to their skills base. They also need to be aware of what it is they are offering to the client in the way of products and services.”

He says by having business objectives laid out

in black and white, achieving them becomes a whole lot easier.

Often brokers can get weighed down in the day-to-day grind, they forget to look at the bigger picture. They know what needs to be done, but unless it is sitting in front of them, starting them in the face, achieving those desired business goals becomes an unachievable nightmare.

nMB’s director of sales and marketing Sal Cinque says setting business targets is “a little like planning a holiday”.

“Home is usually the starting point (situation analysis), the destination is chosen (desired objectives), and then a means of transport is selected (strategy to achieve the objectives).”

Mr Cinque says it’s important for brokers to be able to measure their past performance so they can improve on it – which is where a sales plan comes in.

“The objective of measuring results is to provide brokers with a clear understanding of their current state of play before discussing future business goals,” says Mr Cinque.

“Setting sales objectives provides direction, purpose and motivation in the management of the business.”

As part of its plan, nMB has developed a software business review system that converts sales data into meaningful information. The aim is to help brokers improve their sales performance by understanding their historical performance, including any cyclical and seasonal behaviour, as well as uncovering underlying business trends that may inform their future sales planning.

The software comes with budgeting tools to help brokers identify the fixed and variable costs of the business, a ‘breakeven’ calculator that analyses the required sales to cover the fixed and variable costs, and a business plan template that can be used to set the macro direction of the business.

It is also useful in identifying any macro factors that might be affecting the market in general and that are outside the broker’s control, including which months are traditionally quieter.

DATA CHECK

1st Street managing director Jeremy Fisher says he likes to know what periods of the year are quiet because “I know when I need to work harder and when I need to start putting in the ground work”.

“I am also interested in comparing six monthly and yearly periods to get an overall picture of my business over a longer term. I will often look back over the past three years to get a snapshot of how the business has been faring,” he says.

Mr Fisher has a general sales plan in place that he uses to record his figures for the month and then compare those results with previous months.

But while Mr Fisher says a plan is great for keeping track of everything, “especially sales”, it is important that it remains relatively informal and simple.

“The simpler the plan, the more likely I am to stick to it,” he says.

“I think for brokers, the best business plan is one that has realistic and achievable targets.”

Mr Fisher says brokers can get so caught up in writing their business goals that they don’t stop to think about how attainable said goals are.

In this respect he believes it is important for brokers to keep the bigger picture in mind.

Mr Fisher says he lives by the Keep It Simple policy. He says a simple goal is not only more likely to be achieved but can also be changed easily to suit the ever changing business conditions.

“Goals should be broad, general ideas about the future, because they can be shaped at a later stage and are more attainable,” says Mr Fisher.

Mr Fisher says it is important that brokers keep the big picture in mind when writing their business plan for the year ahead.

“A broker should decide where they want their business to be in the future, then write down what they are going to do and when in order to get there,” says Mr Fisher.

“Having an effective sales plan in business is like having GPS navigation in your car – it takes you where you want to go, enables you to focus on your main task and gives you a more comfortable ride along the way.”

But while setting business goals is a great idea, Mr Fisher says brokers should not be too disheartened if they don’t meet their targets.

Incidents happen and obstacles arise that can have a significant impact on the business, changing the sought after final outcome.

“If that happens, don’t worry. Just pick yourself up and shape your business goals to meet the new conditions. Never see anything as a failure, but rather an opportunity for change.”