Supernova Advisor Teams

Chapter 10The Key Drivers of Your Business, Forecasting Growth, and Building Your Business Plan

“Always have a plan, and believe in it. Nothing happens by accident.”

—Chuck Knox

Here is an outline of the important key drivers of your business. We will discuss each one in detail following the list:

1. Assets generate recurring fee revenues
   1. Transactional model versus fee‐based model
2. Return on assets (ROA) or velocity rate on those assets
   1. Total revenue divided by assets under management = ROA or velocity rate
   2. See Table 10.2
3. Number of households and household management
   1. Number of households that can effectively be serviced per team member
   2. See Table 10.3
4. Planning and doing the deep dive
   1. Doing more because you have more time to uncover opportunities or problems and develop solutions
5. Stair steps to the stars (continuous upgrading of clients you work with)
   1. You can't work with everyone; decide what channel the client belongs in
   2. See Table 10.2
6. Time and hours, billable hours
   1. 600,000 producer / 2,000 hours = 300 per hour
   2. 40% PAYOUT = $240,000 in actual compensation / 2,000 hours = $120 per hour
   3. See Table 10.4

A team will need assets that generate recurring fee revenues and, obviously, to create a predictable revenue stream. A transactional model doesn't allow a team to create predictable revenue streams. Based on market conditions and economic conditions, it is difficult to determine what the level of transactions might be for a client as a predictor of future revenues. So most teams ...