Does this situation sound familiar?  

Bob just made a career change from a stable salaried job with plenty of work to an independent contractor status on straight commission.  

He sent me an email asking; 

• “How do you deal with all the ups and downs, handle the financial end when you don’t know what this month’s income is?”  
• Another question he had; “What about the size of the sale, should I just chase the big ones? But I feel I need to do some smaller sales too, which is better?”
• Then he asked; “How do I find a balance?”  

Would you say Bob is in a flux?

Or more like a pickle?

Can you relate? 

  Here is what I suggested to Bob:

• Understand the change you’re experiencing.  

Bob has gone from a known structure where someone else provided the schedule, gave him a known income and he had limited choices.

You’re in a self-directed situation where it really is up to you, with no guarantee of income and no one is going to come to your rescue.

If your working from your home (I have for 25 years) there are even more distractions from family and projects that have nothing to do with your sales.

You have all types of potential prospects from huge to little and in many different varieties and flavors.

You can make a fortune in commissions or you can be dead broke based on your choices.   

That last one is the million dollar one; your choices will make the difference . So let’s look at some of the choices and evaluate which would be better. 

1.)  The big fish or the little fish, which should I go after?  

      I talk to plenty of sales people and mangers and they often talk about the big deal they hope to land. Now I have no problem with going after the big fish, the commission check is fantastic! If you close a million dollar deal you make more money in one sale than most people live on in a year! 

     On the other hand I have a friend that is third in the nation for his company and rarely has a big deal! He does have plenty of smaller deals that close very quickly.

T hen comes the question; “Do I take all of them, work all of them and hope for the best?” 

I recently fired a potential client that is a division of a Fortune 500 Company.  

For 2 years I worked with an inside champion to get some development going with them. I met with the Executive of the division only to find him putting the decision football into a committee for the third time. I met with the committee heads and hit nothing but potholes and walls.  

Our proposal was around $300,000 and projected a potential savings of over $5,000,000 in operation costs. Just recently I talked with the division head and found the project was again put aside with no decision. My champion   indicated this was the normal culture of the company on just about everything. Even if we did get the project, what kind of “hassle factor” would I have in getting it implemented?  

Nice project, but the potential for closing was less than 30%, a waste of time.   

The point is that the quality of a potential client is more important than the quantity or size of the client. 

Bob needs to determine a way to qualify his potential sales based on quality versus size.    

What is the potential for closing that piece of business, 20%, 50%, 90% probability?  Which would you invest more time on? 

So rather than saying; “I do only sales over 100,000!” one should say; “I focus on the sales that have a better than 70% probability and drop anything under 50% probability.”   

Ok, so how do you determine this elusive thing called probability?  It’s called qualifying the prospect by asking the right questions up front and not being timid about it!  

If you’re going to invest your time, providing service prior to the finalizing of the sale, you deserve to know who you’re working with. These questions are going to have to be asked soon or later, so why not sooner! This is simply good time management.   

When looking at the big fish, one has to realize the complexities and influence issues that come into play. The longer a decision takes the more it will change from its first description. It may not even look like the same thing at the end. The more complex, the more it will change as well. Even the top executives do not always have full control.

Some suggestions Bob should consider in creating his qualifying matrix might be:  

•  How does this fit into my personal strengths?
• Does this take me away from my main focus or hit the bull’s eye?  
• Does this stretch my resources and put me in a potential short fall situation?
• If this takes longer than anticipated, how will it affect my goals and business vision?
• What will I have to pass up in order to get this piece of business?
• How does this fit my personal likes and dislikes?
• Does this feel right to me or do I get night sweats over it?
• What will be the actual return on invested time and effort compared to other sales?

There can be and should be others, this is to get you started. The point is that Bob should have high quality prospects in several ranges of value. The small ones pay the rent and keep the lights on while you work on the big ones. The key is to have your hopper full of “quality” projects, not just any project! After all you are the project manager!

The second point Bob needs to do for effective management of his business is; 

2.) Run it like a business! To do that Bob should have and do the following: 

• Have a Vision and Mission statement with related goals! This keeps you on track and helps you with your decision making. (Check our articles at www.BusArc.com for more on Vision/Mission)  
• Have specific plans and goals that cover your base costs and needs. If I can have a couple of half day workshops each month my base expenses are covered and I can put time into larger projects. If not, I may have a problem with the rent.  
• Have a financial management plan that keeps you within your means. The small sales keep the lights on; the big sales create your future.  

A formula I received from a successful business man that started with nothing and retired at 50 worth millions did the following with every dollar he ever made. 

• 10% went to charity or the church. (giving is a good thing)
• 10% went to cash for them to spend for fun (you need to enjoy life even on little income) 
• 10% went to savings or investment (an absolute if you are going to be wealthy) 
• 15% went for taxes and the government (they get it no matter what)
• 55% went for bills (live beneath your means, not above it)   

If they need more than 55% for bills they cut their life style back to make it work. (its called discipline)   

One very important question Bob and everyone should be asking: “What is the best use of my time right now?” 

It really all comes down to choice. If we are an independent agent like Bob or a salaried sales person, we still have choice.  

It is our choices that will determine our ultimate outcome! 

To summarize this,  

Congratulations Bob, it is your business! 

Make the business decisions that make sense, fit your Vision/Mission and goals.  

Roman was not built in a day and most business take time to build their base and foundation.  

With good choices and discipline the career of an independent agent can be extremely rewarding. 

For more on developing business skills that make a difference check out our web site at www.BusArc.com   www.BusArcOnLine.com www.HGoergerassoc.com  

Till next week, you make it the best day ever! 

Harlan Goerger