Eventually, every agency owner will leave their business. Whether or not you want to, whether it’s through internal or external perpetuation, you are going to leave. Knowing that this is going to happen, why leave millions of dollars on the table when you do?
In today’s merger and acquisition environment, every $125,000 of additional operating profit you generate is worth approximately $1 million of value. That’s why now is the time for agency owners to stop doing business and start building their business.
In his original work, “The E Myth,” Michael Gerber popularized the phrase, “Are you working in your business or on your business?” But because that book is now over 25 years old, I fear that it has become a cliché. The idea behind the phrase may sound good and be good, but it appears too many agency owners just aren’t following the advice.
In order to adapt that principle to today’s world, perhaps the real key is to set aside time to build your business instead of just doing business.
As agency owners, most of us start our days with really good intentions. We get up and get going, we’re really focused on today, we’ve prioritized our “to-do” list and we truly believe that today is the day that we’re going to hit the long ball. So what happens when you arrive at the office?
By the time you get there, you’ve probably already been reading emails on your smartphone or your desktop is pinging relentlessly to notify you of a million incoming messages. (Note: Turn off the email alert so you’ll quit looking at it!) Then, of course, you have some snail mail to go through and piles of work cluttering your desk and desktop. You have all this stuff to contend with.
Not only have you become a CRAP magnet (as in, Can’t Resist Attracting Paper), you’ve become your agency’s SAKU (Source of All Knowledge in the Universe). People line up to see you because you can solve all of their problems as no one else in the universe can. It’s no surprise that you’re exhausted at the end of the day.
Ask yourself, “What did I get done today? I was busy all day, but what do I have to show for it?” Chances are, you’re confusing activity with results, which is something we’ve discussed a million times before. Just showing up and doing business while allowing others to dictate your day means you’re leaving millions of dollars on the table. If that’s the case, you need to redirect your focus.
Once you decide to shift your focus to building your business—growing it and not just working in it—you must devote the time to do so. (Remember, every $125,000 of additional operating profit brings $1 million of value.) Setting aside “building time” begins with a strategic planning session, which has become increasingly rare in our industry. In fact, fewer than 10% of all agencies have a tangible, documented strategic business plan for the year.
Strategic planning should answer three basic questions:
Perhaps the first question, “Where am I today?” should be “Where am I leaving millions of dollars on the table today?” It’s easy enough to figure out.
Borrowing a page from Jeff Foxworthy’s “You Might Be A Redneck If ...” playbook, I’ve compiled a partial list of the many ways agencies fail to maximize their revenues. I’m sure you can come up with additional fill-in-the-blank “ifs,” which indicate that you/ your agency is leaving major money on the table.
You might be leaving millions of dollars on the table if:
For most readers, several if not most items probably got their attention. If so, they’ll be the first to agree that they’re losing millions.
The remedy lies in identifying and utilizing the basic building blocks of growing your business.
So where do you start in order to make 2016 your best organic growth year ever? It starts at the top with you as the leader. Leaders lead!
So many agency owners began their careers selling insurance because it was something they loved to do, but then they ended up running a business. Years later, they aren’t necessarily building their business, even though they’re constantly working. Their hyper activity leaves them no time to be truly productive.
Leaders have two agency model choices. They either become a “transactional/ commodity-based agency” or a “relationship-based agency.” Assuming you’ve committed to (a) no longer losing millions and (b) building your business, how will you lead? Here are some things you should be doing:
At one of my earliest consulting jobs, I saw a sign that was prominently displayed over the coffee machine. It read, “The worst thing that can happen to an individual is to reach age 65 and realize they never reached their potential, and then realize it’s too late.” Well, I have a new sign that I’d like to see over the coffee machine at every agency: “Stop losing millions and start building—vs. Doing—your business!”
It’s your choice.
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