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Best Practices in Business Development

INTRODUCTION AIA Practice Management Knowledge Community continues a free Webinar series this month with an in-depth look at the dreaded five letter word--SALES. This webinar will explore Business Development Planning and best practices for measuring your firm’s success and will include...

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Focus Search - Pipeline 11 A3K Consulting  New markets  New regions  New client types  Financial  Staff  Sustainability  Technology 12 A3K Consulting B u s in e s s G o a ls S a le s BRIDGING THE GAP OBSTACLES 13 A3K Consulting  Sales  Services  Regions  Market Focus  Market Conditions  Alliances  Roles & Responsibilities  Tools  Conferences  Networking  Publishing 14 http://siteboat.com/wp-content/uploads/2008/09/348_business_plan_cartoon.jpg A3K Consulting Performance Metrics • Potential New Business • Used to forecast new business (sales) • Win/Loss Data • Used to assess aspects of your business development strategy • Business development costs • Used to monitor cost of business development dollars against wins 15 A3K Consulting General Leger Data • Labor: • Technical • Marketing/business development • Administration • Consultants • Expenses: • Reproduction • Binding • Mailing • Public/relations • Conferences 16 Sales Goal ∑PNB = PF * Pr PNB = Potential New Business PF = Potential Fee per Project Pr = Probability ∑ = Sum 17 Example Probability ◦ Prospect 5-10% ◦ Shortlist 20-25% ◦ Top contender 40-55% ◦ Awarded 75-80% ◦ NTP 90% PNB= $3,600,000 * 0.10 * 0.05= $18,000 (A/E) 18 Sales Pipeline Sp= R HR Sp = Sales in pipeline R = Revenue goal for year HR= Hit Rate Sp > PNB 19 BD Return on Investment ROI = NF- DL BDc NF= Net Fee DL= Direct Labor BDc= Business Development Costs 20 Hit Rates Must be calculated for: ◦ Wins ◦ Shortlist ◦ Short-list Lost ◦ Pass ◦ Lost HR=PrW TP PrW = Projects Won TP = Total Number of Pursuits 21 Analysis Cause ◦ Examine proposal responsiveness ◦ Examine interview skills ◦ Evaluate entire strategy ◦ Examine go-no-go decision making Effect ◦ Shortlist ◦ Short-list Lost ◦ Lost ◦ Pass 22 Analysis BDc= Cbd Ts C bd= Cost of business development Ts = Total staff cost Sources: FMI PSMJ Resources Zweig White 23 Analysis BD Cost as % Net Revenue Mean 4-5% Median 3-4% Upper Quartile 5-6% Lower Quartile 2-4% Sources: FMI PSMJ Resources 24 Analysis BD Cost as % Gross Revenue Mean 1-2% Median 3-4% Upper Quartile 3-4% Lower Quartile 4-5% Sources: FMI PSMJ Resources MAP 25 A3K Consulting Questions (20) Open-ended questions 1


Library Entry
More Wisdom of the Ages: Business Development

AIA Practice Management Knowledge Community continues a free Webinar series with its continued in-depth look at the issues and challenges of business development. This webinar explores best practices for measuring your firm’s success and includes results from a survey conducted during...

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Focus Search - Learn how trends impact sales and marketing 3 A3K Consulting  Survey was open to all registrants  Questions in nine (9) areas  Performance Metrics  Budgeting  Go-No-Go Decision Making  Trends  Proposals  Business Development  Management  Leadership  Strategy 4 A3K Consulting  Highest responses  Performance Metrics  Go-No-Go Decision Making  Business Development  Trends  Strategy 5 A3K Consulting CALCULATIONS:  Sales Goals  Sales Pipeline  BD Return on Investment  Hit Rates As the Architect Turns…. 6 Sales Goal ∑PNB = PF * Pr PNB= Potential New Business PF = Potential Fee per Project Pr = Probability ∑= Sum 7 Example Probability ◦ Prospect 5-10% ◦ Shortlist 20-25% ◦ Top contender 40-55% ◦ Awarded 75-80% ◦ NTP 90% PNB= $3,600,000 * 0.10 * 0.05= $18,000 (A/E) 8 Sales Pipeline Sp= R HR Sp = Sales in pipeline R = Revenue goal for year HR= Hit Rate Sp > PNB 9 BD Return on Investment ROI = NF- DL BDc NF= Net Fee DL= Direct Labor BDc= Business Development Costs 10 Hit Rates Must be calculated for: ◦ Wins ◦ Shortlist ◦ Short-list Lost ◦ Pass ◦ Lost HR=PrW TP PrW = Projects Won TP = Total Number of Pursuits 11 Analysis Cause ◦ Examine proposal responsiveness ◦ Examine interview skills ◦ Evaluate entire strategy ◦ Examine go-no-go decision making Effect ◦ Shortlist ◦ Short-list Lost ◦ Lost ◦ Pass 12 A3K Consulting Business Development BEST PRACTICE:  Establish revenue goal  Define a sales pipeline  Assess your return on investment  Analyze your hit rate(s)  Adjust your process QUESTION(s): How do we keep this simple?