Are You A Sales Representative Or A Business Owner?

The answer to this question in the headline could very well hold the key to your future success in the financial services industry.

Do you see yourself as an employee who is directed and driven by your manager to achieve company goals, or as a self-starter who will marshal your resources to achieve your own goals?

Are you willing to take full responsibility for your own actions and commit yourself to success without blaming others for not giving you the training and support you feel you need?

In other words, are you finally ready to stand on your own two feet and say, “This is mine!”

One of the many strengths of this great country of ours is that it spawns and encourages entrepreneurship. Throughout history, men and women have seized that opportunity and pursued their dreams by building businesses that have served our country well.

We, in the financial services industry, are privileged to have that same opportunity. But some of us have either failed to recognize it or have shied away from it. Those in the latter category have at least made a choice. But it is to the former group that this question is directed.

First, you may ask why is this distinction important. It has often been said that your attitude will determine your altitude. This is very much the case in this instance.

The attitude of a business owner is far different from that of a sales representative.

Business owners take full responsibility for their actions. They then determine a course of action and accept the risks that are needed to accomplish their goals, whereas sales representatives look to the company to provide direction and resources, accept little responsibility for the outcome of their actions and try to avoid all risks.

How then, will this attitude influence a business owner’s behavior? We must consider the actions taken by business owners to illustrate this different perspective.

First, by accepting full responsibility for their own success, business owners feel free to develop a dream–a vision of the future or a goal that they know they are capable of accomplishing that provides them with a sense of self-fulfillment.

Each day, they will succeed in their progress towards their goal of solving client problems and reaping the rewards of both achievement and finances. It is that long-term vision that determines their everyday behavior and provides them with a sense of accomplishment.

Business owners will put together a plan that specifically identifies how they will go about implementing this vision. Here, they decide what markets to pursue and what products to provide.

Our industry has changed dramatically over the last 10 years, making this a vitally important decision that will influence how we allocate our resources. Although there are still essentially three basic markets (i.e. personal, estate, and business) the proliferation of products and the technology that supports them requires these business owners to consider if they can effectively address all three, or if they need to focus on a specialty area.

One thing is certain, they will realize, as we all should, that no one person could address all of these markets with all the different products available and do the job effectively. We all need help. This can come in the form of support staff or through joint venture arrangements.

Business owners will not only realize their strengths, but their limitations as well. They may choose to follow the principle of working to maximize their strengths and hiring out their weaknesses.

All too often, ineffective sales representatives will spend too much time trying to overcome their own personal limitations while neglecting the improvement of their strengths, thereby watering down their abilities to average achievers.

As business owners, they realize what their strengths are, and devote as much of their time and energy to them. Other areas are supplemented with talented people whose strengths complement those of the business owner.

The result is a tremendous synergy that enhances their mutual achievements. Both partnering and staffing can accomplish this result. In either case, there will be an apparent cost in the form of lost income or greater expense. But here again, we arrive at another attribute of business owners–the willingness to invest in their own business.

Most entrepreneurs have to raise some initial capital to start their businesses. We are usually spared that requirement and as a result, fail to appreciate the need to spend money to make money. Sales representatives assume that the company should pay for everything.

Business owners are willing to give up commissions to work with others who can teach them about new markets and products, they will pay people to perform those functions that keep them from focusing on their strengths.

For example, the new producer will often ask, when should they hire an assistant?

The answer–immediately! Even if it is only part-time. Taking that first step is often the hardest. The sooner it is done, the better. Now you have something to build upon and you will have already taught yourself your first business lesson.

The next issue business owners address–once they decide to spend some money for support staff–is to identify the income that would cover these costs. They would then develop a budget. By projecting their costs and expenses, they determine their income needs.

A recent survey conducted by the Million Dollar Round Table identified the expenses of their average producers to be approximately $100,000 in the year 2000. Income levels ranged from a medium point of $235,000 to an average of $280,000. For those levels of cash flow, it is vitally important to record, report, and monitor both expenditures and income.

But that is only half of the story. Business owners will also develop a marketing plan that provides the desired level of income. A plan that allows them to focus their energy in the right market with the right products and a staff that provides them with the freedom to pursue those goals.

In considering the appropriate products to provide, they would realize that not all products provide the same profit margins.

For example, life insurance is typically a low maintenance product (particularly in the personal market as opposed to the business market) while investment sales may be high maintenance. Investment clients often require much more interaction after the sale than life clients typically do.

Knowing the cost of this interaction would acquaint business owners with their margins in these lines of business and allow them to determine whether they merit the owner’s time and attention. They may then decide to enter into an arrangement for someone else to handle these clients for them.

Once the budget and marketing plans have been put together, the effective business owner would establish an external accountability. Although most business owners consider themselves to be self reliant, they too are human. They too are prone to drifting off course and need to be guided back.

Here is where either a business coach or a board of directors would be useful. They would share in an understanding of the business owner’s vision and would meet regularly to review his progress and when necessary, offer advice and counsel on critical decisions while encouraging him to stay on course.

In the absence of this type of accountability, too often business owners find themselves adrift in a sea of indecision, engulfed in a fog of confusion and wind up crashing on the shores of failure. A little poetic imagery to make the point that sometimes we need a lighthouse to find our way.

And so, the choice is yours–sales rep or business owner. Which will it be? There is merit to each choice. But the distinction must be made so that you can more clearly see the direction in which your career will go and avoid the frustration that comes when your behavior clashes with these two different perspectives.

But, no matter which you pursue–let 2002 be the best you can do.

Joseph T. Molony, CLU, ChFC, MSFS, is a financial representative of the Northwestern Mutual Financial Network, Lancaster, Pa. He may be reached via e-mail at joe.molony@nmfn.com


Reproduced from National Underwriter Life & Health/Financial Services Edition, January 7, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


Copyright 2002 by The National Underwriter Company. All rights reserved. Contact Webmaster