What will your fee income be in five years time based on current assumptions?
Take out a pen and paper and map it out on an xy chart. You can go into a little or a lot of detail here but the key is to be realistic i.e. if sales in your firm have been flat for the last four years they will probably stay flat without some good reason. Try to avoid undue optimism or pessimism.
What do you want?
Now look at what you want fee income to be in five years time. This time reality should be ignored entirely. It’s just what you want. This might be driven by a corporate goal, the fact that you’ve always wanted a yacht or simply that you need to make that much to provide for your pension.
Mind the gap
Is there a gap between what your fee income is going to be in five years time and what you want it to be? If so you need to identify some strategies outside of current thinking that are going to close the gap. By definition they must be outside of current thinking because current thinking was factored into your five year projections.
A man called John Argenti created this planning model over twenty years ago. In my time in the UK I witnessed this simple approach take a business from £30m to £100m turnover and from 0% to 10% trading profit in six years.
Argenti said that the firm needs to identify three and a maximum of five strategies that would close the gap over five years. Each strategy would have a number put against it and a leader reporting to the managing partner would be made responsible for delivering the number to the business.
He called the strategies Elephants because they were big, slow moving and they would lead you out of the jungle. As we approach 2017 maybe it’s time to go hunting.