Like most advisory firm owners, you likely want to increase at least one of three numbers inyour firm: valuation, revenue or profits.You may even have more than one thatyou are trying to improve now, and ifyou are doing well, you are improving allthree at the same time.
The problem is that you can’t just setgoals on growing revenue, profits andvaluation. After all, how much controldo you really have over your company’sperformance? You can’t make profitsrise merely by thinking more aboutthem. You cannot set a goal that says,“We are going to increase revenue” andthen have it happen simply by talkingabout it. Action must be taken.
Instead, you have to focus on the drivers behind revenue, profits and valuation. It’s no different than in financialplanning; you can’t change a client’sperformance by focusing on it alone. It isthe financial planning that enhances thewhole picture. With your firm, strategicbusiness planning and implementationdrive the performance upward.
So the big question is, what do youfocus your strategic planning on to movethe performance of your firm? The simple answer is something other than revenue, profits and valuation. The goal isto know the four key drivers of growthto increase all three.
FIRST STEP TO GROWTH
Increasing revenue, profits and valuation
(I know you do not want to hear this)
begins with leadership training. Most
often, when there is a revenue or profit
problem in a firm (that leads to a valua-
tion problem), leadership is to blame. The
problem is usually that an owner feels they
do not have enough time to focus on the
drivers powering their potential growth.
How do you find the time to focus on
your business without sacrificing client
relationships? There is no magical for-
mula to time, but it can be as simple as
reallocating one extra hour a day, or as
complex as hiring. Nevertheless, it starts
with the simple decision to do some-
thing about it. This is the first decision
you must make before you delve deeper
into enhancing your growth.
At the core, you must decide to make
time for growth, strategic planning and
implementation. Once that decision is
made, the work can begin.
Over the years, I have found that indecision comes down to two behaviors: ( 1)owners spending too much time comparing their firms to others, and ( 2) ownerscontinually making excuses. This wastestime. You must make time for what isimportant, regardless of what everyoneelse is doing. As I say to advisory firmclients I work with: “Make the decision.Without the decision, you will never learn.”
4 KEY DRIVERS OF GROWTH
Our firm focuses on the four key driversin a particular order — from easiest tohardest. Unfortunately, most advisoryfirms start backward and make theirwork much more difficult than it needsto be, again wasting time.
The four key drivers in order are:• Increasing the referral rate.
• Increasing advisor capacity.
• Increasing close rates.
• Increasing lead flow.
What Are the 4 Key Drivers of Advisory
Most owners think in terms of improving valuation, revenue and profits.
But underlying actions must be taken first.
You have to focus onthe drivers behindrevenue, profits andvaluation. It’s nodifferent than infinancial planning;you can’t change aclient’s performanceby focusing onit alone. It is thefinancial planningthat enhances thewhole picture.
THE FAST TRACK
By Angie Herbers