After 10 years in the business, Mike Ceeps had built up a varied clientele. The business flow was steady, but he was run ragged. He figured moving into the business market would allow him to generate more revenue with fewer clients. Recently, he had managed to book a number of appointments with business-owner prospects, but a number of them had cancelled on him, and those who had agreed to see him gave him little time.
Mike had recently had a meeting with Carl Veagle, the owner of a machine parts company. After cancelling three times, Carl at last kept an appointment, but during the meeting, he excused himself several times to take calls. Mike barely had a chance to talk to Carl. In the end, Carl apologized and suggested Mike call him in six months.
Mike hoped that he would be able to do business with Carl in six months. What he didn't realize was that his whole approach to the small-business market was flawed. What was missing was a solid business plan.
Immersing yourself in the prospect's world
Nine out of 10 advisors don't have written business plans. However, the 10 percent who do have a much easier time dealing with business owners. When you develop and work on a plan, you rely on well-thought-out strategies rather than wishful thinking. Also, the experience of running your own complex business will help you relate to and add value to business-owner clients.
A component of your business plan is your marketing plan, which outlines your strategy for establishing your prestige with prospects before you get face-to-face with them. For example, let's say you've chosen machine parts businesses within your geographic market area. To develop prestige in this market, your plan might be to join an industry association, write for their trade journals, attend their conferences, and conduct a direct mail campaign developed specifically for that audience. Your immersion in this market will do more than just develop your prestige -- it will give you valuable insight into the specific problems facing people in the machine parts business. As they get to know you, you get to know them.
Your marketing plan needs to jibe with the other aspects of your plan, such as your financials and your resource plan. You'll need to budget for your promotional activities and address the resources you will use to execute each activity. Are you going to hire someone? Part time? Full time? What are you going to pay them? How? By the hour? On commission? You'll also need to understand how your marketing strategies support your business objectives. Are these marketing initiatives creating the type of company you envision five years down the road? In fact, when doing business planning you begin with vision and work your way down through objectives, strategies, marketing, sales, resources, etc.
It may sound like a daunting task, but if you follow a template, you should be able to develop a draft of a business plan within a matter of hours. But to ensure its effectiveness, you should review and rework it on a regular basis. Don't look at planning as drudgery. Planning is the exciting part of being in business. When you're planning, you are working on your business rather than in it. Working in the business ensures the continued flow of revenue, but it's not a growth strategy. Real growth comes from the effort of working on the business -- business planning. Planning is your opportunity to capitalize on all your years of experience, to look at the trends in the industry, to figure out where things are heading and what new markets are opening up.
A foot in the door
If Mike had implemented a business plan, Carl wouldn't have seen Mike as just another salesman. Instead, Carl would have seen Mike as a professional who knows his issues and can help him, because he likely would have come across Mike at a conference or through an association. He might have even heard him on the radio.
But what if Carl still said the timing was not right and that he still wanted to wait six months?
That's where Mike's knowledge of Carl's industry and his experience in running his own business comes into play. Mike is now confident enough to ask Carl what will be different in six months. That question is Mike's way of opening Carl up to talking about his business and his plan. And it's where Mike can add value. With Mike's knowledge of the industry and his own experience in running a business, he should be able to help Carl explore the possibilities.
No, Mike is not a business consultant. But to see Mike as a trusted advisor, Carl needs to know that Mike has a deep understanding of the challenges Carl faces. When Mike demonstrates his knowledge of Carl's business, he shows him that he is able to develop solutions suited to Carl's specific needs.
Mike Ceeps' success
To begin his successful transition into the business market, Mike completed a business plan that outlined his vision to become an advisory firm specializing in serving the financial needs of small-business owners. His plan sketched out the various markets he would move into over the next three years and included the various promotional strategies meant to reach one of his initial markets -- machine parts companies.
Eight months later, after joining the machine parts association, sponsoring a trade show, writing for a trade journal, and sending a newsletter to the association's membership, Mike had established himself in the machine parts market. When he met with Carl again, he was able to talk intelligently about the issues in Carl's business, about the technological innovations that would impact the industry, about a foreign competitor moving into the area, and about new market opportunities. Mike was able to frame the discussion of Carl's personal financial security within the world of Carl's business. Carl became a client and a powerful center of influence who introduced Mike to many of his industry colleagues.
The information in this article was based on one of The Covenant Group's clients, Mike Ceeps. All of the names and telling details have been changed to preserve client privacy. Ray Adamson is vice president of The Covenant Group, a company specializing in practice development for advisors. For more information, call 416-204-0325 or email ray@covenantgroup.com.
