A business development plan is like a road map. It provides you with direction and becomes your guide as you move through the year(s). You begin by looking back in order to understand where you have been and what will be required to move forward. It would be considered a best practice to have one, to document it, and then review and monitor it on a regular basis.

It is so easy to get caught up in the day-to-day process of attending to your client’s needs. However in today’s competitive marketplace, a business owner should be proactive regarding matters related to the running and success of his or her business, placing an emphasis on planning for the future. This series of articles will focus specifically on business development best practices, starting with the development of a plan, then moving to the importance of focus and consistency, development of a referral network, and dedicated sales models that work.

TPAs with a focused business development plan, policy, and process successfully maintain and grow their business. So what does that really mean? And where do you start?

The first step to any good plan is to look back. Historical information will help you to determine what you have to do in the future based upon where you have been and are; what has worked, and more importantly, what has not worked. If you can go back at least three years it will be helpful…but five would be even better, considering the economic factors that have affected all businesses in the last three plus years. Developing a table to pull together the data for documentation will make it easier for comparison. Following is information you will want to gather:

• Number of proposals generated each year
• Number of new plans “sold” each year
• Number of plans “lost” each year
• Referral sources that have brought business to your firm each year and how much
• Referral sources that have business with you currently
• Referral sources that have business with you currently
• Referral sources that are no longer bringing in new business
• In what types of business development activities did you engage each year (seminars, proactive communications, face-to-face meetings with referral sources, involvement in the sales process, communications, etc.)

This data should help you to identify the types of activities that generated the most leads, which referral sources have been your best relationships, why you “sold” or lost more business in one year over the other, and to determine your firm’s close ratio. The next step is to establish your goal for the year. How much revenue would you like to generate from additional plan sales? From there, you can back into what will be required to attain that number. For example, if your goal is $250,000 in additional revenue and the average revenue per plan is $3,000, then you will need to add 83 new plans. Pretty simple, huh? The more difficult thing to figure out is what you have to do to add those 83 new plans. This is where your data comes in handy.

Determine your close ratio by dividing the number of proposals generated each year by the number of plans sold. Note that, unless you are involved in each sale, this number relies heavily on your referral sources closing for you, which is something we will address in a subsequent article. In any case, take that number and divide it into the number of plans you need to sell. So, in the above example, if your close ratio is 50 percent, 83 plans divided by .5 means you will need to generate 166 proposals to meet a revenue goal of $250,000.

You will then need to identify the types of activity that will successfully generate proposal requests based somewhat upon what you have experienced in the past. The key to success is consistency, which would require someone from your firm focusing on business development activities. This would include working closely with your existing referral sources, developing new referral sources, seminars, systematic communications, follow-up, and being involved in the sales process.

Once you have completed these steps, you will need to document your goals and then plan how to achieve these goals. This documentation will help you to stay on track. Establish quarterly milestones that build, keeping in mind that you are developing relationships initially that will become more fruitful as the year progresses. So, for example, your first quarter goal will be lower than the subsequent quarters’ goals, with the fourth quarter’s goal being the highest. A review of the plan on a quarterly basis will indicate whether or not you are on track.

In the next article, Part II of this best practices series, we will address focus and consistency and the establishment of a policy that you will be able to easily communicate to your existing and prospective referral sources. An effective policy will make your firm more successful, profitable, and respected.

LAURA S. MOSKWA CONSULTING
3000 Eagles Nest
Auburn, CA 95603
530.823.9007