Well, it's about time I finally published a more developed blog article and produced a more comprehensive podcast episode about sales efforts and tasks distributions.
These effort/task distributions have held true from 2014 when 321 Biz Dev first opened for business.
The white-collar small business owner has two major sales responsibilities to grow the business:
Efforts: identify prospects; set appointments with prospects; and close prospects.
Tasks: after prospects convert to clients, start and complete the work.
The effort component requires business owners to contact and prospect on a regular basis. Contacting & prospecting demands time, skill, and most important, desire.
Business owners are in a cache-22 situation when it comes to time. If time is spent contacting & prospecting, less time is spent working on legal matters, reviewing financial records, performing dental treatments, and installing Brazilian butts...licensed tasks for attorneys, CPAs, dentists and plastic surgeons, respectively.
Insurance and real estate professionals, as the chart shows, have plenty of time to perform the tasks (only 20% of the total sales activity) but have difficulty with contacting & prospecting
For all groups, the challenge is having no sales system knowledge and business development experience. The experience is nonexistent because colleges and state licensing authorities do not offer formal sales training to white-collar small business owners.
Even with the effort/task distribution, it is still remotely possible for white-collar small business owners to achieve new client objectives. But doing so requires about 1,000 to 1,600 hours or 6-to-9 months focus on sales systems and business development skill mastery.
During these 1,000 to 1,600 hours, the business owner would not perform any task to fulfill clients' orders.
The cost to get the training runs about $30,000 payable to a corporation specializing in training Fortune 500 sales executives. This cost is outside most small business owners' budgets.
Why does it take 1,000 to 1,600 hours or 6-to-9 months?
There is a learning curve in mastering sales systems and business development. And surprisingly, the learning curve is mostly psychological. The majority of small business owners will find it difficult to move through the psychological hurdles involved with contacting & prospecting.
Here's an example of a psychological hurdle.
The white-collar small business owner wants to generate $400,000 in revenue where the average transaction price is a market-rate of $10,000. Meaning, all competitors charge about $10,000 for the product or service.
Therefore, the business owner needs to close about 40 transactions to generate $400,000 in revenue.
But before 40 transactions are closed, the business owner may need to schedule 75 appointments. Before the 75 appointments, maybe 125 prospects had to be prequalified. Before the 125 prequalified prospects, maybe 250 people needed to be contacted for the first time.
The following effort/task distributions assume white-collar business owners are proficient in the Effort function and have moved through sales learning curves. Meaning, again, white-collar small business owners have spent 1,000 to 1,600 hours in business development activities only.
The attorney will spend 30% of his/her time finding clients and 70% of the time reviewing documents, preparing documents or meeting in court.
The CPA will spend 50% of his/her time finding clients and 50% of the time reviewing client financials and preparing financial statements.
The Dentist and Plastic Surgeon, at the most, will have 20% of their time to find new patients and spend 80% of the time treating patients.
Here's the interesting part. The Insurance Agent and the Real Estate Agent have lots of time for contacting and prospecting!
The psychological hurdle really comes into play for Insurance and Real Estate AgentseR These agents are uncertain about the contacting & prospecting function, so they are hesitant to use the great abundance of time they have to grow their businesses.
The psychological hurdle really comes into play for Insurance and Real Estate Agents because these white-collar small business have the most time to contact & prospect. These agents are uncertain about the contacting & prospecting function, so they are hesitant to use the great abundance of time they have to grow their businesses.
321 Biz Dev supports the Effort function for white-collar small business owners.
For attorneys, CPAs, dentists and plastic surgeons, 321 Biz Dev contacts, prospects and sets appointments...and works with business owners to improve closing skills. It's important to 321 Biz Dev that business owners are successful in closing appointments because we put a lot of effort in developing prospect relationships.
For Insurance Agents and Real Estate Agents, 321 Biz Dev focuses on sales systems. These business owners have plenty of time to contact and prospect but need help with goal setting and performing repeatable steps.
Both groups benefit from 321 Biz Dev sales systems training by honing their skills to get zero-cost referrals. New clients who enjoy the experience from contacting to closing are most likely to refer their friends, family and colleagues to your practice.
I hope this information is helpful.
Thanks for reading this article and listening to the podcast episode.
Clarence "Rick" Nappier, CEO
321 Biz Dev LLC