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Current news and trending topics for sales and financial industry professionals


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Stabilize Your Operating Costs: Balance The Demands Of Increased Client Service Expectations

Stabilize Your Operating Costs:  Balance The Demands Of Increased Client Service Expectations

Surprisingly many business owners have an unclear view of their operating costs, which is key to achieving sales goals.  What are the ongoing costs for operating your business?

Operating costs are the expenses that you have related to the day-to-day operations at your firm.  Your operating costs will be in one of two categories:

  • Fixed
  • Variable

A fixed cost is, as the name suggests, costs that you will incur regardless of how much business you do.

Some examples of fixed costs are:

  • Salaries
  • Office rent
  • Utility bills
  • Loan payments for any start up costs
  • Banking Services

Variable costs are those which will change according to how much business you do.  Variable costs play a role in projecting your profit and break-even points for your business. Some examples of variable costs are:

  • Sales
  • Sales Commissions
  • Marketing

You will be facing choices that begin to increase your operating costs.  For example, you add a team member to assist in keeping up with the service expectations of your clients, thus, for each salary added, the more clients you must add to cover your costs.

The time you spend with your clients is a service that you don’t want to compromise.  There are other ways that you can re-evaluate your operating costs.  Consider outsourcing items such as;

  • Web-site maintenance
  • Mailings
  • Compliance
  • Marketing Initiatives
  • Printing Services
  • Kill your power
  • Rent instead of buy
  • Stay out of the airport
  • Get rid of your printers

Sure, some of these ideas cannot be cut completely.  Compliance issues will prevent you from ridding of hard copy documents.  Streamlining business operations, while containing overhead costs, is the real secret to profitable growth.

 

Ironstone can assist you in estimating the costs associated with owning and operating your firm and will guide you through re-evaluating projections if appropriate.    We have templates available for your use.

We want to hear from you!  What steps are you taking to reduce your operating costs?  Share your ideas!

Follow us as we explore each of Ironstone’s Fundamental 4™!

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

You won’t want to miss our next in the series:  Business Development- Capabilities Presentation,  How Do You Share Your Firm’s Story?  Learn How!


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Begin With The End In Mind

Your succession plan should start when you make plans to open your firm.  If you want to create a purposeful life and path for your career, as you start your business think about what your exit game plan will be.  Regardless of being in the midst of success, if you do not have a succession plan, make it a priority this year. 

How should you start the process?  Think of yourself as replaceable and begin to delegate tasks to others.  Other key questions to answer in developing your succession plan:

  • At what time would you like to transition out?
  • Who will you sell to?
  • When will you make the transition?
  • How will all of these work together?
  • Are annual recurring revenues growing over time consistently or are they up and down and somewhat volatile?
 

Predictability is the preference in appealing a buyer to your firm.  Higher net cash flow and higher recurring revenue will give your firm a higher valuation. 

How long should an exit take?  Each firm is different, however, it can take months to years for the entire succession process.  When pursuing a sale the following steps can take 1 to 2 months per step and are critical in successful succession planning:

  • Preparation
  • Marketing
  • Negotiating
  • Due Diligence
  • Final Transaction
 

 Other considerations to include in your succession plan:

  • Prepare your team & your clients. Make sure your clients will receive the same level or better quality of service that they are currently receiving.
  • Train your clients so they are used to you being out of the office.
  • That the buyer can have a profitable practice.
  • That you will be compensated fairly for your practice.
  • Look for businesses that are compatible with your firm.
  • Is the business a fee-based or commission-based firm?
  • Is the firm financial-planning based or investment-management service based?
  • What is the firm’s client service philosophy?
 

As the owner of your firm, you are sure to be experiencing feelings of loss of control, loss of significance and grief.  Be aware that your team is experiencing an elevated pressure of anxiety if you leave them in the dark.  It is vital to communicate the tactics of your succession plan to your team.   

Purposeful planning is key to the entire succession planning process.  “One of the best things you can do is to work ON the business not just IN the business.”

 We want to hear from you!  Is your succession plan in place?

Contact us for assistance in following the proper steps needed for a successful succession plan.

 

Follow us as we explore each of Ironstone’s Fundamental 4™! 

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

You won’t want to miss our next in the series:  Business Development- Branding & Value Proposition-Does Your Firm Have A Value Proposition?  Learn How To Create A Unique Value Proposition For Your Firm.

 

 

 

 

 


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How To Increase Your Effectiveness

How To Increase Your Effectiveness

Ironstone believes that one of the best methods for operational effectiveness is to define your standard operating procedures for your practice and create multiple tracking and reporting systems that measure your results.  You should create reports and checklists by observing your current projects and processes, including the sequence of each.

For example, a powerful client engagement process consists of the design and creation of Financial Advisor service teams, client segmentation, service matrices and new/existing client workflow systems.  The fusion of these elements increases the efficiency of managing the workload while increasing the level of the client experience.

It’s imperative that each project and/or process that you are using in your firm has a Standard Operating Procedure (SOP).   The goal is to be efficient and effective.   The SOP should include:

  • The name and description of the current project/process
  • Define the sequence of events from the start to the completion of the project
  • Outline the implementation steps to complete the project
  • Create checklists or use supplemental information to aid in the management of the project
  • Determine the key metrics to be measured and how
  • Set a schedule of regular communication regarding team progress
  • Periodically review the processes to determine if any changes or updates are necessary

At Ironstone we find that the best way to start is to observe your current projects and process (or lack thereof) by taking detailed notes and surveys of day-to-day activity.   Make your list of what processes are in place or need to be in place and then create the standard operating procedures for each.

There are many areas within your personal and professional life where you can put this into practice.  Some of these include (but are not limited to) time management, methods for prioritizing, balancing life and work goals, staff meetings, marketing plans, client appreciation/retention, demographic analysis, and database management… just to name a few.

We know, it sounds like a lot of work, right?   You can’t have a full understanding of your business without tracking results along with measuring and analyzing internal processes.

Let us know how you create and manage your Standard Operating Procedures, your best practices, and what areas of assistance you need in developing effective operating procedures.

Contact us for assistance in starting and improving your internal reports and tracking systems.  You will also want to download our Reports & Tracking Checklist!   2.14.12Reports&Tracking

Follow us as we explore each of Ironstone’s Fundamental 4™!

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

You won’t want to miss our next in the series:  The Human Element-Leadership



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How To Define Your Business Model And Set The Objectives That Will Bring It To Life

How To Define Your Business Model And Set The Objectives That Will Bring It To Life

Follow us as we explore the first of Ironstone’s Fundamental 4™ – Strategic Planning:  The main objective in this fundamental is to create an uncomplicated plan that clearly defines the direction of the practice.  Primary focus areas include business and succession planning, creating organizational structure, and collaboration amongst the management team.  It is crucial for management to develop realistic goals and objectives creating the framework for team member focus.  Even more crucial is management’s ability to communicate these goals so that the common focus permeates throughout the team.  Plans and models that are stored on a computer are seldom implemented and likely to be forgotten.

What type of business model are you following?   Solo, Silo, or Ensemble?

Strong ownership mentality helps drive success and creates focus to leverage services offered.

  • A Solo Firm has a single professional advisor position, typically the firm owner.
  • A Silo Firm is a producer group in which multiple advisors collectively share overhead and expenses but remain independent and have separate client bases
  • An Ensemble Firm is a multiple advisor firm that operates as one firm, with advisors generally paid on a defined compensation model.

Are you following the right business model for your firm and what is the difference between a business model and a business plan?

  • A Business Model ascertains how your business makes money.   It will identify the services that your clients find valuable.  The business model will focus on the largest income generator for your firm.  
  • A Business Plan embodies your set of business goals and how they can be attained.

Overall, the business model explains the flow of money within the company and the business plan outlines the structure needed to obtain that flow of money.  A business plan supports the business model and explains the steps to achieve the goals of that model.  If you change the business model, you will also need to change the business plan.

There is not a one-size-fits-all solution for every firm.  Ironstone works with highly successful firms operating with different business models.  You can make your business model decision after considering your goals and objectives.

Contact us for help in preparing your Business Model.  Use this guide to help you get started on setting the goals and objectives that will serve as the foundation of your Business Model.

 

Follow us as we explore each of Ironstone’s Fundamental 4™!

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

You won’t want to miss our next post in the series:  Business Development – Niche Marketing

 

 

 


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Business Plan Feature Article

Ironstone Communications was recently featured in the Raymond James Practice Intelligence newsletter, on creating your business plan for success. Download the attached newsletter. http://ow.ly/d/9zb