Business Planning: Data, Analysis Before Action
  The word \”planning\” in business planning means that one should be conducting a specific process whereby the professional is doing the following:
   1. Data gathering
    2. Analysis and review
   3. Specific recommendations
   4. Action plan
  We\’ll discuss each of these steps in more detail, in later articles.
  In too many cases, steps three and four occur before anyone bothers with steps one and two. Steps one and two should always be completed so that steps three and four can be of objective value to the business owner in his or her decision-making process. The data gathering helps the planner to consider relevant issues during the analysis phase. We\’re looking for the analyst and not the saleperson in all four parts of this process. I\’ll bring in the salesperson soon so don\’t get discouraged.
  Once this analysis has been completed and the findings have been discussed with the business owner, you can progress toward the action plan. We have purposely left out any discussion of specific products since planning and selling are two vastly different disciplines. It is in my opinion that planners should position themselves to direct what the salespeople will be implementing. Having salespeople direct the implementation process usually increases costs and conflicts of interest. I know this is the most popular method used today, even if not the best. The planner should be compensated for his planning and analysis skills and not by sales commissions when possible. This process will give the owner the best of both worlds, a specific implementation schedule with companies and products that are lower in cost and higher in employee benefits. You still may be paying some commissions for imlementation, but you\’ll be able to now see the value of what a well-tranied product specialist can do to bring more value to your benefit plan.
  You should always get an estimate in writing of what commissions are being paid and to whom. Starting in 2009, any CFP who sells products to a planning client must notify the client, in writing, of sales costs and specific costs, if asked. Insurance regulations in California also allow for negotiated commissions by way of agreed commission rebates as long as they are not dicriminatory. I admit that most agents would not be raving fans of rebating, but it can be helpful during the analysis process if an employee benefit program is in jeopardy because of costs.
  As a business owner myself, I value and need advice from objective and independent sources. Having qualified and competent planners is the first step in the business planning process. Having someone who has a license to sell business products is not always indicative of a competent adviser. Using competent advisers who have a process for rendering objective business planning advice becomes a win for the employer, the employee and the adviser.
  For more information or to learn more about Hargrave & Associates, LLC please visit http://www.Hargrave-Lyons.com
Stanley Hargrave is an owner/partner at Hargrave & Associates,LLC, a wealth management firm located in Riverside,CA. He is a Certified Financial Planner (CFP) and an adjunct faculty member with the University of California, Riverside and Depaul University. He holds a masters degree in financial planning-wealth management and has over 30 years of experience in his field. The Hargrave & Associates, LLC website may be viewed at http//www.Hargrave-Lyons.com
