On the surface, I am sure the above caption sounds arrogant to the reader, but it isn’t meant to be an arrogant statement. At least, it is not intended to be a statement born out of an arrogant heart. Instead, it is meant to be one that is rooted in gratefulness and in the realization that the noble profession we have chosen, the insurance and financial services profession, is one of the greatest professions that has been conceived by the mind of man.
In a world where people toil to make a living, an honest living, and work to provide for their needs and their family’s needs, we get to do one of the better things in life and sell insurance.
What I mean by that statement is this; there are a lot of good and great things that people can do for a living. There are professions and lifelong pursuits such as being a physician to the poor and under-privileged, counseling of the mentally ill and those in crisis, being a nurse, a fireman, policeman and countless other vocations which can be said to be noble in serving the common good of all mankind. These individuals, and others like them, are heroes and are to be honored for the sacrifices and risks they take on behalf of others.
Our Profession is a Noble Pursuit…We Serve the Common Good of all Mankind
But for those of us who are agents, advisors and consultants who sell insurance products and financial services, I would like to say simply, we are cool.
Yes, our profession is a cool profession; a profession that is so often misunderstood and unfairly maligned by the general public, a profession that is vital to industry, vital to our high standard of living, vital to innovation and invention; a profession that is the foundation for so many other industries and people. Take away the insurance & financial services industry and you do damage to the entire landscape of society.
Keeping the Promises…Other People Make
We help keep the promises…that other people make to their loved ones and business partners. Though a loved one may die, a home burns down, business ambitions are lost, or a car is stolen; we are there for our clients…keeping the promises they have made to their families, their friends, their colleagues and business partners by way of insurance protection. We are the means to an end…And that end has nothing to do with what it is that we sell…but in what we can do for people and what our products can do for them.
So if we are so cool, why do people have such a low opinion of our industry and profession? Who is to blame for our poor public image?
To a large degree, those of us who work in this industry are to blame for the negativity and distrust dominating public opinion. Simply put, we aren’t talkative enough about the great things we do for people. Our problem is in a failure to tell our story to enough people…enough of the time.
We Don’t Tell Our Story to Enough People…Enough of the Time
We need to tell our story, to talk about our good deeds in restoring people and making them whole financially. We need to make sure people hear about how we’ve helped people avoid financial ruin or getting into a financial crucible where bankruptcy would have been the logical next step for them had it not been for insurance money to save the day.
Consider What We Do and You’ll Understand the Caption to this Article
That’s right, we are cool. We are in a great and noble industry. And when I hear people quip about how insurance is a “rip off’ or complain about how we work to deny claims and to not pay what we promise, I let people know that such a statement is untrue.
Why? Because I know and respect the people who make the industry so wonderful…good people…dedicated and hard working individuals…and I can’t remain silent when such things are said. Rather, I will tell the story of how insurance and the industry is one of the noblest professions around and how it can keep them from having an accident turn into a tragedy by way of financial hardship.
Consider Life Insurance & the Impact a Policy can Have on a Family’s Future
For example, the loss of a loved one is devastating, to say the least. As a human being who loves people and cares for them deeply, I wish I could take the pain and grief left for the surviving family members away when someone dies... But, I can’t take away their heartache; no one can. It is…what it is…and so life goes on and we can only pray and hope that the future is brighter for those left behind to carry on.
But, things don’t always move forward as hoped. In fact, it is my observation that the loss of a loved one does one of two things to the surviving family members. It either brings a family together making them closer than ever. Or, it tears a family apart driving a wedge between brothers and sisters, husbands and wives...fostering resentment and bitter feelings in the aftermath of a tragedy.
The reasons can vary widely as to why a division among family members can occur. Nonetheless, pile on the bills in the aftermath of a loved one’s death and the likelihood for strife and a rift among family and friends is dramatically increased. Hence, the miracle of life insurance and how it provides families and individuals with the liberty to deal with the pressures of a loved one dying and the associated financial pressures that follow. The agent who sells a life insurance policy today...can be preserving the relationships of brothers, sisters, mothers, and fathers for generations to come. I'll bet you never really thought of it that way before...That is why I say, we are cool.
I Did Not Drink the Kool-Aid®
I am not an apologist for the insurance industry, nor am I someone who blindly follows along; drinking the Kool-Aid® of mindless agreement with everything we do....I also don’t think they need me to argue in support of what they do…I believe their actions and good deeds speak for themselves. Are there bad actors in the industry? Yes. What industry doesn’t have its problem children; companies who practice illegal and deceptive practices that harm the consuming public and tarnish the reputation of others as a result. But those are few in number and they do get policed. Heightened vigilance in the industry to make sure consumers are treated fairly and right is something I am fully in support of in order to avoid and stop abuses and other misconduct by insurance companies.
Don’t Gush All Over When People Buy Off of You…You Know What I Mean…
Bottom line, when someone buys off of me…or you…be grateful that they chose you as their trusted advisor, their insurance agent who is responsible for making sure that they are protected for what they need and want. That is a good thing…gratitude is an appropriate reaction towards a customer who selects you and trusts you to be their agent, particularly since there are so many agent choices out there today.
What isn’t appropriate is the notion of gratefulness that is born out of a sense of unworthiness or favor…In other words, I do not think it is healthy to think of yourself as lucky or fortunate to have had someone actually do business with you, as if, the customer has better choices than you for an agent and they stuck with you anyway. That’s nonsense. You are the better choice.
My sense of the matter is that some agents, particularly new agents, do feel a bit of the “unhealthy” gratitude I just mentioned. The quicker that kind of thinking is dispensed with the better for you as a professional. Bottom line, no one will have ever done you a favor by buying off of you…
You will have done the favor by seeking them out as a prospect, planning a sales conversation that is persuasive and compelling, and in monitoring their needs and meeting with them periodically to review their situation and adjust their individualized insurance plan so it is current and relevant for what they want and need.
That’s a lot of work, energy, concern and dedication invested in a client by an agent…That’s why I say, No one will have ever done you a favor by buying off of you…It’s because we earn our livings by making sure other’s lives are secure…
For that reason, our clients should be thanking us for doing the worrying for them so they don’t have to…
No One Will Ever Have Done You a Favor by Buying Off of You...
The Favor Will Have Been all Yours...
Copyright © 2009 - Tony Cefalu
Monday, November 16, 2009
Tuesday, November 10, 2009
Off to a Good Start...But with No End in Sight
90% of the game is half mental.
Yogi Berra
Marathon runners are a very special breed of people. They’re special because of the limits that they push their bodies in a 26.2 mile race; limits that not only test the endurance of the human body, but the power of the will to go on despite the minds rejection of the endeavor and the spirits despair at the daunting task of a finish line unseen.
At what mile mark do most runners quit a marathon? If you are like me, you would probably say the 5th or 10th mile; when the finish line seems so far away and the body’s strain is beginning to anticipate the excruciating pain to come.
But like most things in life, a seemingly simple matter such as the question of when most runners quit running in a marathon race, is not as easily answered as first thought.
It is Important to Get off to a Good Start when Setting out to Run a Race
Aside from the first mile, the 26th is when the least amount of people quit the race. I think the reason that this is true stems from a simple explanation of line-of-sight, or vision for the finish line, where the power of the mind can push the body beyond normal physical limits by way of a clear goal toward the future.
It is important to get off to a good start at the beginning of a race. If a person is to have any chance of success at something, a clear picture of the end in mind is very important in order to start strong and committed, no matter the challenge or the goal. So the beginning of a task, such as the first mile in a 26.2 mile marathon, witnesses very few people quitting because a runners vision of the finish line is so fresh and untested.
Most runners don’t quit at the first mile or so of a marathon because of fresh line-of-sight to the goal…And most marathon runners don't quit during the final mile, the 26th mile either, because they have a vision of where they are going; a vision that is tangible, palpable and real…a vision they can actually see. Sure, they are physically exhausted, but their vision fuels them and tells them to keep going to reach their destination; their prize..
If There is No End in Sight…There’s No End in Sight
Most runners quit a marathon at the 20th mile, a rather strange point it seems to be quitting. Think of the personal investment made by the runner up this point; all the pain, tolerance and sheer will power to keep going just to stop short of the finish line. Why? I think the answer goes back to the original discussion of vision and having a clear line of sight to the goal.
When We Lose Sight of the Prize, the Finish Line…Quitting Makes Sense
When we lose sight of the prize, we lose sight of our purpose and motivation to continue on. If there is no end in sight for the runner, there is no end in sight that can be achieved. Even though a person may be invested both physically and mentally in a given endeavor; invested to the point at which it seems impossible to ever want to give up; it happens. When goals fade away and a vision for the future dissipates, no measure of personal power will sustain the effort to move forward and take another step.
Where there is no vision the people perish.
This underscores an important principle that is a key to success, health and happiness.
That important principle is this:
You must keep your vision alive and stay mentally, emotionally and spiritually fit in order to prosper as an agent, a business owners, husband, wife, father, mother and individual. Know your business plan and envision for yourself what it is you want your agency, or small business, to be known for and remembered for.
After all, there will be days when your body will say no while the mind has to say yes. There will be times when it seems that everything in life conspires to sabotage your goals and dreams. And there will be weeks or even months when you feel like you are hitting the 20th mile. Don’t stop. Keep your eye on the vision of what you want for your business and for you family.
The answer to running the race is to maintain your vision and focus on the finish line. Keep your vision alive and it will keep you alive. Don't give up. Keep striving towards the vision planted in your mind and heart.
In closing, here's a simple 3 step process to keep your vision alive.
1. Write it Down…Write down your vision for your life and career. I heard it once said, If you think it, ink it! That’s good advice. Agents who force themselves to write down their goals end up accomplishing those goals more readily than if they hadn’t.
2. Know your WHY. Why is this vision significant to you? What do you hope for? What is the bigger reason for your vision? Your why is your purpose. You must know your purpose or vision in life. Vision without purpose is like trying to drive a car without an address for a destination.
3. Review your Why statements on a weekly, if not daily, basis. Remember, if you keep your vision alive it will keep you alive.
Purpose fuels your vision and it fuels you. Write down your WHY and your vision for the future will stay clear.
Copyright © 2009 - Tony Cefalu
Yogi Berra
Marathon runners are a very special breed of people. They’re special because of the limits that they push their bodies in a 26.2 mile race; limits that not only test the endurance of the human body, but the power of the will to go on despite the minds rejection of the endeavor and the spirits despair at the daunting task of a finish line unseen.
At what mile mark do most runners quit a marathon? If you are like me, you would probably say the 5th or 10th mile; when the finish line seems so far away and the body’s strain is beginning to anticipate the excruciating pain to come.
But like most things in life, a seemingly simple matter such as the question of when most runners quit running in a marathon race, is not as easily answered as first thought.
It is Important to Get off to a Good Start when Setting out to Run a Race
Aside from the first mile, the 26th is when the least amount of people quit the race. I think the reason that this is true stems from a simple explanation of line-of-sight, or vision for the finish line, where the power of the mind can push the body beyond normal physical limits by way of a clear goal toward the future.
It is important to get off to a good start at the beginning of a race. If a person is to have any chance of success at something, a clear picture of the end in mind is very important in order to start strong and committed, no matter the challenge or the goal. So the beginning of a task, such as the first mile in a 26.2 mile marathon, witnesses very few people quitting because a runners vision of the finish line is so fresh and untested.
Most runners don’t quit at the first mile or so of a marathon because of fresh line-of-sight to the goal…And most marathon runners don't quit during the final mile, the 26th mile either, because they have a vision of where they are going; a vision that is tangible, palpable and real…a vision they can actually see. Sure, they are physically exhausted, but their vision fuels them and tells them to keep going to reach their destination; their prize..
If There is No End in Sight…There’s No End in Sight
Most runners quit a marathon at the 20th mile, a rather strange point it seems to be quitting. Think of the personal investment made by the runner up this point; all the pain, tolerance and sheer will power to keep going just to stop short of the finish line. Why? I think the answer goes back to the original discussion of vision and having a clear line of sight to the goal.
When We Lose Sight of the Prize, the Finish Line…Quitting Makes Sense
When we lose sight of the prize, we lose sight of our purpose and motivation to continue on. If there is no end in sight for the runner, there is no end in sight that can be achieved. Even though a person may be invested both physically and mentally in a given endeavor; invested to the point at which it seems impossible to ever want to give up; it happens. When goals fade away and a vision for the future dissipates, no measure of personal power will sustain the effort to move forward and take another step.
Where there is no vision the people perish.
This underscores an important principle that is a key to success, health and happiness.
That important principle is this:
You must keep your vision alive and stay mentally, emotionally and spiritually fit in order to prosper as an agent, a business owners, husband, wife, father, mother and individual. Know your business plan and envision for yourself what it is you want your agency, or small business, to be known for and remembered for.
After all, there will be days when your body will say no while the mind has to say yes. There will be times when it seems that everything in life conspires to sabotage your goals and dreams. And there will be weeks or even months when you feel like you are hitting the 20th mile. Don’t stop. Keep your eye on the vision of what you want for your business and for you family.
The answer to running the race is to maintain your vision and focus on the finish line. Keep your vision alive and it will keep you alive. Don't give up. Keep striving towards the vision planted in your mind and heart.
In closing, here's a simple 3 step process to keep your vision alive.
1. Write it Down…Write down your vision for your life and career. I heard it once said, If you think it, ink it! That’s good advice. Agents who force themselves to write down their goals end up accomplishing those goals more readily than if they hadn’t.
2. Know your WHY. Why is this vision significant to you? What do you hope for? What is the bigger reason for your vision? Your why is your purpose. You must know your purpose or vision in life. Vision without purpose is like trying to drive a car without an address for a destination.
3. Review your Why statements on a weekly, if not daily, basis. Remember, if you keep your vision alive it will keep you alive.
Purpose fuels your vision and it fuels you. Write down your WHY and your vision for the future will stay clear.
Copyright © 2009 - Tony Cefalu
Sunday, November 8, 2009
Hire for the Position, Not the Person
Recruiting, Hiring and Firing. It Comes with the Territory…
Recruiting, interviewing, hiring, executing background checks, plus training and integrating individuals into capable business associates is an undeniable function within all business entities. The agent-owner who effectively and economically executes their role in these areas will be the business entity that survives another day in fulfilling the business purpose. Those who get lost in the hiring process; getting bogged down by uncertain recruiting costs and high expenses involved with installing new hires into the organization...will not survive.
In order to remain viable as a business entity and to sustain growth, agency-owners must be constantly scouting talent while at the same time ready to assess the potential of a candidate’s fitness to fill a given position. Thus, it is extremely important for the agent-owner to draft detailed job descriptions for each position within the organization detailing all function within the agency that fall under the requirements of the position before ever considering to recruit and hire someone.
The on-boarding of new talent can be expensive. At least, it can be expensive when considering the cost involved with acquisition costs and the time invested in evaluating each potential hire. It can also be expensive from a production standpoint. Specifically, if the candidate hired does not perform well in the position they are hired to fulfill, the expense to the agent–owner can be enormous...and can be measured in actual dollars and cents.
That is the great challenge in hiring any new employee into an agency or other small business; making them a center for profit versus an expense on the balance sheet at the end of the year.
How Can I Increase My Chances of Making a New Employee a Profitable Employee?
So, what can an agent or small business owner do to increase the likelihood that a new hire will be a revenue center for them rather than another expense to worry about? The best thing an agent can do to ensure that happens is by being disciplined in the hiring process.
What does it mean to be disciplined in the hiring process? What it means to be disciplined in the hiring process is this; all too often agents who have determined that their business operation needs a new employee will seek to fill that position with someone who is seasoned in the business and already licensed rather than someone who can satisfy the requirements of the job. Worse yet, the reason for hiring some individuals will rest on whether the agent-owner “liked” them or not for some particular reason.
Experience, licenses and a likability factor are important aspects to consider during the selection phase; but alone, these factors in determining whether to hire someone or not can produce disastrous results for the agent-owner. Remaining disciplined in your approach to recruiting and evaluating talent is vital in matching the right candidate for the position at hand. The proper way to evaluate talent is against a standard based on the skill sets necessary to perform the functions of the open position.
Use a Job Description & Match the Requirements of the Position to the Person
Being disciplined in the hiring process means deliberately matching the skills and abilities of a candidate with the detailed tasks as outlined in the job description. This process helps prevent the agent-owner from succumbing to the temptation of bypassing the steps necessary in matching talent to the skill sets outlined in the job description. As a result, instead of relying on the uncertain factors of "personality" and "industry" experience when assessing a candidate, the agent-owner can focus on specific competencies and skill sets as outlined in the job description.
The candidate who is hired for what they can do, rather who they are...has the greater likelihood of being the best hire. The benefit to be gained in adopted such a policy when recruiting talent is this; trading the opportunity to hire the best candidate for the expediency of selecting someone with experience and a license is a foolish thing. Such an unstructured and random selection process can only result in the wrong person being hired.
That alone has a cost all its own; literally.
Copyright © 2009 - Tony Cefalu
Recruiting, interviewing, hiring, executing background checks, plus training and integrating individuals into capable business associates is an undeniable function within all business entities. The agent-owner who effectively and economically executes their role in these areas will be the business entity that survives another day in fulfilling the business purpose. Those who get lost in the hiring process; getting bogged down by uncertain recruiting costs and high expenses involved with installing new hires into the organization...will not survive.
In order to remain viable as a business entity and to sustain growth, agency-owners must be constantly scouting talent while at the same time ready to assess the potential of a candidate’s fitness to fill a given position. Thus, it is extremely important for the agent-owner to draft detailed job descriptions for each position within the organization detailing all function within the agency that fall under the requirements of the position before ever considering to recruit and hire someone.
The on-boarding of new talent can be expensive. At least, it can be expensive when considering the cost involved with acquisition costs and the time invested in evaluating each potential hire. It can also be expensive from a production standpoint. Specifically, if the candidate hired does not perform well in the position they are hired to fulfill, the expense to the agent–owner can be enormous...and can be measured in actual dollars and cents.
That is the great challenge in hiring any new employee into an agency or other small business; making them a center for profit versus an expense on the balance sheet at the end of the year.
How Can I Increase My Chances of Making a New Employee a Profitable Employee?
So, what can an agent or small business owner do to increase the likelihood that a new hire will be a revenue center for them rather than another expense to worry about? The best thing an agent can do to ensure that happens is by being disciplined in the hiring process.
What does it mean to be disciplined in the hiring process? What it means to be disciplined in the hiring process is this; all too often agents who have determined that their business operation needs a new employee will seek to fill that position with someone who is seasoned in the business and already licensed rather than someone who can satisfy the requirements of the job. Worse yet, the reason for hiring some individuals will rest on whether the agent-owner “liked” them or not for some particular reason.
Experience, licenses and a likability factor are important aspects to consider during the selection phase; but alone, these factors in determining whether to hire someone or not can produce disastrous results for the agent-owner. Remaining disciplined in your approach to recruiting and evaluating talent is vital in matching the right candidate for the position at hand. The proper way to evaluate talent is against a standard based on the skill sets necessary to perform the functions of the open position.
Use a Job Description & Match the Requirements of the Position to the Person
Being disciplined in the hiring process means deliberately matching the skills and abilities of a candidate with the detailed tasks as outlined in the job description. This process helps prevent the agent-owner from succumbing to the temptation of bypassing the steps necessary in matching talent to the skill sets outlined in the job description. As a result, instead of relying on the uncertain factors of "personality" and "industry" experience when assessing a candidate, the agent-owner can focus on specific competencies and skill sets as outlined in the job description.
The candidate who is hired for what they can do, rather who they are...has the greater likelihood of being the best hire. The benefit to be gained in adopted such a policy when recruiting talent is this; trading the opportunity to hire the best candidate for the expediency of selecting someone with experience and a license is a foolish thing. Such an unstructured and random selection process can only result in the wrong person being hired.
That alone has a cost all its own; literally.
Copyright © 2009 - Tony Cefalu
Saturday, November 7, 2009
Your Money is Your Business...Literally!
Expense Management is a Key to Survival for the Small Business Owner
It is a very competitive business landscape in virtually every sector of the market; particularly hard hit by rising costs in recent years has been the insurance and financial services industry. The slightest miscalculation in spending valuable agency resources can result in a tremendous amount of harm to vital cash-flow needs and deplete precious capital reserves needed to continue operating the agency and meeting payroll demands.
As premium revenues steadily decrease among most insurance companies along with increasing operating expenses, agents are seeking new outlets and touch points to acquire customers and access new streams of prospects to drive growth, achieve policy count increases and offset the challenge of higher operating expenses. The adoption and use of the Internet and direct access points are two examples which indicate the heightened concerns agents have for rising costs in doing business while trying to maximize revenues. These new channels promise a low cost burden to the agent while at the same time delivering a high impact marketing benefit…That’s just what any small business owner needs today.
It all Begins with a Simple Choice
Expense management is not as complicated a matter as is often made of it at the agency level. In fact, when considered against the backdrop of some simple questions related to sales & marketing, determining what is a wise business expense to assume versus one that is not…is a simple task.
It is not the choice between one thing to spend money on and another that presents difficulty for most agents. It is the actual follow through on that decision, or the execution of the choice to spend or not to spend, that causes the most problems for agent and other small business people. Making the choices between good and bad, wise and foolish, smart and…not so smart, are easy choices to make. But acting on those choices; now that is a different challenge altogether.
The Two Question Standard and The Magic of Follow Through
Expense management begins with the two question standard.
1. Is the money I am considering spending intended to drive prospects to my business?
2. If not, does the money I am considering spending go towards keeping the business entity viable and operating effectively and efficiently so I can drive customers to my storefront and keep the current ones that I have acquired?
-If the answer to both questions is, no; then don’t spend the money…Or, if you feel absolutely compelled to spend the money anyway, at least, spend the money very slowly, deliberately…and very reluctantly.
-If the answer to either is, yes, then spend it…And, yes, spend it carefully and wisely.
Recognize that the farther you deviate from this two question standard, the farther away the business drifts away from profitability and solvency.
Expense management has to do with the discipline of follow through.
Can you say, no, to one expense and, yes, to another after applying the two question standard…and then actively follow through with the decision?
Before you answer that question, consider the following example: You are contemplating buying satellite radio for your business car because you are in it so much; with all the driving back and forth to appointments & meetings plus the local channels have such poor reception, satellite radio would be a welcome addition to the business environment.
The above example is a seemingly inane circumstance; the kind of expense that is common and minimal in comparison to other large expenses that an agent, or business owner, is accustomed to making.
Satellite radio; it’s only $12 month, that's $144 a year to enjoy the benefit of uninterrupted reception with a myriad of channel choices for a reasonable cost. What harm can it do to have that in the car? Besides, my comfort is an important aspect of work and of life itself. I have earned it.
I would agree with what could be said to justify the purchase. But those things are irrelevant when considered against the two question standard.
1. Is the money I am considering spending on the satellite radio intended to drive prospects to my business? (Answer: No)
2. Does the money I am considering spending on the satellite radio go towards keeping the business entity viable and operating effectively and efficiently so I can keep current customers or drive new customers to my storefront? (Answer: No)
I am not begrudging agents and other business owners the liberty to spend their money on what they want. The freedom to make choices and decisions is one of the great attractions of being a business owner; and being an American for that matter. What I am suggesting is that agents take the time to consider their expenditures, and impulses, through the filter of the two question standard.
Impulses and Careless Spending can Lead to Business Failure
Many times, I have observed the unnecessary spending of precious business funds on things that are not relevant to the business goal. Blackberry phones, expensive pens and office items, unneeded office furniture and decorations, unnecessary and frequent business meals and excessive spending on office supplies to name a few are examples of expense traps that many agents can fall prey to when making spending choices. And as a matter of record, it is oftentimes the small and seemingly “harmless’ expenditures that cause big problems for the agent owner.
Inevitably, the day will come when money is needed for an expenditure that could actually drive prospects to your storefront, but the funds are not there; Why? Because satellite radio and that Monte Blanc pen you wanted for the office to impress clients was purchased instead. Logic could be used to justify the purchasing of all of the aforementioned items, but if squarely applied to the two question standard and critically assessed in regard to their benefit to the overall success of the agency, the answer would be to forego those expenses and apply them to marketing & sales processes within the office that will have a direct impact on revenues and in lowering expense ratios.
Freedom can Kill You…And it can Kill the Business…
Again, I feel it necessary to remind readers that your money is your business, literally. The ability to spend money and to make choices is a relative matter and a highly personal one as well. Some agents have the fortunate ability to spend more than others. Some agents have a very narrow margin of discretionary money, and are thus; more sensitive to cash-flow issues. This causes them to keep expenses strictly centered on profit and growth spending moreso than the individual with a greater capacity for spending outside thee boundries of necessity.
Agents operating under narrow margins, which are most common, have no latitude for deviation from the two question standard. Still, the wonderful part of business ownership is the ability to exercise personal authority over the spending of money as you see fit. Afterall, it is your business, and no one elses, when it comes to what you spend your money on.
But with the wonderful privilege of business ownership and the freedom of choice that comes with it, there can also be the curse of that same freedom and liberty associated with business ownership. Freedom without self-discipline is a killer. It’s a killer of profit. It’s a killer of production excellence. It’s a killer of a small business…and it is a killer of personal achievement. Freedom without discipline soon leads to bondage and enslavement, if not literally, at least financially when it comes to agent owners.
The Answer to the Question is Not the Solution.
The Solution to the Question is Not the Answer.
What You Do with the Answer is the Solution to the Question.
In regard to expenses and managing them properly as a business owner, there’s a certain discipline necessary that every agent-owner must exercise in order to adhere to the two question standard.
That discipline is rooted in the habit of always personally asking the two question standard whenever contemplating business expenditures and executing upon what has been concluded to be the answer to those questions.
For the answer to expense management issues is not the solution to the question; it is the active adherence to the answer that is the solution to the question…and the question, once again, is this:
1. Is the money I am considering spending intended to drive prospects to my business?
2. Does the money I am considering spending go towards keeping the business entity viable and operating effectively and efficiently so I can keep current customers or drive new customers to my storefront?
The answer is going to be either, yes or no. But the solution is not in concluding on a yes or no answer. The solution is in the deliberate, disciplined act of not spending when it is so indicated, or by spending when it is indicated. That is the discipline of expense management. Sounds simple in its basic form…and it is simple. The hard work is in the application of the answers; the discipline and determination to execute on the answers is the challenge and the magic to effective expense management as an agency owner.
Expense Management Relies on Metrics
Finally, expense management relies on metrics or reports that are generated in regard to revenues, expenses, production, growth, retention and a number of other factors which are used to measure the condition of the business entity and the effectiveness of business processes and personnel. One thing is certain, in any modest sized business organization, there are always metrics available to measure and gauge various aspects of the business and assess alternatives to increase production, improve upon service and manage expenses.
Use metrics in order to analyze the condition your business is in and to be able to adjust your operations accordingly; to capitalize on an opportunity, identify a shortfall, and avoid a business threat or to improve upon an operational efficiency.
Successful People Know Their Numbers
Metrics, in regard to your expenses, provide the owner with a line-of-sight to problems on the horizon before they become problems in the moment where time to make a good decision is not an option.
It has been said on many occasions; successful people know their numbers. Know your numbers…Use the reports made available to you to stay informed on where you are spending money and how you may improve upon business operations to create efficiencies and reduce overall costs at the same time.
Use the two question standard to determine whether or not to spend money on something…Then apply discipline to the answers you conclude. That is the simplicity of expense management at the agent owner level.
Afterall, your money is your business.
Copyright © 2009 - Tony Cefalu
It is a very competitive business landscape in virtually every sector of the market; particularly hard hit by rising costs in recent years has been the insurance and financial services industry. The slightest miscalculation in spending valuable agency resources can result in a tremendous amount of harm to vital cash-flow needs and deplete precious capital reserves needed to continue operating the agency and meeting payroll demands.
As premium revenues steadily decrease among most insurance companies along with increasing operating expenses, agents are seeking new outlets and touch points to acquire customers and access new streams of prospects to drive growth, achieve policy count increases and offset the challenge of higher operating expenses. The adoption and use of the Internet and direct access points are two examples which indicate the heightened concerns agents have for rising costs in doing business while trying to maximize revenues. These new channels promise a low cost burden to the agent while at the same time delivering a high impact marketing benefit…That’s just what any small business owner needs today.
It all Begins with a Simple Choice
Expense management is not as complicated a matter as is often made of it at the agency level. In fact, when considered against the backdrop of some simple questions related to sales & marketing, determining what is a wise business expense to assume versus one that is not…is a simple task.
It is not the choice between one thing to spend money on and another that presents difficulty for most agents. It is the actual follow through on that decision, or the execution of the choice to spend or not to spend, that causes the most problems for agent and other small business people. Making the choices between good and bad, wise and foolish, smart and…not so smart, are easy choices to make. But acting on those choices; now that is a different challenge altogether.
The Two Question Standard and The Magic of Follow Through
Expense management begins with the two question standard.
1. Is the money I am considering spending intended to drive prospects to my business?
2. If not, does the money I am considering spending go towards keeping the business entity viable and operating effectively and efficiently so I can drive customers to my storefront and keep the current ones that I have acquired?
-If the answer to both questions is, no; then don’t spend the money…Or, if you feel absolutely compelled to spend the money anyway, at least, spend the money very slowly, deliberately…and very reluctantly.
-If the answer to either is, yes, then spend it…And, yes, spend it carefully and wisely.
Recognize that the farther you deviate from this two question standard, the farther away the business drifts away from profitability and solvency.
Expense management has to do with the discipline of follow through.
Can you say, no, to one expense and, yes, to another after applying the two question standard…and then actively follow through with the decision?
Before you answer that question, consider the following example: You are contemplating buying satellite radio for your business car because you are in it so much; with all the driving back and forth to appointments & meetings plus the local channels have such poor reception, satellite radio would be a welcome addition to the business environment.
The above example is a seemingly inane circumstance; the kind of expense that is common and minimal in comparison to other large expenses that an agent, or business owner, is accustomed to making.
Satellite radio; it’s only $12 month, that's $144 a year to enjoy the benefit of uninterrupted reception with a myriad of channel choices for a reasonable cost. What harm can it do to have that in the car? Besides, my comfort is an important aspect of work and of life itself. I have earned it.
I would agree with what could be said to justify the purchase. But those things are irrelevant when considered against the two question standard.
1. Is the money I am considering spending on the satellite radio intended to drive prospects to my business? (Answer: No)
2. Does the money I am considering spending on the satellite radio go towards keeping the business entity viable and operating effectively and efficiently so I can keep current customers or drive new customers to my storefront? (Answer: No)
I am not begrudging agents and other business owners the liberty to spend their money on what they want. The freedom to make choices and decisions is one of the great attractions of being a business owner; and being an American for that matter. What I am suggesting is that agents take the time to consider their expenditures, and impulses, through the filter of the two question standard.
Impulses and Careless Spending can Lead to Business Failure
Many times, I have observed the unnecessary spending of precious business funds on things that are not relevant to the business goal. Blackberry phones, expensive pens and office items, unneeded office furniture and decorations, unnecessary and frequent business meals and excessive spending on office supplies to name a few are examples of expense traps that many agents can fall prey to when making spending choices. And as a matter of record, it is oftentimes the small and seemingly “harmless’ expenditures that cause big problems for the agent owner.
Inevitably, the day will come when money is needed for an expenditure that could actually drive prospects to your storefront, but the funds are not there; Why? Because satellite radio and that Monte Blanc pen you wanted for the office to impress clients was purchased instead. Logic could be used to justify the purchasing of all of the aforementioned items, but if squarely applied to the two question standard and critically assessed in regard to their benefit to the overall success of the agency, the answer would be to forego those expenses and apply them to marketing & sales processes within the office that will have a direct impact on revenues and in lowering expense ratios.
Freedom can Kill You…And it can Kill the Business…
Again, I feel it necessary to remind readers that your money is your business, literally. The ability to spend money and to make choices is a relative matter and a highly personal one as well. Some agents have the fortunate ability to spend more than others. Some agents have a very narrow margin of discretionary money, and are thus; more sensitive to cash-flow issues. This causes them to keep expenses strictly centered on profit and growth spending moreso than the individual with a greater capacity for spending outside thee boundries of necessity.
Agents operating under narrow margins, which are most common, have no latitude for deviation from the two question standard. Still, the wonderful part of business ownership is the ability to exercise personal authority over the spending of money as you see fit. Afterall, it is your business, and no one elses, when it comes to what you spend your money on.
But with the wonderful privilege of business ownership and the freedom of choice that comes with it, there can also be the curse of that same freedom and liberty associated with business ownership. Freedom without self-discipline is a killer. It’s a killer of profit. It’s a killer of production excellence. It’s a killer of a small business…and it is a killer of personal achievement. Freedom without discipline soon leads to bondage and enslavement, if not literally, at least financially when it comes to agent owners.
The Answer to the Question is Not the Solution.
The Solution to the Question is Not the Answer.
What You Do with the Answer is the Solution to the Question.
In regard to expenses and managing them properly as a business owner, there’s a certain discipline necessary that every agent-owner must exercise in order to adhere to the two question standard.
That discipline is rooted in the habit of always personally asking the two question standard whenever contemplating business expenditures and executing upon what has been concluded to be the answer to those questions.
For the answer to expense management issues is not the solution to the question; it is the active adherence to the answer that is the solution to the question…and the question, once again, is this:
1. Is the money I am considering spending intended to drive prospects to my business?
2. Does the money I am considering spending go towards keeping the business entity viable and operating effectively and efficiently so I can keep current customers or drive new customers to my storefront?
The answer is going to be either, yes or no. But the solution is not in concluding on a yes or no answer. The solution is in the deliberate, disciplined act of not spending when it is so indicated, or by spending when it is indicated. That is the discipline of expense management. Sounds simple in its basic form…and it is simple. The hard work is in the application of the answers; the discipline and determination to execute on the answers is the challenge and the magic to effective expense management as an agency owner.
Expense Management Relies on Metrics
Finally, expense management relies on metrics or reports that are generated in regard to revenues, expenses, production, growth, retention and a number of other factors which are used to measure the condition of the business entity and the effectiveness of business processes and personnel. One thing is certain, in any modest sized business organization, there are always metrics available to measure and gauge various aspects of the business and assess alternatives to increase production, improve upon service and manage expenses.
Use metrics in order to analyze the condition your business is in and to be able to adjust your operations accordingly; to capitalize on an opportunity, identify a shortfall, and avoid a business threat or to improve upon an operational efficiency.
Successful People Know Their Numbers
Metrics, in regard to your expenses, provide the owner with a line-of-sight to problems on the horizon before they become problems in the moment where time to make a good decision is not an option.
It has been said on many occasions; successful people know their numbers. Know your numbers…Use the reports made available to you to stay informed on where you are spending money and how you may improve upon business operations to create efficiencies and reduce overall costs at the same time.
Use the two question standard to determine whether or not to spend money on something…Then apply discipline to the answers you conclude. That is the simplicity of expense management at the agent owner level.
Afterall, your money is your business.
Copyright © 2009 - Tony Cefalu
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