7 Strategic Milestones for First-Year Advisory Firms | Financial Advisors

Business growth for advisory firms takes both skill and intentional action. By creating well-defined goals and tracking your performance against them, you can grow your financial advisory business into a profitable one. Specific goals or outcomes you aim to achieve as a part of your business strategy are company milestones.

A well-planned list of company milestones can be a road map for your first year in business. This road map can then be updated annually to account for new milestones. These are short, measurable goals that you can check off the list as you pursue larger company goals.

Business milestones should include the following:

Here are two examples of milestones that fit this criteria:
Goal: Add five new clients in the first quarter of this year.
Who’s responsible: Firm owner.

Goal: Build relationships with three new COI (center of influence) partners and refer new business in the first quarter.
Who’s responsible: Firm owner.

As you consider which steps are most important in growing your financial advisory firm, consider the following seven milestones to hit in your first year of business:

Budgeting may seem difficult in in the first year because you don’t have any previous numbers for direction. You should estimate your income and expenses based on the typical expenses you can expect in your first year. Those items fall into categories such as compliance, marketing, and customer relationship management and accounting software.

Efficient management of your finances will help you keep track of your spending limits and monthly budget figures. After you’ve managed your budget for a few months or longer, you can adjust your budget or categories when you have more information.

Your overall plan to increase sales and achieve business objectives should be driven by your marketing strategy. Revenue generation will be critical to your success, and an increase in sales will then make sure you’re able to maximize your income from the start.

Creating a marketing plan with specific goals around a social media campaign aimed at your ideal client avatar, creating a newsletter to promote your products and services, or using social selling strategies through direct messages are considerations. These specific goals within your marketing plan can help you generate revenue as soon as possible.

Remember this: Your first sale is an important milestone to achieve. Sales is service, and it is important to make money. Closing your first client is an exciting confidence booster and lets you know that people are willing to pay for your services. It’s possible your leads will come through your marketing or business development efforts. Once you’ve figured out a solid sales strategy, apply that process to every prospective client you meet. Before you know it, you’ll have multiple clients under your management.

Advisory businesses should have a clear accounting and bookkeeping system in place from day one. Doing this early will save you a lot of work down the road. Accurate financial statements will be required compliance-wise in the event of an audit, and it’s just good business practice.

Don’t get caught off-guard or caught in an unpleasant situation, like not following up on your receivables and having your cash flow affected. Avoid the stress of catch-up bookkeeping by staying on top of your numbers early.

Since you’re a financial advisor, you may feel comfortable doing this yourself; if not, find a good bookkeeper to keep your numbers in order. Working with a certified public accountant can help you analyze your financial statements to assess the health of your practice.

Timeline: Three to four months.

Some startup advisory firms don’t have the financial resources to hire W-2 employees from the start. If this is you, consider hiring a 1099 contractor to handle outsourced tasks. Outsourcing can also save you money since you don’t have to spend on equipment, training or employee benefits.

Many outsourced professionals are business owners themselves, so there’s the flexibility of working with skilled professionals in a variety of areas including copywriting, administrative tasks, marketing and web development or design. Outsourcing will also free up your time to spend on more revenue-generating activities, such as business development or sales calls.

Timeline: Six to 12 months.

One important metric of business growth and success is revenue. In order to become profitable and cash-rich, you must consistently generate a level of revenue that exceeds your monthly expenses. In the beginning, your sales numbers will be small, so increasing your sales by a specific number that you choose is a key goal for later in the first year. Your activated marketing plan and strategy should cover tactics to help you achieve this goal. At the end of the period, evaluate how you performed against your goals. If you didn’t hit your targets, make adjustments to your marketing strategy and/or sales strategy.

Timeline: Nine to 12 months.
Becoming known as top-notch financial advisory practice is a great way to establish your brand and increase revenue. With a solid marketing plan and strategy, executed consistently, you can grow your brand in the first year. Defining your company’s voice and telling everyone who will listen can help establish a strong presence.

Always focus on content that solves your target audience’s problem as you post to social media. Posting consistently so communities can see your information is critical to brand awareness and influence.

After you’ve worked with a few clients, ask if they’d be willing to provide you with a testimonial. Check with your compliance department to make sure all your t’s are crossed and i’s dotted in this regard.

At the end of year, take steps to analyze your performance and use the data to determine company milestones for the next year. Use the information to see your successes and take action to correct any missteps. If you’re wondering how to use your data to see how you performed, track your performance against your budget; look at expenses, income and profits against your monthly targets; review cash flow; and review customer feedback and testimonials for improvements.

These best practices will keep your company milestones top of mind and trackable, giving you the ability to make any strategic pivots sooner rather than later.