Balancing Strategic Advising and Business Plan Writing
Posted Kathy Gregory
I am often asked during LivePlan training sessions: “When should I do a full business plan for my client, and how do I charge for it?” It’s a great question because it gets to the heart of advisory services.
Advisory services, done right, do not involve writing a traditional business plan. Advisory is about helping your client, on a monthly basis, track the performance of their business, and determine where and how to apply adjustments necessary to meet their goals.
The answer to the question is that you can do both regular advisory work and a traditional business plan, but you have to set yourself up correctly to support and price for both. Let’s explore how that should look.
Your advisory services
Strategic Advising is the fastest growing area in accounting today. With the boom of cloud accounting and the commoditization of compliance work, small business needs for accounting services are changing. 
Small businesses themselves are changing too; the continually growing gig economy is a perfect example. Small business owners are ever more focused on their specific trade, outsourcing as many support services as possible, and demanding more and varied help from their accountants. The market is telling them to wake up and expect more.
You have many choices for offering advisory work. There is no “normal” in the industry yet. But one thing is certain: You must set yourself up to be profitable in this new enterprise, and for this, you must ensure you are doing just enough work that your client is getting the feedback and advice they need for their business, but not so much work that your margin is being devoured. This takes careful planning on your part: an analysis of your business processes, and standardization of your work product and client deliverables.
The LivePlan Method was developed to specifically solve this problem. Its structured scope ensures that you are doing the right amount of work to both meet client needs and stay profitable. It is your complete solution for offering standardized advisory services, profitably. The LivePlan Method involves a process of Lean Planning to build a lean, living plan, which you use for your monthly advisory work.
What is Lean Planning for your client?
Lean Planning is the practice of gathering enough information from the client to build a business model that will lead to a financial forecast and roadmap—a living plan for managing the business.
Lean Planning incorporates all the typical components of a standard business plan: the problem worth solving in the industry, the unique business solution, the sales channels, competition and marketing activities, and the partners and resources the business needs in order to be successful.
But by design, a Lean Plan is shorter and less formal than a traditional business plan. It is comprised of lists, and simple, powerful statements. It’s meant to be reviewed and edited on a regular basis—a live document that Strategic Advisors can use to help the client build a strategic financial forecast, which guides daily business management. We call this compendium a living plan because it is tracked and adjusted as the business evolves.
So, how does this strategic financial roadmap, this living plan, differ from a traditional business plan? As a Strategic Advisor, when should you do the latter?
The Lean Plan versus the traditional business plan
The idea of Strategic Advising is to establish your clients on a systematized cycle of regular advising. This solves two problems: It allows you to stay up to date with your client on their progress much better than only meeting quarterly or half-yearly, and it also allows for straightforward monthly flat fee billing (or value based billing). As described earlier, an advisor would use the principles of Lean Planning for their regular advisory services.
The full business plan should come into play as an extra service. If your small business client needs a loan, line of credit, or other type of investment, they will need a more traditional business plan.
The sections of a traditional business plan are the following:
- Executive summary
- Market opportunity
- Execution plan
- Company overview
- Financial plan
- Appendices as needed
You should establish your fees for a full business plan as a separate deliverable. If you are doing your standardized advising work correctly (meaning reviewing the financial forecast and the month-end actuals regularly), a traditional business plan, while a much deeper document, should be fairly straightforward—especially using LivePlan.
Streamlining your work
When using LivePlan for the full traditional business plan, you move from the Pitch section where you do your Lean Planning for Strategic Advising, to the Plan tab, where you can compose the traditional business plan sections. You would then adjust the management financial plan to more of a pro forma style financial plan. This version should take into account broader sales opportunities, with a percentage win potential, and also utilize industry benchmarks for budgeting expenses.
In this way, you’re establishing the best case, least risk version of the business—the one the bank wants to see for lending qualifications. Using LivePlan, you simply create a scenario within the Forecast module, which takes much less time than starting from scratch.
Because LivePlan keeps all the business planning information together for each company, these various versions of the business plan become integrated and much less burdensome than if you were using discrete toolsets for each item.
Beyond the business plan
There are other types of work you can (and should) set up as individual engagements within your advisory practice.
Some examples are:
- A full market analysis
- A business health check like a SWOT analysis, competitive matrix, and buyer persona exercise
- A full valuation of the business
Setting your work up in this way allows for maximum advisory services on a monthly basis, within a scope of work that is profitable for your firm. Not only that, it gives your clients an opportunity to engage you in extra work when it makes sense for their business.
