When we hear explanations that are straight-forward and uncomplicated, often we move quickly to assume that doing them will be easy. When we find that it’s not, we become angry – even frustrated. This is compounded by the fact that we then feel worse for failing at something that initially looked effortless.

Let’s use weight loss as an example.

Think about losing weight. Losing weight can be boiled down the following formula: Expend more calories than you consume.

Simple.

Yet apparently anything but easy. Weight Watchers 2009 revenues alone were $1.5 billion with the entire US weight-loss market exceeding $55 billion.

While expending more calories than you consume (losing weight) might be simple to describe and understand, doing it successfully and safely is not easy.

When we assume we know the amount of effort required to reach a goal or objective based upon our ease of understanding, we can open ourselves up for disappointment. Ease of achievement is not necessarily correlated with ease of understanding. Simple is more of a cognitive response, still requiring a physical and emotional doing and result. Just because cognitively we can understand it, doesn’t mean physically make it a cake walk.

We often revert to breaking things down into smaller pieces, thinking that by making them more understandable, they will become easier to execute. Don’t be fooled and frustrated by this.

When you’re pursuing goals:

Understand that even when things sound simple i.e. picking up the phone and dialing, it is not necessarily so.

Don’t diminish your assumption of the effort needed to achieve the task just because it can be articulated briefly and with few words.

Don’t get discouraged by what sounds simple turning out to be difficult.

Instead,

Realize that the main thing is getting the task done.

See that because it’s not easy, most people will not carry through and complete the task properly.

Understand that by you doing so, you deepen conviction for what you’re doing and increase your chances to grow your business and deepen and develop as a person.

While the title, “Winning Isn’t Normal” is easy to say, it’s a lot tougher to do but definitely worth thinking about.

Obviously we could write and speak all day about what constitutes winning. It is subjective so let’s keep it simple and define it as succeeding at what you want to achieve.

The reality is that most people will not achieve their deepest desires before they die; winning and succeeding is indeed unusual.

People who succeed in life, who achieve their objectives and who truly triumph, do stuff that the majority of people won’t.

Whether it’s in business, sport, personal relationships, fitness -whatever the instance, people who set objectives and targets typically get what they want because they’ll push harder, strive longer, contend further than most. That’s usually all that separates them.

So why won’t more people do this?

Over the next several weeks, amongst other business-building ideas, we’ll look at this.

The first reason that so many people have dreams, New Year’s resolutions and desires, yet fail to reach them, is that they don’t count the initial cost after they have the vision of what it is they wish to achieve.

For instance, if you wish to get fit and lose weight, there is initial losses on several fronts.

To begin eating more correctly,maybe you’ll need to change some eating habits. You’ll need to plan meals better, drink more water and structure your day so your maximizing the effectiveness of your metabolism.

If you wish to get fit, you’ll need to do exercise. Therefore, you’ll need the correct gear, maybe a gym membership, and you’ll come away with sore muscles. It’ll cost you money, time, and effort.

You’ll be tired for the first few weeks as your body adjusts to your new routine. You’ll need to go to bed earlier, meaning that schedules will need to be altered.

While getting fitter, losing weight, getting healthier and living better has clear advantages, the reality is that the first step after the goal has been set is loss.

It’s the same with building a great practice. You might want 40 clients with the correct amount of assets and right attitude, but finsing them will take time, perseverance and sometimes frustration.

Moving from generating money transactionally, and embracing a fee-based model will take time and explaining to your clients. Some won’t get it. There maybe financial loss…initially.

Maybe to reach your objectives, you’re going to have to bring on some part-time admin help. This will take time to do the numbers to make sure fiscally it is a prudent move. You’ll have to spend time trying to find the person then train them in your system, explaining to them why and how you do what you do.

To move forward, there is a cost. Often people overlook this or underestimate it. Once you’ve set your pathway for what you intend to reach, anticipate the cost or sense of loss that may come about. Then, keeping your objectives front and center, continue taking those incremental steps toward your final destination.

-Paul

By doing this you take care of two key things:

1) You maximize your return from what you currently have. While it sounds more fun to head out and find new clients, it always costs less time and money to ensure the ones you presently have stay with you. By reviewing your current client list, you’ll see people who you can contact to set up appointments or reviews. By doing this, you can build your servicing platform, routine and habits.

2) By doing that, you not only maximize what you presently have, but also begin creating a system where you’ll maximize your return when you bring in new clients.

By looking internally first, you essentially kill 2 birds with 1 hit.

Mine your current client list. While I’m not a huge fan of the A, B & C client label approach, you must know where the bulk of your income is derived from, people to pay attention to and ensure they remain clients, and people who possibly take a lot of your time and provide little return back to you.

By having a better handle on this, you’ll sum up conversations you’re about to begin having with prospects and potential clients quickly, knowing exactly how bringing them on will look relative to your overall business mix.

Happy Hunting.

-Paul

From last week, you can see the numbers in our scenario are:

Goal: Within 4 years, to annually generate before expenses, $340,000
Independent adviser on 85% payout.
Charging 1% on assets managed

You’ll need to generate $400,000 to your grid. The company will take 15%, leaving your 85% payout at $340,000.

To achieve the above scenario, you need to be managing $40mm.

Over 4 years, that means you’re hunting $10mm each year.

Add ‘real people’ numbers:

3 $1mm clients ————— $3mm
4 $750k clients ————— $3mm
8 $500k clients ————— $4mm

That means you’re looking for 15 clients.

Sit back and look at those numbers.

15 people is all you’re looking for this year.

15 right, good people to make your clients.

15 AAA-rated people. Clients who have Assets & the right Attitude, and who will become Advocates for you.

If you get motivated by lists, print a piece of paper with 15 slots. Keep it in your draw or somewhere where you’ll see it easily and regularly. Make a master copy because you’re going to be using it 3 more times over the next 4 years.

Look at that number and how it breaks down.

By being as realistic as you can, you’ll relate to these numbers constantly. Some people would put down 10 clients with $1mm each to make it nice and neat. But a book of business isn’t quite that cut and dry, so be realistic about the potential mix of clients and asset values you’ll bring in.

Stay focused on your numbers. If a client brings in $680k, he counts as one of your 8 $500k people – not one of your 4 $750k people. The extra $180k is cream on the top and you can count it at the end of the year. That way you’ll still remain hungry and focused on getting your 4 $750k people.

Get excited about searching and finding your 15 people this year. They’re around, in need of talking with you, and they’ll want to tell you everything about their dreams and ambitions.

Have a great Thanksgiving week, and we’ll continue next week.

-Paul

Independent adviser on 85% payout.
Goal: Within 4 years, to annually generate before expenses, $340,000
Charging 1% on assets managed

You’ll need to generate $400,000 to your grid, the company will take 15%, leaving your 85% payout at $340,000.

If you’re looking to generate the above scenario, you need to be managing $40mm – it’s that simple.

Over 4 years, that means you’re hunting $10mm each year.

The next step is a combination of you deciding how many clients you’d like to work with and what their ideal asset level will be. This goes a little deeper than just doing numbers as it forces you to think about how you’ll structure your business and which type of client you’re looking for. For the purposes of this series, we’re assuming you want to be gathering assets by offering different planning and investment platforms for your clients. We’ll cover what those look like a little later in the series.

Once you’ve solved that issue, come back to the numbers.

Remember, you’re looking for $10mm in Year 1. $10mm at 1% is $100k – of which you’ll keep $85k. If your expenses are running at roughly 20%, you’ll keep $68,000 before taxes. Depending on your cost of living, etc, the first year might challenge you a little, but keep focused on what Year 2 and beyond will look like.

If you decide your sweet-spot are clients between $500k and $1mm – great. Now figure out what that looks like.

It might look like this:

3 $1mm clients ————— $3mm
4 $750k clients ————— $3mm
8 $500k clients ————— $4mm

That means you’re looking for 15 clients. That’s a little more than a new client each month and way less than 2 new people a month. Can you see and feel how achievable this is?

They’re out there needing to meet you. Who are those 15 people who will be blessed to work with you this year? If you get more than the 15 great people this year, and they’re the right people – fantastic. Obviously looking forward from here, you’ll build a practice of 60 or so ideal people. We’ll look at just what this might look like later on also.

By having a number of right people you’re pursuing rather than an asset level, you’ll become discerning as to who deserves to be working with you and who doesn’t.

By being specific about what you want to be generating in your practice, you can see clearly the number of clients you need and the respective number of assets each must have.

Next week, we’ll look at some different criteria for finding and selecting clients. Some people prefer a niche strategy, others prefer the AAA approach. We’ll look at each next week.

Happy Hunting.
-Paul

Often advisers aren’t as realistic and practical as they need to be so here’s an example of what thet can look like. Although things don’t happen as neatly as we’d like them to, you must begin from somewhere. It’s not as hard as what people think it is. Just because there are so many opinions available to listen to, doesn’t make building a successful practice a complex thing.

Scenario: Adviser who is increasing clients, but none too significant enough to skew the book.

Independent adviser on 85% payout.
Goal: Within 4 years, to annually generate before expenses, $340,000
Charging 1% on assets managed

Adviser needs to generate $400,000 to their grid, the company will take 15%, leaving their 85% payout at $340,000.

If you’re looking to generate the above scenario, you need to be managing $40mm - it’s that simple. There’ll be bits and pieces – maybe an insurance contract here, a transactional payment there, but by and large, lets get some larger guidepost numbers down first.

We’ll set a 4 year goal, a fixed date with which to reach that by – let’s say by December 31, 2014. Not 2014, not December 2014, but by December 31, 2014.

That means you need to bring in $10,000,000 in year 1.

Note: The more realistic you are with first year numbers, the easier you’ll survive. You’re covering overhead yourself, so I’ve factored this into the scenario somewhat. Obviously expenses will vary relative to location.

Next week we’ll look realistically at how that will be made up.

As you’ll see, with a realistic, focused, clinical approach to finding the right number of right clients, along with a great relational demeanor you develop, getting the money you need, clients you want and having time to do what you love, is closer than you think.

See you next week.
-Paul

It sounds great to talk about deep relationships, but you can have 5 awesome relationships and chances are, unless one of them is Warren Buffet or someone of his bank balance ilk, you’re going to starve to death. You have to know the ‘X’ number of people you need at that particular asset value, then go relentlessly hunting, find them and bag them.

There’s nothing wrong with getting clinical. In fact, by getting clinical about exactly what you need, you’ll more quickly set up strategies to then find the people you wish to work with.

If you intend to charge 1% on AUM, and are on an 85% payout structure, you’ll gross (without office, admin. and other operating costs being removed) $8,500 for every $1mm client you find – $4,250 for every $500K client.
If you want to make $85K annually, you’ll need to find 10 of these people if you average $1mm each time – 20 of these people if you average $500K.

If you want to be generating $340K in 4 years, you’ll need to find 40 people who have $1mm, or 80 people who have $500K.
You could find 10 or 20 per year for the next 4 years straight and there’s your $340K!!

Not bad.

Whether you need 40 or 80 clients, who gives a rip – once you’ve got them, there’s you’re $340k. That’s pretty good and I say worth shooting for.

Yes, first you must know why you want what you want. But after that, once you have your dream TARGET goal locked in your mind, go and get it.

It’s that easy…well actually, the next steps take some effort, but they’re worth it.

Stay tuned to learn them.

I remember trying to rest on my bed that day 4 hours before I was due to swim the final. I couldn’t help but think of all the weights I’d done, the thousands of miles I’d swum and how ready I was for this day. I had a feeling of excitement that continued to build but then somehow mysteriously began morphing into fear!

The thought of having 13 years wrapped up in this pursuit, along with the hundreds of thousands of dollars my parents had paid over the years, not to mention all the time my family and coach had invested in me, suddenly seemed daunting, bordering on frightening. All of a sudden, there seemed a lot to lose. Not to mention the fact that I’d be swimming against the fastest guy in the world, and six other swimmers who were also just as intent on taking home only 3 medals between us. Talk about nerves!

Those feelings come along when it does appear like there is a lot to lose. But there’s only a lot to lose because there’s a lot to gain.

Several weeks ago I was speaking with an adviser I coach who has been working extremely hard. Through his diligence, he now had 7 clients and prospects that he was looking to close big deals with and he was feeling a little vulnerable. There was a lot of potential and what if he missed?

Those feelings are normal. Don’t let them stop you and make you shrink back. True, the pressure is not always fun and there’s no way to guarantee you’ll land every deal. That’s why the focus is on generating the opportunities where you’ve earned the right to expect success every time you have an “at bat.” While you might not hit it all the time, the more you line up to swing, the greater your chances of reaching success faster become.

He went on to do great and you will too if you keep focused on the potential ‘upside’ and learn to take the ‘downside’ in stride.

Keep going!
Paul

While hating to lose might be just as strong an emotion, it shouldn’t be the dominant thought. There are typically more ways to lose than to win, so by focusing on wanting to win, you have the greatest potential outcome by making that your leading and dominant desire.

Hating to lose might feel like a common default, one just as effective as loving to win, but don’t rush there. The mind thinks more clearly when it’s in a happily expectant state relative to the most desired outcome than it does when it’s in a state of preservation (I’d love to win vs. I must not lose.) I swum with guys who were more afraid of losing than winning. This had them focusing more on other people than themselves. By so doing, even when you’ve beaten people, you haven’t necessarily done your best. While you might beat a fellow competitor, what if they had a bad day? What if they had a great day, but you had the capacity to perform even better than you did, yet tied your result to their result?

See why this is to be avoided?

In sales or sports, this can quickly lead to people thinking they have a ‘B’ game. This is obviously a huge mistake. If you build a habit that doesn’t bring out the best in you simply because you were more focused on avoiding losing than aspiring to win, you can soon get sloppy, complacent and ultimately reckless.

When I’m speaking to audiences, I tell them that I’ve never gone into a race wanting to beat anyone; I couldn’t control the other competitors or what they did. But I also never went into a race wanting anything less than to win. Winning and beating people are two different things; it’s a subtle but important difference that often times people miss.

Don’t predicate your performance on others.

-Paul

Basically the African runners, who have been winning bucket-loads more events than anyone else, not just over the US runners, enjoy the race and don’t get caught up in the endless pursuit of trying to find what works and what doesn’t. They know the objective of any race is to win, and they seem to be doing that pretty effectively.

While they learn from the process, they don’t let the search for the ideal training conditions rob them of their passion to run, nor hinder them from doing what they set out to do. They especially don’t let the quest to run faster prevent them from doing the one thing that will probably guarantee them of greater results – tough, focused, training and racing.

It made me think of the financial services industry and building a business. Advisers can spend more time trying to find the allusive ‘magic bullet’ in order to minimize the amount of work needed to be done to ensure success, instead of learning how to enjoy doing the work, and doing it! There’s a fine line between wise problem-solving and simple work avoidance under the guise of continual efficiency-hunting.

True, you want to ensure you’re doing the right stuff, but you also actually need to do the stuff and try and perfect it first. Only then will you really know what works best for you and what doesn’t.

People are too much about work minimization than practice, practice, practice. While you don’t want to practice mistakes, you do need to spend time repeating over and over and over again, the activities that will ultimately lead you to achieving great results.

Happy Hunting.