Consistent, organic growth is one of the industry’s greatest challenges, but few firms actually go through the exercise of intentionally laying out how they’ll achieve it. A true strategic plan isn’t just a document—it’s a blueprint for sustained growth and long-term success. So, where should you begin building a plan for your firm?
Begin with the End in Mind
The reason for this approach is simple: if you aren’t able to clearly define where you want your firm to go and what you’re building, it will be nearly impossible to make the right near-term decisions.
If anything, your firm should be able to clearly define the following:
– Vision: What are you building? A local niche practice, a regional multi-office organization, a lifestyle practice or a true, growth-focused operating organization?
– Mission: What core values and standards do you want your firm to uphold? How do you want to be perceived by clients and the broader market?
– Value Proposition: To whom are you delivering services? What segment of the market are you targeting, and what unique value can you offer them?
Establish a Baseline and Understand Where You Are Today
Before charting a course forward, it’s essential to understand where your firm currently stands as a reference point for future comparison, but also to highlight key areas of focus. At a minimum, the core components of this baseline assessment should include market positioning and financial health.
Market Positioning
With increasingly scaled competition, expanding service offerings, and thus compressing margins, understanding your target market and aligning your value proposition to meet the specific needs for your clients is critical.
– Target Market: Who are you serving and what do you provide them?
– Service Model: Does your business model allow you to profitably serve this clientele?
– Differentiators: What sets your firm apart? Service and quality? Specialized knowledge? Niche expertise? Depth of service? Something else?
Your positioning has significant impact on your organic growth potential and referral power.
Financial Health
While managing purely to maximize financials is rarely recommended, a business with a weak financial position has minimal operating leverage. Key breakdowns for financial health should include:
– Focusing on growth: Track not only overall growth or shrinkage in fees and Assets Under Management (AUM), but where it comes from (new clients, new assets, or market growth)
– Benchmarking your firm’s performance: Compare against industry standards and use metrics such as:
- AUM
- Net New AUM
- New Client Growth
- Revenue Per Advisor
- Earnings Before Interest, Taxes, Depreciation, Amortization Margin
- Client Retention Rates
Define Your Goals
Your plan should be a combination of long and short-term objectives. These might include:
– Financial Goals: Increase AUM by 15% over the next 12 months through a combination of organic growth and strategic acquisitions.
– Client Acquisition Goals: Boost new client acquisition by 50% in the next two quarters by implementing a targeted digital marketing campaign and enhancing referral programs.
– Growth Goals: Identify specific milestones, such as establishing an equity distribution program or establishing a human capital strategy for the organization.
Continuously Track and Refine Your Plan
A strategic plan is not static and must evolve as your firm grows and the market changes:
– Track Alignment: Institute key performance indicators.
– Update the Plan: Schedule annual reviews to reassess your strategic plan.
– Identify Misalignment: Where does your firm’s current position diverge from your desired future state?
– Client Segmentation: Are you serving and prioritizing the right clients?
– Ownership and Equity: Is your ownership structure conducive to developing the next generation of leaders and owners, or is there a need for equity restructuring?
– Growth Targets: Are your goals realistic?
Building a strategic plan for your firm can ensure that your firm is well-positioned to thrive. If you have questions about how you can begin building your roadmap to sustainable growth, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Rob Madore, Vice President, at 440.462.2209.
