3 Common Mistakes Advisors Make When Planning Their Year

January 12, 2017 Customer Team

Creating an effective plan for the year requires you to first look to the past. Great practitioners understand the value of re-examining the previous year’s plan, strategy and results. They debrief themselves, honestly and in detail. The best advisors leverage last year's learnings to craft a strong business plan. Still, they often make a few mistakes as they plan out their year ahead.

Here are those three common pitfalls so you can avoid them!

Assuming too much cross-sell and upsell in sales projections

The foundation of your sales projections is the number of services you expect to sell to each client. Often advisors plan to sign each client up for a variety of different services. Bookkeeping, taxes, virtual CFO services. But at year end they’re left wondering why revenues weren’t as robust as predicted.

A common pitfall is to assume a certain level of cross-sell and upsell with each client but fail to deliver. In most advisor industries the level of cross-sell is as low as 1.1 products per client. A lot of money is being left on the table. But more importantly a lot of real client needs are left unmet. Which means client relationships are not as robust as they should be.

To sell more to existing clients take a systemic approach. This means optimizing your workflow. Creating free time for both you and the client. Using your free time to give advice and add real value. That way you create a positive bias towards your services. And when you are ready to ask the client for more business they will be more likely to say yes.

Creating a business plan in isolation

Another common pitfall comes from the echo chamber effect. Which is when you make assumptions about your business in isolation. Not having people to bounce your ideas off can mean you make faulty assumptions. Which can lead to an unachievable plan.

It’s like when you decide you’re going to get yourself in shape. You come up with a plan. But experts say you should also tell everyone you know what you are doing. Your peers will help make sure your plan is realistic and achievable.

To dodge this pitfall make a special effort to build your peer community. Cultivate a circle of like-minded advisors who can help keep you honest. Look for people with experience in your business and market. Find those external voices who can poke holes in your reasoning. Who will stand up and tell you when you’re drifting off course.

Selecting a niche without considering client feedback

Advisors choose their niches with the best of intentions. They seek to harness the power of increased focus. They expect to become more efficient. They will maximize their expertise. But to realize those benefits they need to get their niche choices right.

The assumptions you make about the market you serve sometimes create pitfalls. Some advisors choose their niche based on what they believe they do well. But they fail to take into account what their clients are experiencing.

That's a pitfall. A well-intentioned advisor might focus on a service they consider important. But it may have lower value to clients. For instance, an practitioner may put a lot of effort into developing tax planning. But their clients really need quicker statements and better interpretation of them. A disconnect like this leads to weaker relationships. Less perceived value being delivered.

To avoid this trap it’s important to talk to your clients. Clarify your niche by determining what they really need from you. Recognize where you are valued in the market.

Wrap up

When creating your plan for the coming year first take a look back. Look for ways to increase efficiencies and maximize great client experiences. Look at your niche through your clients’ eyes. Develop a peer community who can test your assumptions and support you in executing your plan. And, do the right things with each client to prime them to say yes when you ask for more business. Avoid these three pitfalls and give yourself the chance to beat next year’s projections.

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