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Strategic Planning for Business Excellence
Retreat to Victory
Beyond Benchmarking
Employee Surveys
Models of Profitability
Producers as Profit Centers
Performance-Best Compensation
Call for Accountability
Transformation On Call
Models of Profitability

Profit = Income - Expenses.

It’s how business owners measure success. The bottom line. Where we want to start and finish in any business. It’s a straightforward equation.

Want to improve profitability? It’s a straightforward solution. Increase income, reduce expenses or both. But as every agency owner knows, it’s not always as easy as it sounds. Analyzing where your profit comes from, (and where it goes) will give you greater insight into business strengths and weakness, and how to improve it.

Transformation Advisors, Inc., has developed a set of profit analysis tools to help you look at your results from an entirely different perspective—or several different perspectives.
Pre-tax profit is just the beginning.

Look at the profitability of each department, cost center or line of business and understand the contribution each one makes to overall agency profitability. Each department should be able to stand on its own. If not, why not? And what should you do about it?

Look at producers as profit centers. Each producer should be generating a return on the investment made by the agency. That means producing more revenue than it costs to service and support the book of business. Information developed through this analysis becomes the basis for producer compensation planning.

Look at operating profit—excluding carrier contingent income—for a better picture of the agency’s ability to meet expenses out of operating income. Changes in the industry and the effects of fires and hurricanes make operating profit the real benchmark for any business.

Look at pro-forma pre- tax profit, for a better indication of return on investments, as it removes discretionary expenses – excess compensation, bonuses, perks etc. – expenses that would not be paid if the business were owned by a third party managing the business. To understand agency value, start with pro-forma pre-tax profit.

And to avoid analysis paralysis, we'll provide "What If" scenarios to show the results of planned changes.

It’s a proven fact that what gets measured gets done. Industry averages can give you a place to start, but to see your opportunities for continued improvement you need to build your own benchmarks based on where you’ve been & where you want to go. Once you understand the economic drivers, you can focus your improvement activities to achieve the right results.

To take financial analysis to whole new level. To get a better handle on maximizing profitability. To create your agency’s standards of excellence...

Fill out our on-line form or call Transformation Advisors at (530) 295-1083.


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