As the end of the year approaches, it may be a good time to take a fresh look at your business and your goals for the coming year. When you know your business well, you should be able to create a better budget and improve operational efficiency. That will be the subject of this post.
Tracking Your Vitals
Every business has an array of vital statistics. You might consider using an Excel spreadsheet to log the data and analyze it on a regular basis. While this not intended to be an all-inclusive list, here are a few items to consider:
1) Assets Under Management
2) Income
3) Expenses
4) Fee Analysis
5) Goals and Initiatives
Let us discuss each of these.
Assets Under Management
How have your total assets changed from the previous month as well as on a year-over-year basis? Client deposits and withdrawals, and market fluctuations, will affect this. It is a good idea to keep track of the broad allocation of every account (stocks, bonds, cash, alternative and other) an, to do the same on an advisor or firm level. The latter is useful to know how much fluctuation you might expect from market conditions. This is also an area of focus for client accounts.
Income
Projecting your income will be easier when you know the broad allocation of the firm, assuming you are fee-only. It is also good to monitor your income month-over-month and year-over-year so you can understand how it is trending.
Expenses
