Do You Know How Much will you Earn next month or in the next Year?

Do you know how will your business look like in the future? How much are you going to earn in the near term and few years down the line?

The idea behind assessing your future income is, it gives you a perspective of your future, how much are going to earn in the future and and how much more do you need to make, to live a comfortable life until your last breath.

For a salaried individual, calculating the expected future income is pretty easy, one can simply extrapolate his/her current salary by an average annual growth rate, taking into account a bonus raise during promotions and job switch. But for a businessman estimating the future income is tricky. Your income will not grow in a straight line over the years. This inconsistency in income is because you don't get a fixed profit every month, your income pattern largely depends on your capability and the efforts you put into your business.

For a financial advisor, estimating the future AUM is a hard equation to solve, since the AUM is market linked, but future sales are largely predictable. You can aim and plan for new clients, retain existing clients, new SIPs, etc. Your future growth is pretty much in your own hands, what you earn depends on how much do you want to earn.

Having said that, to forecast your future income, the first and the most important thing to do is to have a clear vision. Meaning, visualize that how do you want your business to look like in the next five years, ten years and ahead. And pen your vision down, in terms of the AUM or the number of clients, etc., that you want to achieve, over the years.

Once you have visualized how big you want to become, the next thing to do is break down your vision into goals.

Macro Level Planning: Break your vision into broad long term goals. Set your long term targets like the total sales and the Equity sales you want to achieve, the number of E-Wealth accounts, the number of clients you want to acquire, the number of SIP's, MARS sales, PMS sales, etc., you want to do, in the next 5 years, 10 years, 2 years, or 1 year.

Micro Level Planning: Once you are through with the broad goal setting, the next step is micro level planning. As the name suggests, this is the stage where you are going to dissect your macro goals into parts. Meaning the step by step process about how are you going to achieve your macro goals. So, if it is about SIP sales, how are you going to achieve that target of Rs 20 Lakh of new SIP book in the next 2 years. So, the micro target could be getting 8 new SIPs of Rs 10,000 each month, you can do this by identifying the people from your existing client base who need and can do new SIPs, or targeting new investors. Your micro level goals will serve as the detailed plan of action you must follow to achieve your macro goals and your vision.

Review: Lastly, and most importantly, the above exercise becomes futile if you do not monitor the progress of your goals. You must always be in touch with your macro and micro goals, be aware of your progress compared to the targets set, analyze the factors behind the disparity, if any, and take steps to be in alignment.

NJ's Partner Planning Utility is a tool available on your Partner Desk, which can aid you in the entire Goal setting and Review process. You can enter your macro and micro goals, there is provision for assigning micro goals client wise also, and you can easily monitor your progress both in percentage as well as in absolute terms. The tool can prove to be useful in your goal management and overall business development.

Apart from goal management, there is a lot more that you can do to grow and actualize your vision, like working on client satisfaction, improving service standards, constantly upgrading your knowledge, ensuring minimum client attrition, keeping an eye on opportunities and not letting them go, employee satisfaction etc., thereby ensuring your business' and personal growth.

So, if you want to know how much you are going to earn in the future, define that number, and work towards it!

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