One of the Fit and Proper requirements listed in chapter 5 of Board Notice 194 of 2017 is that each FSP must have a business plan that includes the aims and scope of the business as well as the business strategies. As we enter the second half of 2019, FSPs should begin planning ahead and considering the needs of the business in 2020. The Business Plan should be reviewed and updated according to changes in the business. In this article we look at what to include in your Business Plan and important points to remember.
Creating a business plan is like thinking about and planning for a holiday. Planning and organising are necessary to make a holiday a success. You need to consider where you want to go, how you are going to get there, how much money you need, how long you will be away and what you need to do to make it happen. If you did not plan your holiday, would you actually go away, or would it remain a concept?
As Benjamin Franklin once said, “If you fail to plan, you are planning to fail!” Just as planning for a holiday is necessary, you need a business plan that will work for you and help you achieve your dreams.
What should your business plan contain?
Your business plan should include information such as:
- Your mission and vision. This is about what drives and inspires you and your business.
- Information about your business. Who are you, who works for you, what services do you offer and what do you specialise in?
- Your target market. Who are the ideal clients you want to attract to your business? What are their demographics, specific concerns, needs, objectives and investable assets? What will you do for them? Consider how you will reach your target audience. Who can introduce you to these clients? Who are your centres of influence?
- Products, services and processes. Identify your products and services, as well as the processes that define your unique client experience model. How do your service model and processes differ from those of your competitors? What gives you a competitive edge? Also think about your compensation for each of your services. Articulate your fees and be able to justify the cost of your time if necessary.
- Your value proposition. What makes your business activities and service offerings attractive is your marketing message to attract your targeted clients. Your value proposition should describe how your products and services will benefit clients, what they can expect from you and what makes you stand out from competitors. Think about what your clients value, as they will be willing to pay if you are doing something they value. Together with the previous point, this will assist you to adapt to the proposed RDR changes.
- A SWOT analysis. This requires a deeper look into your business and involves four elements:
– Strengths. List the strengths in your business, namely your competitive advantages, and how you can use them.
– Weaknesses. What are your weaknesses and how do you improve them?
– Opportunities. Looking outside your business, what are the opportunities for your business and how can you take advantage of them?
– Threats. These are things over which you do not have control, but you need to be aware of and understand how to respond.
- Your goals and expectations. These include financial goals, such as assets under management, production goal and number of clients, as well as operational goals such as staff, technology and your office.
- Marketing ideas. How will you achieve your goals? What activities need to be implemented to do so?
- Measurement. Once you set goals, how will you measure progress to see if you are achieving your goals within your deadlines? How often will you do this and who will be tasked to do it?
Points to consider about business plans
When developing your business plan, keep it simple. A few written ideas are better than none.
Involve the right people in its development. These would be people involved in your business, people that can assist with information and best influence the process. Internally it could be, managers, staff members and representatives. It is also good to get an external view from your accountant, product suppliers, consultants and compliance officers.
There should be accountability for your business plan, so identify who is responsible for what and by when. You’ll also need to review and adjust it regularly, as a business plan is not something that is created and then tossed aside. Rather, it is a living, breathing document that should change in response to you and your business.
Masthead offers business planning seminars, which are CPD accredited, to assist you to draw up a business plan to suit the needs of your business. Masthead can also assist you with personal implementation of a business plan. Read more about this seminar or contact your regional office for more information.