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QUANTUM OF ECONOMIC BENEFIT
By Jerry Butler
Quantum of Economic Benefits = Economies of Scale + Strategic Advantage + Financial Synergy
This could be the most important formula you will have ever learned. This is how you can grow your business’s value. Think about the average advisor’s office – how much more business would you have to do before you needed more space, more employees, more computers, more telephones, more …. I am sure you get the point.
Think of this – rather than 3 or 4 advisors having one assistant each – why not have one licensed assistant processing trades, one marketing assistant booking appointments and managing your data base and one administrative assistant. Probably with those three assistants your office could handle not 3 or 4 producers but 5 or 6. That is Financial Synergy. What about advertising, bulk purchases, and promotions? All of these are more manageable split 4 or 5 ways. That is Economies of Scale. Finally, you can have product and concept specialists which is much more productive than everyone selling a little of
this and a little of that. This could be a major Strategic Advantage. This is a business model that can do business when you are not there – the goal of every businessman.
Plus you have a built in Continuation Plan, Successor Plan and a story of long term stability to tell all your clients. How many times have you been asked “how long are you going to be here?” even if you could answer a question with no real answer wouldn’t they feel better if you had a business model that would guarantee the firm would be around for a very long time. PLUS the larger the company the higher the multiples – merging will increase the value of all the businesses involved.
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