Issue 2 ::

IN THIS ISSUE

• Who's Advising Who?
• Women, Money & Power Study Reveals Surprising Trends
• Shedding Some Light on Business Value: Part 2
• Spotlight Survey

Shedding Some Light

on Business Value (Part 2):

Little investment other than time needed to protect
your business assets

In the last edition of e-Luminator™, methods to maximize the value of your business assets were presented as the first step in extracting the most profit possible from your practice when the time comes. FSC refers to this process as building business value.

Click here to read the previous edition of e-Luminator™

And whether you’re in the second year of business ownership or your 32nd, a specific plan to protect the assets you’ve already accumulated should complement your business building strategy. Many of the steps involved with protecting your business value require little or no investment on your part, with the exception of taking some time to set a plan in motion. That said, not having a protection plan prepared for your practice can result in catastrophic consequences should an unexpected life event occur.   

Large Scale Disasters

We all see and hear through the media on a daily basis natural disasters such as tornadoes, floods, fires and hurricanes that can adversely impact your business regardless of where you live. In 2005, 200,000 businesses lost power for an average of 10 days in the aftermath of Hurricane Katrina. Other potential nemeses to your practice include computer viruses, rolling blackouts, electrical power failure, cyber crimes, acts of terrorism, theft and lawsuits.

^ back to top

Personal Events

However, there are many other types of life events, which while less dramatic, are more common and can trigger equally devastating business interruptions. Such occurrences include an unexpected illness, resignation, or even a maternity leave can have a significant impact on your business operation if you are not prepared. The question you have to ask yourself is,

“Am I willing to risk my collective career efforts and assets because I don’t think any of these life events will happen to me?”

^ back to top

Document A Continuity Plan

Having a documented business continuity plan in place can help you rebound from an unexpected business interruption more quickly. An effective business continuity plan will:

• List a series of contingencies that enable your business to quickly return to operation following an unexpected event


• Reassure your clients with “proof” that your practice is prepared to remain operational to serve them under any circumstance


• Detail clear emergency procedures to ensure that the well-being of you, your clients and your employees is a top priority

 

^ back to top

An Eight-Step Action Plan

The following steps will help you gather the necessary information to create and execute a plan for your office.

1. Assess your risk. Determine which disasters are most likely to affect your business. Knowing what may occur will help assess your needs and develop a better plan.


2. Identify the critical business functions that are applicable to your business. For example:
   
   
• Data back-up and recovery
• Critical systems
• Financial and operational requirements
• Alternative communication between you and your clients
• Alternative communication between you and your staff
• An alternate means for clients to access their accounts
• Books and records requirements


3. Plan for an alternate office location. If an event occurs that impacts your business location, you need to be prepared to relocate. Can you operate from your home? Is there another financial advisor or business professional with which you could share space?


4. Appoint a person in your office to be the crisis manager. This person will be responsible for leading the office should a disaster strike, as well as keeping your plan updated throughout the year.


5. Back up your data. Maintaining both hard and electronic copies of important documents and files will make it easier for you to be operational quickly. Make sure data is off site and in a safe, secure location.


6. Create an emergency phone tree. This will help you contact employees, clients and vendors. The phone tree should be reviewed and updated frequently and saved in multiple locations. In the event that phone lines are not operational, you should also consider an alternative means of communicating with your team such as hand-held radios or other battery-operated devices. With large-scale disasters, both land lines and cell phone towers can be damaged and out of operation simultaneously.


7. Evaluate your emergency insurance coverage. Will your insurance cover your office in the event of all types of business interruptions? Consider purchasing business interruption insurance, which may compensate you for lost income.


8. Test your plan. No plan is effective if it is not tested. Regular testing will uncover weaknesses that can be addressed immediately. Then update your plan accordingly

You’ve undoubtedly had numerous discussions with your clients about their future plans, but what have you shared with them about your own security? Sharing your business continuity plan with your clients will enhance their trust and confidence in you as their financial advisor.

This information is a portion of a custom offering FSC provides for our advisors called the Business Value Program. This curriculum has been developed in partnership with industry expert David Goad of Succession Planning Consultants.

In the next issue of e-Luminator, the final step in making the most of your career efforts, achieved by extracting the maximum value from your practice, will be discussed.

^ back to top