Making a profit – and a difference

To successfully balance your role as a financial advisor and business person you need to focus on two issues, making profit and making a difference.

As we have said many times before, profitability, rather than revenue, should be a key driver in your business. Obviously you need the revenue in the first place, but revenue is secondary to the profit that remains after the dust has settled and all the bills are paid.

Profit is the product of productivity and efficiency – and there are many ways in which you can enhance your practice’s net result. For example, much of your income is generated by spending face-to-face time with your clients. If you segment your client base on the basis of revenue generated – and then spend at least 60% of your time in front of your A-clients – there will be a definite (and probably substantial) improvement in your bottom line.

Consider a typical week and make a list of the various things that you do and the tasks you perform. Now review each item on the list by asking yourself three questions.

1. Is this something that adds value? Some tasks are necessary, some even mandatory, but they should always add value (to you, your business or your client) in one way or another. If you are doing something that is not adding value, then either change how you do it or, provided it is not compulsory, stop doing it.

2. Is this something I should be doing or should I delegate or even outsource it? Too often we end up doing things that would be better done by someone else. By outsourcing or delegating we are free to focus on our core competencies.

3. Is there a better way of doing this? Be careful of completing tasks on "auto pilot”. When you fall into this "trap” you end up doing things without giving thought to the value or benefit in the process. Take time to evaluate how you perform even the mundane tasks and you should enhance your efficiency.

Making a difference requires building financial solutions that make achieving objectives a reality. It entails delivering on a value proposition based on:

? A thorough understanding of your clients;

? An anticipation and understanding of their needs; and

? Having the knowledge and skills to create a financial plan that will address their requirements, even if they change.

It also entails being around at the right time, providing reassurance when appropriate and making adjustments to the plan to keep it on track. And that brings us to the crux of this article.

Making a profit and making a difference are not mutually exclusive. In fact, they should always go together. Being an advisor is a short term job. Making a profit and a difference in the lives of your clients is the key to a sustainable, long term career.