It’s the first week of July – the midpoint of the year! If you’re the kind of business owner who likes to pause and take stock of where your company is at a given time – this is a pretty good time to do it. In my Rainmaking courses I talk to my participants a lot about accountability. If you don’t stop and periodically review key indicators in your firm like progress toward your sales goals for the year, the progress (and potential lagging points) of longer projects, your collection rate on receivables, and your rate per hour (or profitability of fixed fee projects, if applicable), then how will you know how to adjust in the next half of the year? This is particularly important for those in the businesses of selling services – like accountants, attorneys, and consultants. Your inventory is time. Are you on track with your inventory management?
Building a sales pipeline is one of the areas that truly does require regular review – much more frequently than just at the midpoint of the year, in my opinion. But, if you haven’t been regularly reviewing it or honestly even engaging with it, this is a good time to get re-energized. “The year is half over?” OR “The second half of the year is just beginning!” So much of what we do when we lead service businesses is to find ways to motivate ourselves every day to keep up the good work. That includes combining a positive mind-set with accountability.
So, what are some of the things we might consider measuring at this critical, mid-year point? Hopefully you have created a strategic plan. On paper! For those of you who created it in your minds…this may be a little harder, but don’t despair – you can do this too. And this will be a good opportunity to put it on paper, or into a spreadsheet.
Here are 3 things I recommend that service providers evaluate:
What are your sales goals for 2017? And where are you with respect to that number?
The sales goal is projected revenue; it is the amount represented by signed engagement letters or contracts, or projects truly already in the revenue pipeline. Ideally, at the beginning of the year you would have projected by month or at least by quarter, how much revenue you’d earn throughout the year. Many businesses are cyclical, so this may not be a ratable number. But take a moment to review your 6 month numbers. If your revenue does come in fairly ratably during the year, are you halfway there? If much of your revenue comes in by April 15 (in a traditional tax firm, this may be the case), does your remaining anticipated client work make up the difference? If not, regroup and re-evaluate what you’re doing (or not doing) to build your pipeline. Are you getting out there and networking face to face with your sphere of influence and people who refer you work? If you are a thought leader, are you presenting speaking engagements or writing articles that will allow you to touch many people? Are you blogging?
How many new clients did you want to land this year? Are you halfway there?
This benchmark is similar to revenue, and may just be a different way of looking at it. But many of us break down the revenue number into a formula. For example, if our stated revenue goal from new projects for the year is $100,000 and our typical project averages $5,000, we’d need to engage 20 new clients over the course of the year. If you haven’t landed 10 of those by June 30, you’ll want to evaluate why. Are you getting to the right people who can make the decision to hire you? Are you able to close the projects when you have an opportunity to get to the table? Or are you not even invited to propose? If the latter, a quick re-evaluation is necessary. I have a colleague in Provisors (thank you Sam Lee) who refers to these opportunities as “as bats”. Most people will not be able to close every proposed piece of business that comes their way. But, hopefully, you have a reasonably good hit rate on those at bats. Hopefully, you know your business, and you know what a successful batting average is for your industry. Be honest in your evaluation. If you sell higher end consulting, your batting average may be lower than someone who sells a cheaper product. But you can likely spend a little more time because you don’t need to close as many deals to hit your numbers. Do some math, and during the June 30 evaluation, be honest with yourself about why your batting average may not be as good as you hope. And if you needed 20 new customers to hit your revenue goal, make sure you are honest with yourself about what it will take to make up the difference in the next 6 months.
Did you want to increase your rate per hour, or your profitability per hour (which might be even more important!)
Hopefully one of your goals this year was to make money by working smarter, not necessarily by working harder. If so, it either means being more efficient with the time you spend on client projects or raising your rates. As consultants who are paid for our services (often by the hour), you might consider some different options. Do you have different rates per hour for different types of projects? Do you have a minimum revenue number per project to even take it on? People call me sometimes with “one off” questions. Back in the early days, I often used to give the answers away for free, thinking that I’d make the investment and then….someday….they’d grow and become a big client. Well, guess what? Not everyone will grow, not everyone will become a great client. And if I can provide a good service for an hour or two of my time, and get paid, why wouldn’t I? So, I have taken a different approach with potential clients who really just have a few questions. If I can truly provide a service that requires a little of my time, but delivers them incredible value, I will bill them. (We agree on this ahead of time, of course.) But I’m no longer shy about this being a two way street. A client who receives good advice for a fair rate will at the very least appreciate you, and will also likely refer you. So, don’t give away too much of yourself, whether to a prospect or an existing client. Regularly evaluate how much time you spend with prospects who may never become clients. Consider your business model and whether the hourly billing is serving you the best. Would a flat fee for specific projects be more beneficial for both you and your client? This mid-year break is a good time to re-evaluate and maybe try it out on your next engagement.
Get some help!
Finally, remember, you don’t have to do this “accountability thing” all by yourself. We can help with that. I’ll be offering my 3 part webinar series “Jumpstart Your Rainmaking” again in August. It’s geared toward professionals who are selling their services, AND need to build their pipeline. We’ll talk about tools and techniques to get you out there and get you motivated to achieve these goals. And we talk about how to stay accountable to yourself, so that when you again face an evaluation point – maybe September 30, or December 31 – you’ll find even more success.
Click here for more information about the webinar series and how we can be of service.
And congratulations on getting to the halfway mark. I’m excited to be here!
Monika Miles is President of Miles Consulting Group, a firm specializing in multi-state tax consulting for middle market businesses. Clients include technology, manufacturing, software and SaaS based companies doing businesses across state lines. Miles Consulting Group assists them in determining the sales tax and income tax ramifications of creating a taxable presence in a state and how to address these issues with the various states. When she’s not assisting clients with multi-state tax issues, she passionately shares Rainmaking strategies with other professional services firms. Click here for more information.