The Real Reason Your Business Isn't Growing
I always ask my small business clients the same question. If you’re trying to grow your business, why aren’t you spending every free hour you have on outreach to new prospects? It’s a very simple question and the vast majority of them can’t give me a good answer. Here’s a typical answer:
I’ve been meaning to work on growing the business, but I just haven’t had the time.
Bullshit, I say. Bullshit.
Not actually, because I don’t think swearing at clients is good business. Instead, I dig deeper:
I completely get it, sometimes a business gets so busy that execution is more important than growth. But, just so I’m clear, if I brought in a new client today with an annual revenue of 100k, you would have to turn them away, right?
They look at me like I’m crazy. Of course they wouldn’t turn down a new client! The truth is it’s almost never about time. It’s about perceived return on investment. If someone tells you that you’ll have a new client worth 100K and you had to reach out to 100 companies to get it, you’d do it in a week. But, you don’t make the effort because you don’t have the guarantee that you will see results.
The opportunity cost of not proactively pursuing new business through outreach is costing you an unbelievable amount of money.
Do you know how bad you have to be at outreach for it not to be worthwhile for your B2B business? Absolutely terrible. Way worse than any of you reading this. Let me take you through an exercise I do with my clients called the outreach ROI equation (if you have a better name I’m all ears). It’s simple, but usually an a-ha moment.
First, I have my client quote a fair hourly rate for their time. Somewhere around $200 per hour depending on industry.
Fair Hourly Rate = $200
Then, we take the average annual revenue of a new client. 100K is average for most B2Bs, so let’s use that.
Average Value Of A New Client =100K
Here’s the equation:
(Average Value Of A New Client/Fair Hourly Rate) = Break Even Point
Or for our example:
($100k value of a new client/$200 per hour for your time) = 500 hours you’d need to spend doing outreach without gaining a client to be losing money.
Let’s be conservative and say you can do six outreach emails per hour. At 500 hours, you would need to reach out to 3,000 prospects without making a single sale for the outreach effort to lose you money.
You could draw a smiley face with your number on a napkin and get a sale if you reached out to 3,000 qualified prospects. So why aren’t you dedicating time to outreach right now?
Either you’ve already stopped reading and are sending out emails (in which case, godspeed) or, more likely, you don’t know where to start. Don’t feel bad! You’re not supposed to know where to start. You’re an expert in your craft and your industry, not the sales process.
But, that’s not an excuse for inaction. You are more than capable of learning how to grow your business. If you want to learn more about how to do that and build an outbound process to follow, you need to take steps to make that happen. Hire a VP of sales to put together a strategy, work with The Clean Sell to put a strategy in place, hire another consultant, read 1,000 books and become better than all of us. I don’t care what you do, but you need to do something. Every minute you spend ignoring outbound sales is costing you money.