Five Financial Levers

Five Financial Levers

The most effective way to control the growth trajectory of your business is to align five financial levers with your marketing, sales and service initiatives. The five financial levers are:

  1. Product & Service Mix
  2. Size of Sale
  3. Number of Sales
  4. Seasonality
  5. Cyclicality 

Let’s look at them in more detail.

1. Product & Service Mix

The first lever is your product and service mix. You have to determine whether your product mix will be narrow or broad. Some financial advisors, for example, are narrowly focused; offering risk management products and focusing on estate planning. Other financial advisors have a broad focus and position themselves as their clients’ primary resource for all financial decisions.

2. Size of Sale

The second lever, case size, is determined by the markets within which you work. A financial advisor who works with middle-income families will typically have a smaller case size than a financial advisor who works with high-net-worth clients.

3. Number of Sales

The number of sales is a function of your product mix. In other words, the broader your product mix, the more sales you will typically make.

4. Seasonality

There are two factors that determine seasonality, one external and the other internal. In retail, one of the busiest times of the year is Christmas. This is an example of external seasonality.

Internal seasonality is a consequence of decisions made by the management. If the majority of staff decide to take vacation in July and August, the business will likely suffer a reduction in revenue at that particular time of year.

5. Cyclicality

Markets tend to move in cycles. Financial markets experience expansions and recessions. Businesses go through cycles of boom and bust. For example, the automotive industry is susceptible to cyclicality. When the economy is doing well, sales of Porsches increase. When consumers are feeling the pinch, there is an increase in the sales of lower-priced hybrid cars that are more fuel-efficient.

The stock market and real estate market are other examples of cyclical markets.


When you gain mastery over the five financial levers, you are able to align your marketing, sales and service activities. A financial advisor serving the high net worth market will offer products and services consistent with the preferences of people in this market. Typically, the average case or account size will be larger and there will be fewer sales. A move to increase fee based income will eliminate or mitigate seasonality and cyclicality.

The five financial levers are at the heart of all the strategic and tactical decisions an entrepreneur makes with regard to growing the business. It is important to adopt the necessary mindset to realize the economic potential in your business.

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