2001 Best Practices Study

Analysis of Agencies with Revenues Greater Than $10,000,000

F INANCIAL M ANAGEMENT In the area of financial management, several best practices were identified. Universally, these firms are developing budgets as a part of their overall business planning process. In doing so, a number of firms emphasize the importance of being strategic and carefully allocating valuable resources. Priorities must be established, avoiding the risk of spreading the resources too thin. Once budgets are developed, there is typically a high level of accountability as performance is measured against these budgets on a regular basis. In addition, the majority of these firms reported using comparative benchmarks not only to set budgets, but also to measure performance (industry benchmarks like Best Practices ). As it relates to financial management, the key business practice that was frequently mentioned was discipline. This not only involved the willingness to control and limit spending in many areas, but it also involved the willingness to invest money back in the business when it strategically made sense to do so. In the area of receivables management, firms reported that success came from a number of means including having clearly defined receivables policies, educating the firm’s customers on receivables policies, holding producers accountable for receivables results and providing producers assistance with their receivables. R EVENUE G ROWTH In order to be successful in their ability to grow their revenues, virtually all of these firms recognize the necessity to create a sales culture internally. Typically, this begins with leadership that recognizes the importance of sales and constantly emphasizes sales and business development. Very few organizations without effective leadership are able to be effective sales organizations. One of the ways that sales cultures are created is through goal setting and the establishment of a high level of accountability. Several of the most successful sales organizations recognize the importance of having producers, and those supporting production, take ownership of the goals and objectives that are established. A successful sales culture is one that also recognizes and rewards sales success. Several of these firms reported that material growth really came out of their willingness and ability to reinvest back in the organization. This includes investments required to open new offices, hire new producers, or to invest in expanding the capabilities of the organization in order to allow the firm to write more business or to write certain segments of business more effectively. Several of the firms reported that sales success had come from targeted marketing and finding ways to gain a competitive advantage in niches or in specialty programs. Others reported concerted efforts to get referrals from existing customers and centers of influence. Still others have reported efforts and some levels of success in using the

“One of the biggest assets we have is an ownership situation that allows us to invest money back into the business on an ongoing basis. We retain at least 10% of our revenues each year to maintain a strong balance sheet and facilitate acquisitions that are appropriate.” “As the President of this organization, the most important role that I fill is in the establishment of the budget, the monitoring and review of the budget and making certain that we accomplish the budget.” “We have found that we can accomplish whatever it is we give our full attention to. Based on the importance of financial management, it gets a lot of attention.” “Being a sales organization is not a part of what we are about, it is what we are about.” “We don’t give goals and objectives to our producers. They are actively involved in setting the goals and objectives and take a great deal of ownership once they’re set.” “To be successful in sales we not only have to work harder than other people, but we also have to work smarter.”

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