Please set up your API key!

The Rough Notes Company Inc.

IS YOUR TEAM READY TO GROW?

IS YOUR TEAM READY TO GROW?

IS YOUR TEAM READY TO GROW?
May 31
08:25 2017

Agency Financial Management

A developed plan and the right people are just a few of the key elements

Making the decision to grow your business is a big step that takes a great deal of thinking, a willingness to commit resources, and more than a little courage. It also takes the cooperation and involvement of your management team.Whether your agency is small or large, the people who help you run it have to be fully aware of and committed to your plans for growth, or else you probably won’t succeed.

Any kind of change creates some degree of uncertainty among the people who work for you. That’s why it’s important to communicate your plans and ensure that everyone is engaged, and it’s especially true for the people you count on to lead the rest of your staff.

Do you have a plan?

You can tell your team that your agency is going to grow this year, but you’d better be ready to answer their immediate question: how? The only way they’ll have confidence in the agency’s potential for growth—and be willing to support you through the role they’ll play—is if they know that you have a clear plan of action.

A very specific growth plan with milestones and metrics is important for you, because it will force you to think through all the aspects of your business and set measurable goals. You’ll want to define specific objectives for your growth plan, because vague statements such as “we’ll increase profits” don’t provide any clear guidance. On the other hand, statements such as “we’ll increase commission revenue by 15%” and “we’ll increase the average number of products per client from 1.8 to 2.5” give you clear targets and allow you to gauge your progress throughout the year.

Your growth plan should also spell out a strategy, tied to the budget that you’ve set aside to support the growth (such as additional advertising). It should explain in simple language what you’ll do, so that all of your team members will understand what’s expected of them. That means there’s less room for misunderstandings or missteps along the way.

Ideally, your management team should be involved in developing the plan to encourage buy-in.
They’ll bring insight and ideas that you may not have considered. They’ll also know whether your objectives are attainable, or if you’re only setting everyone up for disappointment.

Don’t lose the day-to-day

Climbing the growth curve can be exciting for your team, especially when they begin to see the results. But be careful not to lose sight of the business you already have. You don’t want to neglect existing business and offset growth by losing longtime customers.

In fact, going into growth mode is an excellent time to rethink the way you handle existing business. Encourage your management team to look for ways to improve practices and processes. Have them identify steps that will improve the efficiency of your operations. That will be particularly beneficial, because it will allow you to handle the new business you add without having to increase headcount or lengthen the workday.

Tap into resources

Growth also can call attention to shortcomings,
inefficiencies, and personnel needs within your agency. Addressing those issues may require investing in people, such as making bold changes to your management team, or investing in systems and processes. If your technology resources aren’t up to the task, perhaps it’s time to upgrade. If your knowledge of financial reporting and controls isn’t strong, you may want to ask your accountant to play a bigger role.

A move up the growth curve is a critical time for a company. Mistakes that might have previously been brushed aside may now have significant consequences. It’s not the time to cut corners or try to do things “on the cheap.” If you don’t already have access to sufficient capital, you may want to finance your growth plans through careful borrowing, perhaps by using a lender who offers financing based upon your growing commission stream.

The right people

When companies are in growth mode, they often scramble to fill open positions as fast as possible, reasoning that somebody—anybody—is better than nobody. That’s a dangerous idea.

Again, growth is a critical time for your agency’s well-being. And, as businesses grow, the challenges those businesses face grow, too, along with the consequences of poor decisions. You don’t want your management team to hire people who are better suited for what your agency used to be. You need people who can envision what it will become, and who will begin their first day in that mode. Take the time to find and hire top performers who will make your agency better. Nevertheless, while you’re focused on finding new people, don’t neglect those who are already working hard for you.

Your growth plan should address future staffing needs and include milestones that will help you know when to hire. That way, you can prepare for those needs and hire strategically, instead of out of desperation.

Leverage leadership

If you have the right management team in place, your role as a company leader can change significantly as you grow. With your team focused on handling the day-to-day business, you can step back and look at the bigger picture. You can concentrate on strategic opportunities, instead of solving problems; this will allow you to continue to grow your agency.

This only works, however, if you have the right people and have helped them grow as managers. Preparing your team for a leadership role may involve coaching them, encouraging them to pursue new licenses or professional development, or maybe even obtain a college degree. When you invest in your team’s skills, you strengthen their loyalty, and you make your agency more profitable.

Ultimately, your goal is for your management team to be able to run the agency without your involvement. That way, when you’re ready to call it a day or move on to another challenge, they’ll be ready to take over—and the agency’s value will allow you to enjoy a comfortable retirement.

The author

Rick Dennen is president and CEO of Oak Street Funding, which provides commission-based lending for insurance agents that need capital to buy, build or sell their agency. Dennen is a licensed agent in the state of Indiana for Life, Accident & Health products and a licensed Certified Public Accountant in the state of Indiana.
In addition, he holds an MBA in finance and is an instructor of venture capital and entrepreneurial finance at the Indiana University Kelley School of Business. He can be reached at rick.dennen@oakstreetfunding.com

Related Articles

rn-subscribe-sidebar-cta_magazine rn-subscribe-sidebar-cta_blog rnc-advantageplus-sidebar_login rnc-pro-sidebar_login

Spread The Word & Share This Page

Trending Tweets