Creating a business plan is the first step to growing your practice.

During our tenures in the business, we have observed thousands of financial advisors, some highly successful and some not so successful. In most cases, the unsuccessful advisors were not following certain practices that the successful advisors were. We labeled information from those certain practices the keys to success.

We both believe strongly in the importance of learning from your mistakes, but wouldn't you agree that it is much easier and less costly if you can learn from other people's mistakes instead of your own?

The purpose of this article is to examine some of the keys to high-level production and then share with you some proven ideas on how to move your practice to the highest levels.

Key #1 Write a Business Plan

Perhaps the easiest mistake to make as a financial planner is to focus entirely on financial planning without applying planning to your own business. Sounds crazy? It's not! You are in the financial planning business, and you need to run it like any business-with a formal, written business plan.

Unfortunately, many financial professionals do not focus on how to run their business properly, and proceed without any clear goals or plans on how to achieve those goals. Many other advisors were taught by these same professionals and entered the business focused solely on calling all the people they knew to get themselves started. They also may have felt that they didn't have the capital to properly establish a business and ended up simply "shooting from the hip." Sadly enough, once they did have the capital, it may have seemed easier to continue on with the same approach.

If you, like so many others, have fallen into the trap of working day to day without any long-term vision or written game plan, take a step back right now and ask yourself this question: "If your company was listed on the New York Stock Exchange, would you recommend it to your clients as an investment?"

All quality companies have established formal business plans in order to achieve their long-term goals, and so should you if you are going to have a successful practice.

Survey after survey shows one of the major problems financial advisors have is that they are so busy running their business they forget to sit down, take a look at the big picture, and plan their business.

We did a survey of high-level planners and found that most of these advisors did not have a written business plan. They only had either:

a list of goals,

a marketing plan or

a vision.

In fact, here are samples of what some highly successful producers told us was the entire business plan of their branch.

"Our business plan is very simple-make money first."

"We don't have time to put together a written business plan-we're too busy doing business."

"We've been together so long that our business plan is we read each other's minds."

When we asked why they didn't have a formal business plan, many said they didn't need one. We then asked if there were any areas in which they need to improve, and they said absolutely. In fact, here is a list of the top areas they wanted to improve:

Communication

Follow-up systems

Operational efficiencies

Prospecting

Overall marketing strategy

Shift to fee-based from commission-based

Smooth coordinating of responsibilities

They said their main challenges were:

Time management

Overall profitability

Managing staff and office

Compliance

Keeping abreast of industry changes

Sitting down and taking time to write a business plan is no easy task, and we do not underestimate the time involved.

Most financial advisors tell their clients that people do not plan to fail, they just fail to plan.

As an advisor, you need to write down your business plan.

Why? The main reason is that writing it down holds you accountable. Perhaps you are nodding your head as you read this, thinking, "OK, that sounds great, but how do I write a business plan?"

Here are eight steps to developing a functional business plan:

STEP 1: Determine who you are and what you have to offer.

Consider what you have to offer and who you can best help. Develop a clear, concise statement that describes your practice. This is your mission statement. Give it power.

STEP 2: Write down your long and short-term goals.

These are your strategic goals-the core principles and strategies by which you will operate your practice.

STEP 3: Create a list of the steps you need to take to accomplish your goals.

These are going to be primarily tactical steps-the specific steps you decide are necessary to reach each of your goals.

STEP 4: Make a complete list of all the changes necessary to accomplish these goals.

You need to list the changes in your practice that would help you achieve your goals. This list should be as thorough as possible!

STEP 5: Set a timetable.

What can you do today to start implementing your changes and the steps that will help you realize your goals?

STEP 6: Put the logic or rationale behind your assumptions into writing.

Include an annual revenue goal analysis and an annual budget. Please keep in mind that you need to be realistic. Try not to be overly aggressive or conservative. It is very hard to run a profitable business with unrealistic expectations.

STEP 7: Develop a marketing plan.

A strong marketing plan is the nucleus of your business plan.

STEP 8: Keep your business plan in view.

Once the hard work is done and your business plan is complete, don't shove it in your desk drawer and forget about it. Your business plan will be most effective if you periodically review it on a scheduled basis and make any and all necessary changes and updates.

Finally, when you are working on your business plan and figuring out your goals, don't be afraid to be aggressive. You should plan to significantly increase your assets under management each year. Do you realize that if you can accomplish a goal of a growth rate of 20% per year, your income will double about every four years?

"A 20% increase per year?" you are asking yourself. "Is this possible?"

Absolutely. But you must be willing to invest the time to write out a formal or functional business plan!

Tom Gau is principal of Oregon Pacific Advisors in Ashland, Ore. Together with Ken Unger, he serves as co-president of MillionDollar Producer. They can be reached at www.mdproducer.com.