As I write this, I’m at a vendor meeting.  I won’t say who or even what kind, but it’s a company whose success requires financial advisors to sell product.

So far, all of the presentations have been excellent.  What I like most about this particular vendor is that they test everything they do.  If they give you an idea, it’s one that’s already been proven to work.  They are without a doubt my favorite vendor.

The meeting started great.

The opening speaker opened with something I’ve said myself many times:

“A lot of big producers I know have no money.”

He sites one advisor who brings in close to $2 million a year in revenue and barely clears enough to meet his personal expenses.  But, the guy is considered a “big hitter.”  A big hitter with no money in the bank.

“Oh man,” I think to myself.  “Finally…a vendor who understands that a financial advisory business is just like any other business.  It’s about creating profit and business owner wealth.”

Or so I thought.  He continued…

“You simply have to do more business.  I don’t care if you have to borrow the money.  You have to commit to bringing in $20 million of new money every year.”  

Oh, I was so hopeful.

Look, I get it.  The vendor needs advisors to sell.  The vendor’s profitability depends on it.  If you don’t keep selling, he goes out of business.   This is why he discusses setting sales goals rather than profit goals or net worth goals.

The vendor implies they are the same thing, but they are not.

You cannot simply spend and sell your way to profit.  There is a cost to growth, and that growth is not guaranteed.

The reason the big producer has no money is because he fails to understand his role as a business owner is NOT to hit a selling goal, but a profit goal.

We are not in an industry that attracts venture capital money.  Uber can blow through billions of investor money and not blink an eye.  They have myriad of investors giving them cash.

We have no hard assets from which we can obtain financing.  If you borrow money, it’s probably coming from Visa at double digit rates.the

The vendor attacks profit management as “thinking small.”  I even heard one call it “Linear Thinking.”

Linear growth at 10% means you double in 7 years.  If you’re bringing home $50,000 a year, then I agree that’s thinking small.  But what if you’re making $400,000 in profit?  Is doubling profit to $800,000 in 7 years “thinking small”, especially when it didn’t require you to take on debt or spending your savings to achieve it?

The graveyard is full of “big thinkers” who had no idea how to achieve their goals.  They lacked the structure and systems necessary to do it.

For a few, success can come overnight, but it will last only if they have the infrastructure to support it.

The future is murky for many vendors.  Eventual DOL rulings will make high fees and commissions a thing of the past.  Many will fold.  They push the sell, sell, sell message because it serves their best interest.

Growth is important.  But a successful business does it with a pre-established plan that includes a pre-established budget that is a percentage of incoming revenues and not with debt or the owner’s personal savings.

Yes, think big.  Yes, adopt a “can do” attitude.  But reach your goals NOT by taking blind risk.  Do it with a methodical plan that will get you there.