6 best practices for running your firm

In the past, the small business owner could get by without being an active CEO. But those days are long gone! Today, you must wear many hats (or hire others to wear them) — including HR manager, marketer and CFO — to keep your firm healthy and growing. So where do you start? Here are six best practices to help prioritize your mental checklist. 1. Written business plan. A documented plan helps you step back and assess your business. Keep in mind that your plan doesn't have to be fancy. It can be just a couple of pages but should include the following: • Company vision. • Values. • Strategic directive citing significant factors that will affect the business over the next three to five years. • Three to seven SMART (specific, measurable, achievable, relevant and time-based) goals for the next year. • An estimated budget for accomplishing goals. Putting the document in writing is the first step. But it should be monitored and measured throughout the year. 2. Healthy human resources. Review your written job descriptions annually. They serve as the basis for performance reviews, another annual must for each employee and adviser. These two documents can go far in promoting healthy human resources practices. Plus, they are the foundation for alignment of a firm's compensation system to industry standards. You'll also want to think about professional development opportunities, and the importance of firm culture cannot be overestimated. Stepping back to assess if your culture is helping or harming the business is an ongoing responsibility of any business owner. 3. Operations efficiency. Technology is key for promoting efficiency. But are you doing all you can to leverage technology's advantages? Ensuring that you have up-to-date and fully integrated technology, such as a CRM and investment performance management, is critical. Further, your team needs written procedures that are consistently followed. The greatest technology won't help a lousy time manager. The good news is that anyone can learn to manage their time. It takes some commitment, but it's not rocket science. Sometimes, a daily to-do list and a longer-term calendar are the only tools you need. 4. Revenue growth. The trend line for the growth of your business provides a snapshot of where you are in the life cycle: growth, maturity or decline. To review the vitality of your business, look at the market-adjusted upward revenue trend. Although most advisers use assets under management as a key indicator of health, the number of new ideal clients taken on in a year also has value. The revenue analysis, combined with an expense analysis, leaves you with margin. If it's not important to you, it should be. 5. Marketing. Many advisers say they don't do marketing. But do you have a name for your company, a sign or a website? You're "doing" marketing if you present yourself and your firm to the public. Some firms have a robust schedule of events to attract prospects. Use every medium (website, social media, in-person interactions) to tell your story to attract the clients you want. Upfront strategic efforts can save time and money over the long term. Remember, being proficient at proactively asking for referrals from clients, centers of influence and strategic alliances remains the cheapest and most effective way to get new clients. 6. Risk management. It's surprising that "planners" resist planning — especially that related to their personal demise. Young advisers tend to put a continuity plan in place from the get-go. But many advisers in our graying industry would rather abdicate responsibility to the spouse after a sudden death, which means the practice might falter while succession is sorted out. In addition, having adequate business insurance (slip and fall, key man and cyber liability) is key. As a preventive measure, you should also pay attention to the proper titling of your business.

Keep best practices top of mind

My list is just a brief overview of some best practices to keep on your annual checklist. If you haven't done so already, be sure you start with a written business plan. From there, tailor your next steps to specific goals and start monitoring what works and what doesn't. But for business owners who must wear many hats, it's time to get started — or to take your best practices to the next level. (More: Raising the bar on happiness at work) Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.