December 21st, 2016 David Finkel (Taxloopholes.com Advisor)
Don ran a successful engineering firm with revenues of roughly $1 million annually. But he had been stuck at this level for over a decade.
“David,” he said, “We go out and respond to RFPs and take past clients out to lunch to reconnect, which generates a ton of new business for us. But then we get so caught up in doing all that new client work that we don’t have time to keep this effort up. Six to nine months later we get through the press of the client work and we have to start all over going out and generating new business. It feels like history just repeats itself over and over again.”
What Don shares is such a common situation, especially for service businesses who need to balance their production work with their search for and scheduling of new business, that my business coaching company has a name for it – The Feast of Famine Cycle.
In a nutshell what the Feast or Famine Cycle is is the repeated pattern that service businesses get stuck in wherein they work diligently to secure new business, then having won that new business they have to stop doing their sales and marketing activities to fulfill on that work they just secured. But then they near completion of that work, they start to panic. “We don’t have any work in our funnel to replace that work with, and we’ve got overhead to cover and bills to pay.”
So they scramble to start up their business development efforts to generate more leads and close more business.
As a consequence of the repeated cycle they stay stuck:
So What’s the Solution
Hearing all of this, what’s the way out of this damaging cycle?
You must find a way to keep your business development activities going, at least to a baseline level, even as you are wrapped up focusing on doing the production work of your business.
By doing this, you level off the former drops in sales volume, which not only reduces your stress, but it allows you to make intelligent, rational decisions to bring on new production staff in a smart way. This can mean you hire more full time production people, or incrementally grow your capacity by tapping into full or part-time outside subcontractors (often as independent contractors) to shore up your spike in demand.
Let’s return to Don, our business coaching client.
Previously, Don was so caught up in doing the engineering services, keeping current on invoicing, and managing the quality and timeliness of the work of his few staff members, that he’d stop, sometimes for six months or longer, doing any business development work. He just didn’t have the attention or time to focus in on these activities.
And herein lies the seed of the solution.
Notice he didn’t have the time or attention, not that he didn’t want to keep some baseline level of sales and marketing efforts going.
So how could he establish a baseline level of business development activity that his firm could maintain, even when the bulk of his best energy was committed to getting great quality work out the door?
We helped him develop a minimum business development habit of still reaching out to two industry contacts every week, to set up a phone or lunch meeting, to see what projects they were working on that Dennis’s firm might be able to add value to. Further, we coached him to create a tracking spreadsheet of his roughly 300 industry contacts so that each week, rather than wondering who to call next, he simply worked down that list until he connected with his two prospects for that week.
He didn’t have to think about—he had a system (prospect list, sales strategy complete with rough script and desired next step, etc.) to follow. Plus, he made it a habit so that it became straightforward and took far less mental and emotional energy to maintain this pattern.
How about you in your business?
How can you systematize your baseline business development efforts so that you and your staff can keep some minimal level going, even in busy production periods?
How can you “evergreen” your marketing efforts so that you can use them (perhaps with minor tweaks or updates) again and again and again?
How can you spread the business development load to one or more team members so the pressure is not all on your shoulders?
How can you introduce simple marketing controls that help your business ensure that the right things are happening at the right time in the right way?
How can you automate more and more of your marketing so technology does the heavy lifting, not you?
So the next time you find yourself scrambling to generate more work, take 10 percent extra energy and systematize what you’re doing to get business so that you can maintain it even when you go into production mode.
This will not only help reduce your stress as you’ll have more consistent projects and revenues, but you’ll also be able to grow past any plateaus because you’ll have the confidence that you’ll have more work coming in the door behind this round of current projects.
If you enjoyed the ideas I shared, then I encourage you to download a free copy of my newest book, Build a Business, Not a Job. Click here for full details and to get your complimentary copy.