One of our Agency Development team recently met with one of our agencies to work with him on business planning.  This is a great thing because without a plan it is virtually impossible to grow rapidly.  This particular agent is my favorite kind of guy.  He is a dreamer with big dreams!  He is ambitious, hard working and highly motivated!

In their discussions the agent and our Development Specialist talked about the agent's desire to hire producers and to build his own office building.  Both are potentially great ideas.  However, there is a small problem: money.  Our agent owner didn't have any...

When we start our businesses we entrepreneurs usually need every nickel we can find right?  Every dollar that isn't nailed down often finds its way into gasoline, rent or shoes for the kids.  This is normal.  But as the business begins to prosper there is a choice to be made: buy better stuff or feed the business.

We often see agencies with little or no working capital.  Without working capital you simply can't expand because you can't fund a producer.  What bank is going to lend you money on a building when you haven't got any?  None.  Those days are gone forever.

My partner and I started our agency in 1996.  We didn't take a profit out of the business - even to pay taxes - until 2003!  We were reinvesting our money in the business.  This is what you must do if you want to keep growing.  That doesn't mean you can't take money to improve your family's situation - you can.  Do that by increasing your salary over time.

But!  If you want to keep growing give the business a raise before you give yourself one.  Our method was to decide each year what the business was going to make in net profits.  Until that number was satisfied we didn't get paid and we didn't get a raise either.  This method allowed the business to have the money - its lifeblood - that it needed to keep expanding.

Look around at the successful people you know.  The businesses you admire.  Very few of them got where they are except by following this little principle - Pay The Business First!