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Mining Networking Gems From the Business Plan

Now that you’re clear on your goals, priorities, target audience, and SWOT, it’s time to talk about money.

Budgeting Time and Money

Successful business development takes either cash or a cash equivalent. A cash equivalent is what you use instead of cash. It could be time that you barter, but more often than not, it’s old-fashioned elbow grease. Business development requires time, and it also requires some money. If you have more time, you can save money. If you have less time, you can get the same work done by hiring help. One way or another, good business development is going to require investment.

I’ve heard business owners say that they had such a great location or product that they could “do business by accident.” And I’ve driven past their location when it went up for sale after they went out of business. Success happens because of hard work, strategy and, yes, a little optimized luck. It doesn’t happen by accident.

What do I mean by “optimized luck”? Optimized luck is what happens when you’ve done your homework, worked as hard as you can, and a great opportunity opens up in front of you. If you hadn’t prepared yourself, you wouldn’t be ready to make the most of the opportunity, or you might not even notice it. But you also didn’t just get lucky. You prepared and trained so that you’d recognize luck when it showed up and so you would be ready to maximize your big break. It’s definitely not “doing business by accident.”

Take another look at your prioritized goals/target audiences/ current business development actions. If you’ve made a table, add another column for “cost.” Write down what you think your current business development actions to reach that target audience and achieve that goal are costing you. The cost could be in time, or it could be in real money. It could be the cost of hiring someone to update your Website or design your brochure, or it could include printing, postage, advertising, or other fees. You could include membership dues for the groups you’ve joined to mingle with your target audience. Make the best estimates you can and then look at the results.

Here are a few questions to ask yourself:

~ How much are you currently spending for each goal?

~ Are you spending the most to achieve your top goal?

~ Where does your spending appear to be most productive in yielding results?

~ Is what you’re spending worth the potential new revenue that goal could provide?

~ Could you spend more if it would achieve your goal faster?

You may see some opportunities to make a few course corrections. If you are spending more to achieve your third priority than you are for your top priority, you’ve got a problem. If you’re spending more to achieve a goal with smaller revenue potential than for a goal with larger revenue potential, it’s time to reconsider. If you’re not spending anything, hoping to “do business by accident,” you’re on thin ice.

Online business development and networking becomes much more cost effective when it targets a highly defined audience. Your online networking efforts will also have more success when you know the habits of your audience well enough to provide information they want and need. By focusing, you’ll stop wasting time and money on networking efforts that aren’t reaching your ideal prospects or aren’t offering what your prospects need to encourage them to make a purchase. Your highly targeted, strategic online networking efforts will be more successful because they give your prospects what they want and need. You gain by converting more prospects into customers while spending time and money more effectively.

How Much Is Enough?

I’ve seen all kinds of estimates on how a business development budget should be. Usually, the estimate is just enough to cover the products or services the person doing the estimate wants to sell.

An industry standard that’s been around for a long time is 5 percent of revenue. The idea behind making your business development budget a percentage of your revenue is that business development, networking, and productivity enhancement costs are funds you are reinvesting into the company, and should be tied to how well the company is doing. In the real world, I’ve seen companies spend far less and far more than 5 percent and get results that met their definition of success. What matters most is that you spend your budget wisely.

A zero budget won’t keep you in business long, and it certainly won’t help you grow. If you truly have no cash, you’ll need to roll up your sleeves and put sweat equity to work. If this describes your situation, how many hours can you put into doing business development? Write it down, and put a dollar estimate of your hourly rate next to it. That’s what you’re really spending.

If you’re already spending money and you’re comfortable with that level of investment, make sure that you’ve prioritized your budget in line with your prioritized goals. Put the biggest chunk of money where you’ll get the best return or achieve the biggest goal. (This becomes a great way to say no without guilt to one of those “fabulous” business development opportunities a salesman presents to you.)

If you’re willing to invest more to achieve your goals faster, or because you know that growth requires more resources, then determine a dollar amount you can spend and divide it among your prioritized goals. Budgeting money doesn’t obligate you to spend it, but it does give you a tool to prioritize new opportunities, and it may free you to investigate options you might not have considered before you knew what was available to spend.

Remember that your efforts must be accounted for in your budget either in dollars or in time spent. As you budget your time to complete other projects, be sure to allow for your business development, productivity, and networking investment.

Setting a budget also creates one way to measure effectiveness. Over time, you’ll want to ask yourself whether a particular productivity or networking method is earning its keep. Knowing what you’ve budgeted for it compared to the value of how it contributes to achieving your goal comes in handy when you need to decide what to keep and what to change.

The “Irresistible Difference”

Before we leave the nitty-gritty of your business plan, there’s one item left we need to talk about, your “Irresistible Difference.”

You already know your Transformational Value. That’s how you address your prospect’s problem/pain/fear and overcome his ego/ money objection. Your Irresistible Difference is what draws a prospect to you and your company as opposed to your competitors. Your Irresistible Difference should tap directly into who your best prospect/customer is. It should fit that customer like their favorite pair of jeans, not only covering what’s necessary, but making them feel wonderful as well.

Go back to your best customer’s qualities. What can you provide in your service, package, or delivery that will meet their need as well as their unspoken desire? For some customers, convenience is king. For others, it’s value, or reliability, or exceptional knowledge. Not only will you gain some good insights into powerful ways to make a networking connection by looking for the Irresistible Difference, but you’ll also get some great ideas for where to find your best prospects and how to reach them.

For example, customers who prize value may join online communities dedicated to saving money. They could be great places for you to participate through chat, forum posts, and blogs because your audience is already there. A brand-conscious customer may place more than the usual value in being a member of professional and alumni associations and participating at a higher-than-average level. You might find those groups particularly useful to your business development strategy because they tap into qualities the prospect prizes.

Your Irresistible Difference demonstrates how well you understand the quality the prospect values through where you market (including your choice of online business development, social media, and PR), how you structure your product/service, how you deliver your product, and how you position your company in the marketplace.

As you become aware of the Irresistible Difference you offer to your different target audiences, make a note of it so you won’t forget to put its power to work for you.