Episode 163: True Profitability

 

How close attention do you pay to your numbers? You cannot understand your true profitability if you don’t know your numbers.

In this episode, I am going to take you through some of our most profitable years, looking specifically at marketing, technology, and payroll numbers. Through reviewing how we were profitable you will be able to learn the key areas to look for within your own agency’s finances.  I also take you through the KPIs that you must be aware of all the time.

Key Takeaways:

  • Ensure you are monitoring your profit-loss statements at least once a month and that your reconciliations are completed each month
  • 20 to 30% range of gross income should be your net profit
  • Depending on your needs and strategy, an average of 11.5% of gross revenue is a respectable amount.
  • Don’t spend an exorbitant amount on technology, around 3% of your gross revenue
  • Payroll will always be your highest expense and on average around 35-40% of revenue, not including the CEO or owner’s compensation.
  • Monitor your online bank accounts so that you can fix anything that is off immediately
  • Know your number of enforce policies, always know those KPIs or have quick access to them
  • Time Premium Retention is not a good gauge of true growth and profitability
  • Do you know the top five sources of new business getting written within your agency?
  • Determine your revenue per employee.
  • Know your breakdown of commercial versus personal versus life and health insurance.

 

Until next time, get out there and make a difference, be unstoppable, and leave no regrets!

 

Mike Stromsoe
The Unstoppable Profit Producer
Call 800-770-9984
Email [email protected]

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