Productivity with Stuart Donaldson

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With the Christmas break just around the corner, The Adviser catches up with Stuart Donaldson, founder and owner of financial education business Banyan Co, to understand what resolutions brokers should be making to improve their business operations and boost revenue.

What should brokers be doing in the Christmas/New Year break to boost business?

In my past experiences in the banking and finance field, I always made a very big point of saying to people that whilst the industry tends to shut down in January, you shouldn’t be shutting down too. There is no such thing as down time, only creative time. So, I would dedicate a lot of my planning time in January, when I don’t have distractions from other things going on. Use the time wisely, do some thinking, and get a bit creative and put your plans together. It's a beautiful time of year to be able to do that distraction free.

Why is planning important?

When you look at business owners, whether they're working on their own or are part of a bigger team, generally speaking, you'll find that people walk in everyday and get caught in one transaction and roll onto the next one. They can tend to focus entirely on sales without necessarily looking at how they can make their business more profitable.

Complacency is a curse for all business, as is the curse of assuming that you think you know what you need to do or how things are going. You're a bit blinkered in your thinking if you're not exploring what others are doing, and you're not taking advantage of what you need to do in order to give you the right results.

My argument is that, in business, you cannot just singularly focus on one thing — you need to look at other drivers of success in your individual business and how you manage to measure those and hold yourself accountable. It’s about dedicating some time to working on the business rather than in the business.

Is business planning difficult?

There is a general fear factor when it comes to planning or putting together a business plan, and there need not be. A business plan need not and should not be some elaborate document, it should be just a reflection of your thoughts, your vision, and how you're going to get there. It can be just three or four pages that capture all the key things that you want to hold yourself account to and be focused on. It doesn't have to be some War and Peace.

In terms of execution and setting things in place, it's not difficult at all to capture the right information, measure it, monitor it, and review it and make changes as business is managed dynamically, which all businesses should be. 

However, I would strongly suggest that it would be in people's interest to gain education in this planning process to be in a position to understand what the key drivers and financial metrics they need to set up are. I think that the industry, via the industry associations and specialist media such as The Adviser, are doing a fantastic job of providing support for participants to go out and get that education. But it’s up to the individual to embrace it and it is something that they really, really must do. That will have a very, very powerful and significant impact on their business if they continue to educate.

How should brokers be planning for their business?

I would argue that business owners first of all need to dedicate time for forward planning for both the short game and the long game. In terms of the short game, it could be things like, how much you need to grow to produce a profit, meet all your expenses, and repay any debt. Once you’ve got that sales goal, how are you going to get there?

The process that I believe people ought to go through is one of initially brainstorming, right across the team, as to where you are getting business from currently and where you can get it from in future, as well as what you have to do to drive up the transaction value and the revenue.

It's important to get everyone involved in it, because across a team you're going to have different skillsets and different levels of knowledge. Team members often have a very valuable contribution to make. If you’re working with a team, the success of the whole business is the function of the collective, rather than any one individual. It would be the wrong call to think that as the business owner, you have all the answers, when in fact there's an enormous amount of experience right across the team. 

What kind of systems should brokers be putting in place?

You need to set up systems in place that allow you to have the rigour and the discipline to manage the important drivers and measure them, set goals, forward plan and then revise and review. Assuming you put those systems in place, which isn’t difficult to do, then ultimately you will build a culture around that business that is driven off greater success. 

For me, I would be setting a measurement system that measures the key drivers, from leads all the way through to revenue. The most important measure there, at each step of the way, is the conversion rates. Once I have my revenue goal, using my historical data I can make some assumptions, and I can figure out how many settlements am I going to need next year to meet that revenue goal. Based on my average transaction size, I can work that out, and based on historical conversion rates, I can also figure out how much I'm going to need in applications and we just continue to work backwards from applications to interviews to leads. Ultimately, it tells me how many leads I need in the door.

The next step in the process would be to really focus on each step of that production line on conversion rates, because for every time that you improve your conversion rate, you either reduce the number of leads you need in the door, or if you can hold that lead generation level, you will increase your probability through your revenue.

How long should brokers spend on business planning?

It doesn't need to be a huge amount of time, particularly if you are a one-man band. Set aside some time, every month, to review the business and the strategy and work on the business plan and revise it, and it will have a material impact in terms of your overall result.

You shouldn’t just do it annually - you've got to be addressing this all the time and you ought to be having a look strategically at a high-level view once a month. 

What kind of goals should brokers be setting themselves, and why are they important?

Brokers should certainly be setting annual goals, how much they want to achieve in the next year, what revenue targets, how many leads they need, and how many deals they need to write etc.

I also think people need a longer term horizon and ask themselves ‘Where am I heading? What is my vision? Why am I doing this? How do I intend to exit? What's my timeframe?’ That provides people with a compass to make sure that they a working towards something.

Brokers should set goals and put in place KPIs and measures because once you start to play with the numbers and see what it can mean in terms of benefit to the bottom line, you would be very inspired and motivated to achieve those goals.

One of my favourite saying is 'If you're not tracking, you're not looking'; you've got to track every step of the way and seek to get improvement to make forward progress.

Tips for improving business, by Stuart Donaldson

As I've travelled around the country and talked to hundreds of brokers, the good ones are the ones that are constantly coming up with good ideas. 

This isn't rocket science, this isn't people coming up with some great technological solution or platform that is going to deliver some boom, this is just a whole series of good ideas, big or small, that often come from within the team. They get implemented and executed and deliver a solid outcome for them.

Examples of good business tips include:

  • Putting TVs in waiting rooms that run adverts for the business, so clients coming in can see all the services that the business can offer, which can lead to new business generation;
  • Some brokers set targets such as seeking to have three products per client. They know that if they achieve that goal, the client is pretty much in the net and they're not likely to suffer leakage to competitors;
  • Some businesses might survey their clients after every transaction and ask for a referral, and some even pay for them, which can help generate more leads;
  • One business owner recently told me they found that the cancellation rate for deals going from application to settlement was high, so they put a huge focus on it, reviewed every deal and empowered people within the team to reconnect with the client and resurrect the deal. This drove the cancellation rate down, and was a real game changer.
  • On the flipside of looking at cancellation rates, others are very focused on conversion rates and what they are trying to do is drive that rate as high as possible. It’s about maximising every opportunity.
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