Page 196 - The UnCaptive Agent

EARLY DAYS OPERATIONS: CHASE THE VISION, NOT THE MONEY 169

profits will come—but commit yourself to only spending
cash, not profits.

Know Your Numbers

The second focus you need to have in building your
business is to know your numbers. I’m constantly
amazed when I ask agency owners simple questions
like, “What is your revenue per client?” and they give
me a blank stare. As I pointed out earlier, accounting
is the language of business. You should ask yourself,
do you speak that language? And if you don’t, you
need to take a crash course in accounting. That’s easy
today with the Internet. And it’s certainly very possible
with the help of a friend or an accountant. You need
to focus on understanding your financial statements
along with reading them.
You should have a focus on benchmarking. We are
very fortunate in the independent agency system that
we have two significant benchmarking studies. The
Growth and Performance Standards published by the
National Alliance for Research Academy, and the Best
Practices Study, published by Reagan Consulting and
the IIABA, provide a lot of rich detail on what other
agencies are receiving in terms of revenue—and more
importantly, how they are spending their money and how
much money they are making. If you will make a point
to benchmark your agency against agencies of similar
size and location as your own, you will avoid wasting
money, and you will see opportunities for tightening up
your operation. You will see new ways to garner reve-
nue that perhaps you hadn’t thought of before. I think
benchmarking is one of the most important things an
agency can do to guarantee its success and its consis-
tent growth and profitability. I have benchmarked my