Lifecycle for business development [SMB Consulting Best Practices book excerpt]

Howdy folks – I am the author of the above title and each day I like to hold a virtual book reading. Today I am posting up a passage about business development life cycles.

Life Cycle for Developing Business

Another point to substantiate my initial claim about the lower barriers to entry in the SMB consulting field is the fact that you will enjoy a shorter sales cycle than other technology consultants. Whereas an enterprise-level technology consultant might spend well over a year consummating a seven-figure consulting engagement, your SMB consulting road is shorter. Granted, there is a business development cycle in SMB consulting, but it is shorter than other disciplines. And understand that at this juncture, your initial entry into SMB consulting, the business development cycle will be at its longest. I suggest that you plan for an initial business development cycle in the neighborhood of six months. Add another month to perform the work which you’ve won plus another month for the accounting billing cycle, and it’s possible that you can expect eight months to pass between making the initial contact and actually getting cash in your hand.

Why does the SMB business development cycle take six months or more? Don’t calls come in from clients desperately asking you to start working immediately? Sure, there are always spot or cash buyers in the market for SMB consulting services. However, not only are these clients the exception, but their panicked call, rife with overwrought urgency may be a good indicator of the type of client they will be. These are the “Class C” clients who are less loyal to their SMB consultant than the blue-chip or high-grade clients you should be cultivating. Many times, the spot buyer of your services has terminated another consultant, and you’re just the next victim being lined up for an unsuccessful engagement.

BEST PRACTICE: When you receive a distress call from a client urgently seeking your services, be sure to ask if there was a previ­ous consultant and, if so, what happened to that consultant. Re­member that the same can happen to you. For example, if the client speaks poorly of the former consultant, they could certainly speak so of you. Ask yourself if this is the type of client you want and if this is the type of client that will allow you to earn a profit in the long term.

Again, to make a major point in this chapter, the six-month business development cycle is where you start. Later on, when you have a track record, you can anticipate a sales cycle in the three- to four-month range in


SMB consulting. And be humble, for every client that retains you inside a three-month window, take a moment to reflect and count how many clients took years to win over. Need further humbling? Don’t forget to factor in those prospects you “wasted” time on and pursued for months and years who never became clients. Once you amortize these additional efforts into the business development cycle equation, the three-month+ time frame is a reasonable sales-planning horizon. You’ll be interested to know that I’ve confirmed this three-month+ business development cycle in other businesses. Ask an established accountant what the business development cycle is for a tax client. And for a different answer entirely, ask the new accountant what the time frame for landing that first client is (in this second case, the time frame will likely be six months or more). In professions such as commercial real estate leasing, it’s not at all uncommon to spend over a year working on a transaction. Of course these transactions come in at six and seven figures, and result in a worthwhile payoff for the realtor.

In Table 4-1 the business development dance that tends to occur between SMB consultant and client is portrayed.

Table 4-1
Sample Business Development Cycle

Time Frame

Status

Month One

Initial contact between SMB consultant and prospective cli­ent initiated. Follow-up communications, such as telephone calls and e-mail between parties. The SMB consulting court­ship has commenced.

Month Two

Follow-up meeting where SMB consultant learns more about technology needs.

Month Three

Dead zone with no immediate work. The prospective client gets busy running his business. Client doesn’t return your call or answer your e-mail because need isn’t there. Hang in there and continue client communications (your day will come!).


Month Four

Still no immediate need with client. But the prospective cli­ent, cleaning out old e-mails, finally replies to you and suggests another meeting. You delay your family vacation a few days to meet with this client. The meeting occurs.

Month Five

HP and other major hardware manufacturers release new lines of servers for SMB market. Your client sees news article about this and requests another meeting. This meeting results in your submitting a proposal for networking services. The pro­spective client reads proposal and exchanges e-mail with you to clarify points and lower overall costs. You revise the pro­posal several times.

Month Six

The prospective client approves your proposal and becomes a bona fide client. However, the signed SMB consulting con­tract contains several stipulations, including one noting that the work can’t start for 60 days because a new release of a narrow vertical market software application won’t be avail­able until that time.

 

The six-month business development cycle for the new SMB consultants is just for business development. The actual work may begin the next day or a couple of months hence. Needless to say, the initial business development cycle for SMB consultants can be surprisingly long and shouldn’t be underestimated (even though I’ve highlighted above and set your expectation that the SMB sales cycle is significantly shorter than at the enterprise level).

The sooner you accept the initial six-month business development cycle as a fact of life, the better. Not only will you start to manage your SMB consulting practice from a visionary point of view, where you’re thinking six months out as the time frame to make good things happen, but you may also become a higher-quality SMB consultant. Here is what I mean. Like a fine wine, clients improve with age. You typically don’t land blue-chip clients in a short business development cycle. In fact, it may take years to land that icon


of commerce and business in your market that every SMB consultant is seeking. Perhaps you’ll need to golf, sail, and ski for years with the business owner until you get a crack at the account, and even then you are allowed to bid only because the existing consultant finally lost interest and didn’t serve the client well.

And again, I’m focusing here on the six-month development cycle that faces a new SMB consultant. Later on, as you grow into an experienced SMB consultant, it’s a safe bet you’ll cut your business development time in half. Why, you ask? In part it’s because you’ll be more skilled at business development and the leads you get will be via referrals, a practice that dramatically shortens the sale cycle.

 

cheers…harrybbbb

Harry Brelsford, CEO at smb nation www.smbnation.com

Microsoft Small Business Specialist SBSC, MBA, MCSE, MCT, MCP, CNE, CLSE, CNP

PS – did u know I host a technology conference in the New York City area each spring? Save the date for March 6-8, 2009 and watch “voice meet data” in the SMB space!

PPS – my SBS 2008 book will be out in mid-November 2008!

PPPS – my Microsoft Response Point Primer book is here NOW!

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