Avoiding the potholes

It’s summer break now, and I have an 8 year old. This means summer camps and evening bike rides, and s'mores. It also means our standard daily routine is thrown to the wind! I love summer, but I also love the efficiency of the standard morning routine. I make the lunches, my husband feeds the dog, and our daughter complains about breakfast. Normal, right?!

Everyone knows what’s supposed to happen. Everyone knows how long each thing takes, and everyone performs their part of the routine. For the most part, we leave the house on time, and my daughter remembers her homework.

The Key To Strategic Advising

Processes work the same way in your business. In fact, they do even more. They establish standardized tasks, which allow for easy training and the ability to assign work to the right people in the organization. This frees everyone from the burden of having to wonder what to do. Employees know where they fit within the whole, and the right work gets done each time.

But can processes work for something like Strategic Advising? It seems like such a unique type of work. Its tasks must be custom and distinct each time, right?

No! Not at all. In fact, implementing a process to manage the work of Strategic Advising is the key to making it happen in a profitable, seamless way. That’s because you become efficient about doing the work, everyone knows their piece, and your customers know what to expect. A familiar theme is emerging.

When you think about doing Strategic Advising with your clients what’s the first thing that comes to mind? Are you excited? Worried? Confused? Or maybe frustrated because it’s something you want to do, but don’t know where to begin - you’re either living under a mountain of other work, or you haven’t introduced the subject to your clients.

If you’re like most people in the industry it’s probably a combination of all of those. You know you have some hurdles to overcome: migrating to fixed fee billing and implementation of these services into your practice are probably at the top of the list. Standardized processes address both of these problems. Let’s take them in turn. They are your two potholes on the road to Strategic Advising.

The Potholes

Implementation becomes easy and straightforward when you have a process. The work procedures become tasks and those tasks get assigned to people. The people are trained on the procedures and the tasks become a checklist of work to complete. Simple and obvious. Pothole #1 avoided.

Fixed fee billing is also addressed by process, but might not be as obvious. Pricing is always hard, and determining new fixed fee pricing for services you are just starting to offer can seem daunting. But there is a way to figure out your fixed fee:

  1. Establish a basis on which to set your price: an upper and lower limit.
  2. The lower limit is what it costs you to do the work. After all, you can’t afford to lose money on a service. In order to arrive at an internal cost, you must know the work being performed. If you have established a set of tasks, you can assign time to those tasks, as well as a labor rate. The sum of those would be your internal cost for doing that set of work: your lower limit.
  3. The upper limit is always what the market will bear. Every market is different, so this must be determined by you. How much could you possibly charge at the very high end, and still feel good about charging your customer? You will have a good sense of this upper limit as you work through numbers.
  4. The last step is to make adjustments to your pricing if your lower limit is too close to your upper limit. If your cost is approaching the most you could ever charge your clients based on what they will actually pay (what the market bears) then you have to optimize your process, and figure out how to be more efficient delivering the service. You need to go back to the process and see where you can find efficiencies. Maybe there are more tasks in the process that you can train employees that have a lower hourly wage. You want to make sure that your pricing is delivering good value to your client, but also profitable for you and your firm.
  5. With your internal cost determined you can also establish your margin for doing the work. Margin can and should be something you aim for and track.

So we’ve established that processes are the key to the two biggest hurdles in migrating to Strategic Advising: implementation and price.


The Process

But how do you establish your process for Strategic Advising? The first step is to determine your outcome. What do you want to deliver, and what should your customers expect each time? Those things become your work product. Or better put, your scope and deliverables. Once you have these determined, you can establish a process for developing each one, and a set of tasks to accompany each process. You should also determine at this point what tool set you need to help you get the work done.

In addition to cultivating order, these deliverables are the things you will talk to your customers about. As much as you will use your knowledge and expertise to do advising, you cannot sell knowledge and expertise. That is much too nebulous to your customers. There must be an agreed scope, and something for the customer to expect on a regular basis: a deliverable.


The Method

At LivePlan, we have developed a process for Strategic Advising that we call the LivePlan Method. Its structure is the following:

  1. Plan - establish the business model and know the value proposition
  2. Model - turn that plan into financial forecasting data
  3. Build - build the financial forecast
  4. Analyze - compare the forecast to actual data for given periods of time, looking for trends and anomalies
  5. Report - report on this progress for your customer
  6. Meet and Adjust - meet with the customer, give advice, and adjust the roadmap

Within each of those high level categories there is specific work that is done. Very specific, down to the task level. We invite you to learn about this method through our series of training Webinars, as well as at this Blog where I will cover each piece in turn on a monthly basis.

Remember, you are in the driver’s seat with regard to the 2 most important resources for strategic advising: your client’s data and their trust. Implement the process and you are on your way to a profitable and very necessary service offering.