Whether you are a large, medium or small A/E firm, creating a successful business model is fundamental to the long-term success of your organization. With 2019 quickly drawing to a close organizations are reviewing their business and business development strategies and making adjustments for the new year. A wise retired professional said, "Remember, marketing is just as important during a booming economy as in lean times." Guest Author Karen Compton, CPSM, Principal of A3KConsulting, LLC, shares her perspectives and challenges in the seller-doer model as a means to improve your successful business development. |
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"I need to find a business development person." I hear that statement often, and my answer often is "Are you sure?" The truth is most small firms (i.e., less that 50 in an engineering and architectural firm) do not benefit from a dedicated business development professional. The reason is two-fold. In a smaller firm, clients expect that business development/sales functions will be led by the principal. At that size, a key function of a firm ownership is getting new business. But, many firm owners dislike business development and would rather relegate it to someone else. Which brings me to my second point: it is often financially unfeasible to have a dedicated business development position in a small firm since it is often pure overhead.
In our industry, sales and commission structures don't work. Business development professionals play a role in "opening the door" to new clients, relationships and opportunities, but they are often not responsible for closing deals, nor are they responsible for the delivery of architecture or engineering solutions. As a result, to tie their compensation to such metrics is unreasonable and often unsuccessful. What is the option? Consider a Seller-Doer.
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A Seller-Doer is just that: an individual that both sells the work and it responsible for its delivery to the client. The individual is often a professional (i.e., architect, engineer, construction manager) responsible for identifying and developing new work and then performing some level of the work. He or she could be a Project Executive, Project Director or full design-delivery manager. In any case, a portion of their salary is billable back to the project(s) which they identify and secure. As a result, the impact to a firm's overhead rate may be as much as 50% less (depending upon the billability of the individual). Let's look at the numbers:
Assuming a salary of $100,000 a year plus benefits at 35%, $100,000 in proposal costs and overhead including computers and office space of $35,000, the total annual cost is $270,000. If we assume a 10% gross profit, the business development professional would need to secure $2.7M in new work just to cover their costs. A Seller-Doer (35% billable) reduces the amount of fee required to cover their costs by $945K.
Review your numbers and then decide: Seller, Seller-Doer or Do-It-Yourself. |
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Have you done the math as Karen has suggested? If you find you are either a "Seller-Doer" with staff or a Do-It-Yourselfer, it is essential to review all of your time stealing demands sabotaging potential billable hours. One easy time and money saving solution is outsourcing your credentials management. If you eliminate the labor cost and overhead expenses associated with time spent researching, documenting and reporting requirements, you will gain billable project hours. For more information about our individual professional credentials management services and/or corporate credentials compliance services visit
AECredentialing.com or call us at 913-608-7880.
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Facts, Fun, Quizzes and Quotes
"Sell the problem you solve, not the product you offer."
Quote By: Dave Schools, Writer
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Lexi@AECredentialing.com
913-608-7880
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Invitation
If you would like to submit a guest article for "The Credential", our editorial staff is preparing our 2020 editorial calendar. Please submit your (approximately 500 word) article for consideration to
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