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A Numbers Game!
Three years ago, Paul left his corporate job to launch his freelance writing career, and he's done relatively well. He has a group of regular clients that keep him going, and they are happy with his work. When he first called me, he expressed concern over the sustainability of his business. "Even though I've got great relationships with my clients, and they send me enough assignments to keep my business going, I have this nagging fear of losing them. If I lost one or two at the same time, I would really be in trouble. I really don't like feeling this vulnerable. I don't feel like I'm in control of my own business." "Okay, let's say that happened," I prompted him. "How long would it take you to get each new client to take their place?" "I'm not sure," he stammered. "I don't really keep track of those things. I'm scared to even think about it." "But that's why we're working together. So you can look at these aspects of your business. So you'll be prepared for the unexpected. I know it can be scary, so let's look at it together." Paul and I continued to discuss this topic during our next four coaching calls. During that time, he plotted out his prospecting process, developed a system for tracking leads and prospects as they traveled through the system, and created a spreadsheet that showed him the status of each prospect at any given time. With these figures, he was able to calculate how many leads he needed to generate in order to meet his sales goals. As a result, he now feels much more in control of his business and knows exactly what he must do in order to ensure his business' survival. None of us can predict when a client will move, lose money they budgeted for our services, take our function in-house or choose another vendor, but we can prepare ourselves to respond to these types of things so they have the least amount of impact on the viability of our business. Do you know how many leads you have to generate in order to get a new client? 5? 10? 25? 50? Although industry guidelines may be available, what you really need to know is how many prospects YOU have to approach in order to get one new client. Knowing this number tells you what results you need to be getting from your marketing efforts and knowing that tells you whether or not your marketing efforts are sufficient to reach your annual sales goals. Let's say you want to increase your sales by $18,000 over the next 12 months, and you know that, on average, each client spends $1200/year with you. That means you have to bring on 15 new clients in the next 12 months ($18,000 divided by $1,200). Note that you'll need to go into more detail in order to calculate your own numbers since in this scenario the average client spends $1,200/year with you, but if you don't bring him/her on until 6 months from now, you'll only be making $600 in the 12 month period we're looking at. But let's run with what we've got for the purposes of this example. So you have to bring on 15 additional clients. If you also know that you have to generate 10 qualified prospects for every person that becomes a client, then you'll have to generate 150 additional prospects this year (15 clients * 10 qualified prospects). Therefore, in order to generate $18,000 more in sales you need to come up with some marketing methods that will generate 150 additional prospects above and beyond those you are currently generating. Although this is not an exact science, it does give you some numbers on which to focus in order to make your progress toward your goal more measurable. This measurability allows you to chart your progress throughout the year which, in turn, increases the likelihood that you'll reach your goals as you are able to make mid-course corrections. It worked for Paul, and it can work for you! So, now's the time to ask yourself -- are you filling your prospecting funnel? For the first three years of my web design business, I just took what came my way. I did what I thought would bring in business and waited for the results. I did very little analysis of the process, so I was never able to predict what activities I needed to do in order to get my desired results. A few years ago, a management consultant introduced me to the idea of the prospecting funnel. It's a way to track your prospecting process so you know how many prospects are in each stage at any given time. Over time, you are able to predict how many prospects you need to generate in order to produce one new client. This helps you set realistic sales goals, plan effective marketing efforts and budget sufficient marketing dollars. On a blank piece of paper, draw a large funnel taking up the whole page. To the right of the funnel, starting at the top, write the first step of your prospecting process (for example, first contact with prospect at networking meeting, cold call, web site query, etc.). Below that, leaving a little space between the two, write the second step of your prospecting process (for example, scheduling a meeting). Continue writing the subsequent steps of your prospecting process, one below the other, until you reach the bottom of the funnel. The last step should be the one where the prospect becomes a client (for example, you receive the signed contract back with a deposit check). Now, go back to the top of the funnel and for each stage that you identified, write how many prospects you have who are currently at that stage. Write these figures inside the funnel. If you have room, you can write the names of the prospects that are at each stage. Now, you may want to create a spreadsheet that helps you track when the prospect entered your system, when they hit each stage and when they became a client. You can use the first column to write prospect names and other columns to write each prospecting step. Then, each row, reading from left to right, can show what date the prospect entered each stage of your prospecting process. Over time, you'll be able to come back to your spreadsheet to calculate the number of prospects it takes to generate one new client and the amount of time it takes, on average, to convert a new prospect into a customer. Once you've refined your prospecting system and funnel, you may want to create a giant version of the funnel on a flipchart where you can write each prospect's name on a sticky note and move them from one stage to the next. It can give you a great visual of your current prospecting status and show you what areas need your attention. About The Author Kimberly Stevens is the author of the ebook series, *The Profitable Business Owner: A Step-by-Step System for Starting & Running a Successful Service Business*. Download Sample Chapters & get her free MiniCourse, *The 10 Most Common Mistakes Business Owners Make & How To Avoid Them* at: http://www.askthebizcoach.com/ebooks.htm
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Business Management Great Advice It never ceases to amaze me that every time I give a speech, do a seminar, or talk with people one-on-one, I get inundated with questions seeking the almighty answers to all that ails them. However, when I press them to come up with an answer to their own situation, they usually respond by offering their own solution right back to me. Things Are Good Because I Say They Are The subject of positive self talk regarding our goals and dreams reminds me of the childhood story, The Velveteen Rabbit. The boy loves the toy so much that a magic fairy comes and turns the toy bunny into a real rabbit. She tells the bunny it has been loved so much that it has earned the right to be real. What Do You Have To Give? "Happiness is not a matter of good fortune or worldly possessions. It's a mental attitude. It comes from appreciating what we have, instead of being miserable about what we don't have. It's so simple-yet so hard for the human mind to comprehend." ~ Bits & Pieces Coaching Book Review: The Coach: Creating Partnerships for a Competitive Edge Leaders today have many challenges when it comes to guiding and influencing the performance of their team members. In the past, productivity and success depended on sheer muscle and sweat. Competition, technology and the desire of employees to be meaningfully involved in their work are powerful forces shaping the leader's destiny and future role. The need for service, quality, and effectiveness in organizations is stimulating a demand for employees who think, act, and feel like responsible partners in the enterprise. Now and in the future, reinvigorating employees, managers, and peers through coaching will be critical to the success of both leaders and business. More than ever, leaders need to inspire employees with contagious enthusiasm in order to deliver quality services and products. In CMOE's coaching book, "The Coach: Creating Partnerships for a Competitive Edge," it provides refreshing ideas and strategies to help leaders cope with the demands and challenges of their calling. Mentors and Coaches: How to Find a Great Mentor A career coach or mentor is a person who can guide you with the benefit of their experience. He or she may be someone more senior from within your organisation or someone external to your organisation who has been successful in the field or skills you want to develop. The right mentor can help you accelerate career, boost your self-development and improve your working relationships. And remember that a mentor is not only helpful in your career the benefits of having a mentor are relevant to all areas of your life whether fitness, financial or lifestyle. Mailey's Introspections [Monday, December 6th 2005] As I work with clients as their introspective Inner Peace/Relationship coach, an issue that has come to my awareness is the tendency we have as human beings to stray away from the present moment. Some people tend to live mostly in the past, some live in the future, while still others ricochet from future to past and back to the future again. How to Effectively Balance Your Work and Family Life What Is Your Definition of Success? 6 Practices for Achieving Excellent Self-Care Adults with Attention Deficit Disorder (ADD) often feel like they are running behind schedule, and just don't have the time get everything done. As a result, many ADDers end up sacrificing their own self-care in order to scratch off items on their to-do lists. Those who skimp on self-care, however, will find themselves slowed down in the end. It's nearly impossible to be an effective parent, spouse, friend, or worker when you are not operating at your best. And you can't be at your best when you are not taking care of yourself! How Stella (Laurie) Got Her Groove Back! Being a Life Strategy Coach doesn't mean I'm always on top of my game, completely balanced and without my own challenges. Building a website, writing an e-book, getting a newsletter off the ground and securing clients required a great deal of work and commitment. Solution-Focused Therapy Most types of psychotherapy involve exploring feelings, being validated, finding explanations, exploring wishes and dreams, setting goals, and gaining clarity. Every therapist has unique ways of working with clients, based on his or her personality, training, and views of how people change. A solution-focused therapist is likely to do the following: You Can Get There From Here But first you've got to raise your standards. Buyer Beware: Choose A Business Coach Carefully To Get The Results You Want Consider this scenario. A colleague suggests you get a business coach. Via the Internet, you find one close-by. The woman says she'd love to help. She charges $300 a month for two 30-minute calls. It seems like a good deal, so you eagerly sign on the dotted line. Training is Not the Same Thing as Exercising What it takes to GROW! Handling Disappointment Disappointment is an inevitable part of home-based business. Clients won't pay, bids fall through, or business associates don't come through on their promises or act unethically. Some people will deliberately foster cynicism in their consciousness as a way of avoiding the pain of disappointment. This is mistaken as a means of making life better. Disappointment is a temporary condition. Cynicism is a long term poisoning sickness. Neither is necessary; but until the addiction to cynicism is broken, the attraction of positive events in life is greatly inhibited. Thus there is a cycle of disappointment and cynicism. Let go of that negativity and let the good in. Becoming An Information Filter And A Knowledge Sponge As the title states, "Become an Information Filter and a Knowledge Sponge." On your daily journey to achieve your WHY, you will travel through many different avenues and sometimes you will ask yourself, "Why do I need to meet this person or experience this situation?" The key is to truly understand that you must become an information filter and use your personal God-given filters -- your eyes and your ears. I always say that you were born with 4 inputs (2 eyes, 2 ears) and 1 output (mouth). Why Daily Planning is So Important for Adults with ADD For adults with Attention Deficit Disorder (ADD), details are a drag. We tend to see the big picture and want to jump straight to the finish line, wishing we could skip all the steps in between. Unfortunately, this perspective often causes us to become overwhelmed when it's time to start a project. We know where we want to end up, but we don't know where to start. Key Questions for a Coaching Conversation There are 2 key skills that coaches need to be truly effective, the ability to listen (often for what is missing rather than what is said) and the ability to ask the right question at the right time. Leading Grief Groups: The Preliminaries Preparation: Keeping Your Anger Under Control In my work with individuals and couples, I see many people who have a difficult time expressing and managing angry feelings. Let's take a look at what causes people to become angry and how they can respond to stressful situations more productively. The Fastest Way to Ruin Yourself I don't know many people who would admit to wanting to ruin themselves, but there are a lot of people who are doing everything they can to accomplish that very goal. They certainly don't see it that way, but if you look at the way they live, you can see it happening.
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