Close Close

Practice Management > Building Your Business

Growing Pains

Your article was successfully shared with the contacts you provided.

There are several paths to building a bigger business. But they all boil down to these two things:1. More assets2. More time is spent with interested, qualified clients and prospects

You can capture more assets by adding bigger clients, adding more clients or capturing more assets from the clients you currently have. You can also delegate all the non-sales/non-advice functions so that you spend more time with interested, qualified clients and prospects. Let’s focus on that last one.

The Team ConceptIn all modesty, my company pioneered the team concept in financial services. In 1985, and again in 1991, I did the only (to my knowledge) time management studies in the industry. In the first study, I employed one of the first handheld computers and had it programmed to time and count things. In the second study, we developed the programming for a portable barcode reader and to keep track of time, a broker would just have to pass the reader over a barcode: incoming client service call, outgoing client service call, contact with prospect, contact with client, and so forth.

The first time I did the study in 1985, the results were so shocking I repeated the research. I had discovered that a financial advisor who had been in the industry a few years was worth about $1,000 per hour of talking to interested, qualified clients and prospects.

When I repeated the study, not only did I confirm this number, but I discovered a further, very interesting relationship. One of the people on my study was doing almost exactly $500,000 a year in revenue. He was averaging about two hours a day in client contact. Further study led me to the conclusion that time spent with interested, qualified clients and prospects was perhaps the most important variable in building a big business. It wasn’t selling skill. It was time management skill. Granted, if you don’t have a base of good selling skills, you don’t survive the few years necessary to get to the point where your time really is worth the $1,000 per hour.

I further confirmed this with in-depth interviews of million-dollar producers. What I found was that people got to be big producers by delegating non-sales functions very early in their career. They built a team even before they could afford it. To the best of my knowledge, this had not been identified.

What I did was create a system to handle all the non-sales functions. The key to that system was the plan for building a team. By 1986, I was convinced that to get to $1,000,000, you needed more than the part-time assistant being offered by the firms. As a matter of fact, you needed (and still need) about 2 1/2 people to get to $1,000,000.

In this article, I am not going to go over detailed information on the exact team structure I came up with (and wrote up in a previous series of Research articles). If you’d like to see more on what that million-dollar team looks like, I’ve posted a white paper at

Smashing the PlateauWith this as background, let’s talk about the first growing pain: the fabled “plateau.”

Someone comes into the industry and they either grow very rapidly, or they dissolve and disappear. But if you survive, sooner or later, you smash into a ceiling. That’s the plateau. It can come early or late, but it always comes. It can come before you get a team, or after you have one.

Whenever it comes, there is only one solution I know to be reliable: Get more help.

I can hear the conversation now:

YOU: What I will do then is work harder, ratchet myself up to the next level and then get the additional help. But I can’t afford it now.

ME: Sorry. It doesn’t work that way. The odds that you will now put in more time, perhaps at night or weekends, are somewhere between zero and nothing. To ratchet on up to the next level, you have to go into the marketplace and buy the time. If you run a hardware store and want to sell hammers, you would go buy some hammers. You are in a service business and the primary thing you sell is time. So you have to go buy some, and you have to buy it first.

Naturally, you have to hire the right person, pay them the correct amount, get them trained to do a job you can now do and then make sure they do it. As this person takes over the tasks you were doing, you are freed up to do more client appointments, seminars, prospect appointments and chase up some of those referrals that didn’t sell.

Moving to the Next LevelMaking a big move up to the next level is really just a variation of smashing through the plateau.

Let’s say you have built your business into the $1,000,000 range. You badly want to go to $2,000,000. How do you do it?

Here is the rule of thumb: To go from one production level to the next, you need to build the team for the next production level before you get there.

Let’s just say that at $1,000,000, you have a full-time service manager, a registered sales assistant and a part-time computer operator.

Here’s another of those fabled “rules of thumb:” If it takes about 2 1/2 people to get to $1,000,000, it takes another one or two to make it up to $2,000,000. You want to go to $3,000,000? Figure on anywhere from four to seven staff. There are a lot of variables here. How many clients, the type of business you do, number of transactions, even the geography you cover, all affect the number of staff you will need. Fewer, bigger clients in fee-based accounts do not require the team that 1,200 clients would need in a small town where there are few if any high-net-worth investors.

Let me give you an example of how I applied this data in a recent client conversation.

I was talking with a partnership doing about $3.5 million. They manage the client assets, but do not have discretionary accounts. This means that when they change a position, they might need to make 150 phone calls in a very short amount of time.

Since this happens frequently, a significant amount of their time is consumed changing positions.

The recommendation was not rocket science: Hire a younger and newer broker who is, at this time, not likely to succeed in the business, but desperately wants to stay in the industry. Introduce him or her by letter, and then have this person call all clients and personally make an introduction.

Now, when the next position changes, write out a little script, as follows:

This is Bob Hammer. I’m calling for your advisors, Jim and Sue. They’ve reviewed your account and recommend that the cash from the bond that will be maturing tomorrow be invested in some AA paper right here in Philadelphia. They are recommending the Philadelphia AA 30-year sewer bond with a coupon of 4.5 percent. It is, of course, triple tax-free. Are you OK if we go ahead with that transaction tomorrow?

If the client has questions: No problem. Sue is available now. Would you like me to connect you?

So, the secret to growing your business (if there is a “secret”) is to create a team that will enable you to delegate all non-sales, non-advice functions. Since you are worth at least $1,000 per hour even with an average clientele, you are at least a $2 million producer waiting to happen, and you could be worth a lot more. So get started, OK?

Bill Good is chairman of Bill Good Marketing Systems in Draper, Utah; see


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.