The Practice Doctor is IN

Al Depman , CLU, ChFC, CMFC, BH

The following e-mail was received after last month’s column about what stage of development your practice is in (“Getting to Your Next Level and Staying Sane”).

“Al…I’m overwhelmed, but I think in a good way. I like the independence of the advisor’s career, but it’s like I’m being pulled in ten different directions. I feel I’m on the verge of a major breakdown. I’m having my best year ever – out of 10 – and will do $200,000 in commissions, fees and other comp. I’m primarily a generalist: no fee-based plans, but a lot of helping families and businesses grow. I have about 500 clients, and manage a few million in assets. My assistant Jan is great and she’s working to the max to keep me organized. But the sense of being overwhelmed is in all the other stuff that needs to be done behind the scenes. Seeing clients and prospects is what I love to do, but I can’t break away to do more of it. All that and we’re having our second child in August. How can I get a handle on this – any tips? Thanks. Mike S.”

Mike’s feeling of being overwhelmed is a major issue, one that every practice will face at one time or another, if not multiple times. After assessing Mike’s practice online, his score came out to be 590, which is right at the intersection of an “emerging” practice morphing into a “mature” practice.

When this “overwhelming” feeling reaches a crisis point, it represents a pivotal time in your independence as an advisor. It’s time to step away from the business and take a look at it from a detached point of view.

With Mike, we first examined the stats. We agreed on the essential statistics and ratios that would represent his practice’s growth. Mike had not been tracking his numbers, so we pulled together what we could from his calendar entries and new business records through mid-June of 2007. Mike tracks “credits” which involve a matrix of dollars-to-credit conversions based on his broker/dealer’s compensation program for the most part. He feels it’s a fair representation of his production.

Mike’s key statistics to track

In looking at the statistics, Mike has more appointments than he expected and they’re paying off. We would like to have him out in front of clients, prospects, centers-of-influence and networking groups 25 hours per week. These are the key revenue-producing activities: gathering names or gathering business. He is stuck at 20 hours. Our objective was to find that 5 hours.

Mike and I took a look at his assistant, Jan. Her job description, which we are now putting in writing, is 70% administrative and 30% marketing. She is setting up most of his appointments and managing the database. We are satisfied that she’s performing at a high level of competence.

So we need to examine Mike’s larger calendar through the rest of the summer. The green time indicates periods where Mike can focus on the true revenue-producing activities measured above.

• Mid – end of June: Face time opportunity daily, maximum appointments, 25 face hours each week.
• Early July: The 4 th of July falls on a Wednesday – Mike will take the day off, so the rest of the week is available for catch-up and minimal appointments.
• Week of July 8 – 21 Mike’s wife Marci & family will be off to Cape Cod for vacation. So Mike will have the 8 th through the 13 th home alone before he joins them. This will be another catch-up time with minimal appointments.
• Cape Cod vacation July 13 – 21
• Face time opportunity: July 23 – Aug 2 nd, maximum appointments – 25 face hours.
• President’s Club Summer meeting in Portland, OR: Aug 4 -7
• Aug 8 – 20: mixture of face time (5 face hours a day until labor) and catch up before the baby’s due.
• Due Date: Aug. 20 – 2 weeks out of the office.

Next, we itemized and prioritized the “catch-up” activities in Mike’s practice. These are the specific items that are contributing to the “overwhelming” feeling and really do seem to pull him in 12 different directions.

Once we listed all these issues, we prioritized them, put in the number of items to be addressed and estimated the time required to complete the current backlog. These are issues that Mike needs to address but can’t be added to Jan’s workload.

We agreed that this list is always in process: every day new items are added and subtracted as they get accomplished. The list as it exists is a “maximum” that Mike and Jan will accept. Items 7 – 10 should be about two pending at any one time. Items 10 – 12 should have about five pending. We aim to get to these minimum numbers by late August.

We then set up a number of spots on Mike’s calendar to address each of these areas, trying to be flexible for Mike to be with Marci or their son as the pregnancy progresses.

By the time we had broken all of this out and worked out a game plan, Mike’s sense of being overwhelmed had been reduced considerably. Keeping on top of these issues will be key. If they continue to multiply instead of coming under control due to the increased volume of referrals and new business, Mike admitted that it would be time for another assistant to work with Jan in both administrative and marketing capacities.

That’s the upside of reaching independence in your practice’s growth cycle.

Until next month,

The Practice Doctor is out!

Al Depman , CLU, ChFC, CMFC, BH, a.k.a. “The Practice Doctor”, is mitchanthony.com’s Business Practice Consultant. He is the creator of “The Practice Management Assessment” tool and materials and has authored numerous articles in professional publications on practice management. Al combined his Liberal Arts studies with 10 years of management experience with McDonald’s Corporation to enter the financial services world 22 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at al@mitchanthony.com .

© 2007 Al Depman