Agency Financial Management
By Rick Dennen
DRIVING MOMENTUM: SEIZING OPPORTUNITIES FOR GROWTH
Combat job burnout and strategically develop a business plan
When things are going well, it can be easy to take your foot off the gas and coast. With no specific goals for growth and no specific plan to achieve it, you can find yourself relying on collecting commissions on renewals and waiting for a hard market to drive your growth. But this strategy can cost your business more than you might think. The reason is attrition.
Attrition may not seem to be a concern until you look at the numbers. If you lose just 5% of your business annually, after five years, you’ll have just 77% of your current business. This number shrinks to 66% after eight years. And, no matter how great your service and customer relationships, you are going to lose some of your clients every year. Some may sell their cars or homes. Some may move away. Others may die. Still others may be picked off by your competition—especially if you have lost the drive to compete for new business. Just think back to when you were starting out—full of excitement and enthusiasm and up for winning new business every day. Those eager competitors may now be soliciting your clients.
Address and overcome burnout
You may love going into work every day, but if you find that the daily challenge of growing your business has become more than just the occasional grind, you may be suffering from job burnout. According to a November 2018 Mayo Clinic article, “Job burnout is a special type of work-related stress—a state of physical or emotional exhaustion that can affect your physical and mental health.” Symptoms can include the feeling of having to drag yourself to work each day, a decrease in energy needed to be consistently productive, finding it hard to concentrate and/or irritability or impatience with coworkers and clients.
Fortunately, there are several ways to combat job burnout and get back to enjoying the work at hand.
Time Off: Spending time away from the office is one of the best ways to recharge your batteries and reduce burnout. According to a June 2017 Allina Health post by Shannon Torberg, PsyD, LP, people who take vacations have lower stress, less risk of heart disease, a better outlook on life and more motivation to achieve goals. You may find it hard to leave the job behind, as do I, but with a sensible delegation plan and a strategy of periodically checking email and text messages, you can break away without feeling completely disconnected and begin improving your physical and mental health almost immediately.
Time Out: Short breaks or timeouts can also help you clear your head and reenergize. Consider exercising for 30 minutes at lunch or after work. Doing something physical for just 30 minutes most days of the week can make a huge difference in your physical and mental health. Consider committing to taking an afternoon off each week to do something you enjoy such as golfing, fishing, seeing a movie or volunteering at a local school or nonprofit organization. These breaks can be a game changer when it comes to burnout.
Time In: Don’t have 30 minutes in your day to spare? Consider taking a break right in your office. According to an April 2017 Psychology Today post by Meg Selig, “movement breaks” of five to ten minutes each hour can improve your health and well-being, prevent “decision fatigue” and restore motivation, increase productivity and enhance creativity. Even disrupting your thoughts by taking time to help a coworker, give a compliment or visualize your favorite retreat can provide a mental break that can boost creativity and may result in an “aha” moment.
Switch off cruise control to shake things up
Once you turn off the autopilot and reduce burnout, take time to look at strategies to grow your business. But before you begin planning in earnest, consider getting a new perspective. Outside advisors who are familiar with your business—industry consultants, your accountant or your attorney, for example—may have insight that is not readily apparent from your point of view. Encourage them to ask you tough questions and provide honest feedback. In addition, free mentoring services can be found online and can be a great source of business advice.
Armed with new insight, you are ready to begin researching growth options and also determine why you want to grow. Are you taking your business to the next level or wanting to grow as a part of healthy succession planning? No matter the reason, new ways of growing can invigorate you, your employees and your business.
Perhaps the easiest way to spur growth is by adding fresh talent or eliminating employees who are not productive. Hiring the right people can inject new energy and resources into your business in a couple of ways. First, there is the increased revenue the new employee will generate. Second, new hires often bring much-needed enthusiasm which can be infectious, spreading to everyone in the office.
Diversifying your offerings by exploring coverages such as cyber, energy, employee benefits and other categories with increasing demand is another way to grow. Diversification provides an ideal reason to reach out to your current clients to ascertain if their needs have changed and to help them proactively manage their risks. Use this opportunity to also ask for and secure referral business.
Next, think about broadening your footprint by expanding into a new market or geographic area by opening a satellite office or acquiring an existing agency or book of business.
Once you have researched and assessed all of your options, it is time to create a business plan with clear, concrete goals, backed by specific action steps and timelines. Your plan does not have to be long and complicated, but it should spell out goals for growth and the strategies and tactics you will use to reach them. Additionally, include an honest appraisal of what you can afford and how you will finance your plans for growth.
Fuel your acceleration
Whether you are looking for capital for growth, acquisitions or succession planning, it is important to plan strategically, set realistic expectations and carefully research your funding options. Ideally, insurance professionals will look to a specialty lender with expertise in lending to the insurance industry. Generally, such lenders would be able to lend based on an insurance business’s intangible assets and would value the future cash flow that’s embedded in your insurance policies or future commissions as the primary “collateral” for loans up to $30 million. Also consider whether the lender sells loans after origination or partners with the borrower for the life of the loan. That’s the difference between a transaction and a relationship.
With proper planning, growth is within your reach. Make the decision to drive the positive momentum of your business as you reignite the excitement that growing can bring to you and your team.
Rick Dennen is the founder, president and CEO of Oak Street Funding, a specialty lending company that provides commission-based lending for insurance businesses. Since founding Oak Street in 2003, under Rick’s leadership the business has experienced exponential growth and has a portfolio that exceeds $1 billion. Dennen is a licensed agent for Life, Accident & Health products in Indiana and holds one or more of these licenses in 45 other states. 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. Rick can be reached at