2001 Best Practices Study

Analysis of Agencies with Revenues

Greater Than $10,000,000

INANCIAL

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

“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.”

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.

EVENUE

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.

“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.”

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

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