November 14, 2022 Comments Closed

Planning For Growth: A Matter Of Strategy

Posted by:CLIFTON WARREN onNovember 14, 2022

Do you find it a challenge to convert your revenue growth plans into reality?

Well, you’re not alone.

I regularly encounter leaders and firms who set ambitious growth goals when the market is booming but when the market shifts, these plans are quickly abandoned.

Why do so many firms struggle to convert their growth strategy into reality and to implement their plans?

The most common reason is that they are confused about the difference between strategy and tactics.

What is growth strategy?

The important thing to remember is that strategy is the ‘what’; tactics are the ‘how’ – the way to achieve it.

When market conditions favour providers, anyone can make money. For example, general insurance brokers have enjoyed solid organic growth results during the past few years; however, this is mainly due to pricing increases. In fact, real organic growth is in the low single digits or even in the negative growth range.

To develop and implement a growth strategy successfully, you require the following:

A future vision
Production goals
Individual action plans

A future vision
This is your desired future state. It is measurable result with a deadline – for example, to increase your revenues from $30 million to $60 million, in five years.

Production goals
They represent the amount of effort and activity required by the business to achieve your future growth vision.

Here are the seven elements you need to calculate it:

Gross revenue necessary
Revenue from existing clients
Net revenue needed (#1 minus #2)
Required average revenue per new sale
New sales needed (# 3 multiplied by #4)
Closing ratio
Presentations needed (#5 multiplied by #6)
Conversion ratio
First meetings needed (#7 multiplied by #8).

Individual action plans 
Every producer in the business requires a yearly individual action plan. It should contain the following metrics:

Revenue, expressed as a growth percentage over the previous year
Retention of existing clients, including associated income
The number of new clients over the past year.

You need to be proactive, making individual actions plans for each person. This should be done weekly for new professionals and monthly for everyone else.

Accountability includes providing help.

When professionals aren’t achieving according to their yearly action plans, you should give them the necessary help and take corrective actions to get them back on track.

Developing revenue growth strategy is not wishful thinking and simply hoping for the best.

It’s about developing a clear vision, taking action and creating a culture of accountability.

When you master this process, you’ll be able to produce superior growth results regardless of the market or the economy.

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