What financial goals do you have for your firm? More specifically, how much is your practice really capable of producing – and putting in your pocket – on an annual basis? Most attorneys have never really thought about this, but something as simple as having a concrete financial goal for your practice can do amazing things for your firm’s profitability.
So, take a few minutes to come up with a number… and, once you have it in mind, write it down.
Now that you’ve written down your annual goal, you can work on breaking it down further. The next step is to figure out how much revenue your practice needs to bring in on a daily basis to turn the number you’ve just written down into a reality.
Here’s how you do it:
- First, break the year into weeks. There are 52 weeks in a year, but you don’t want to be a slave to your practice, so give yourself four weeks of vacation. Plus, if your office is anything like most firms, things tend to grind to a halt around Christmas, so you’ll want to subtract another two weeks at the end of the year, bringing you to 46 working weeks.
- Next, break those 46 working weeks down into working days. If you worked seven days a week, that would be 322 working days, but I’m assuming you’ll want weekends and national holidays for yourself. There are 11 national holidays and 46 weekends (92 days) each year, leaving you about 219 working days.
- So, let’s assume the dream number you wrote down at the beginning of this exercise was $ 2 million. Divide that by 219 days, and your daily revenue number is $9,132. If your operating expenses run at 50% of gross, then this number puts $1 million in your pocket annually, before taxes.
Of course, everyone’s daily number will be different. Once you find yours, write it down and let your entire team know what the number is. Make sure they understand that, in order for your practice to be a success, this is the number that has to be brought in on a daily basis. And in a successful practice, team members get bonuses.
Keep track of the “number” on a daily basis. Come up with incentives for hitting goals on a daily, weekly, monthly, or quarterly basis and watch what happens. Once your team is in on the game, you’ll be amazed at how focused and efficient your practice will become.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd., Ste. 240
San Diego, CA 92124