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February 01, 2008 at 02:00 AM
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 billgood.com/stuffdone.
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.
