12/1/2016 SMALL BUT T MI MIGHTY Web ebinar Ser eries Part 1: Getting Started - Your Mission, Value and Differentiators - July 20 th , 2016 Part 2: Getting Customers- December 7 th , 2016 Upcoming - Part 3: Getting Help – Lean Recruitment – January 11 th , 2017 Upcoming - Part 4: Get Growing – March 8 th , 2017 Getting Customers Gary Romano Over erview Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline 1
12/1/2016 Some key points to remember… • Sales vs. marketing • Time to conversion • Customer vs. consumer Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline Poll #1: Do you have a logo? 2
12/1/2016 Basic Branding – Logo Design & Business Cards Self Design • Graphicsprings Graphic Artist • More Crowd Design • 99Designs expensive than • Inexpensive • Reasonably self-design priced • Opportunity to • Opportunity to talk through engage peers the ideas you and clients want to convey Get Getting the he Wor ord Out ut - Com ompany Bio • Who you are? • Put it on paper! • What you do? • Attach it to every • Who you have proposal done it for? Bio Example Who you are? Gary Romano , President and CEO of Civitas Strategies will lead the team. With What you do? more than 15 years of management and consulting experience, Gary has the expertise and skills to help public serving organizations move from vision to What value do you implementation. He treats clients as true partners by establishing realistic How are you different from generate? strategies that connect to communities’ needs and strengths. other firms? Gary has consulted with a wide array of organizations including: the W.K. Kellogg Who you’ve done it for? Foundation, The Annie E. Casey Foundation, Take Stock in Children, The University of Florida Lastinger Center for Learning, and SmartStart Georgia. Gary has also been a line manager in science and engineering firms, (the Battelle Memorial Instituteand Shaw Environmental & Infrastructure) and WestCare, Inc., a regional substance abuse prevention and treatment agency. Gary has lectured on human services project management at Boston College and the future of early childhood education at the W.K. Kellogg Foundation. Gary is an active member of The American Evaluation Association, the Alliance for Nonprofit Management, BoardSource, and the Association of Fundraising Professionals. 3
12/1/2016 Bas asic ic Credib ibil ilit ity - A A Web ebsite Ensure way Photographs Start with text (reproduce bio) to Contact and Images Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline Poll #2: When determining a market rate, most consultants in the nonprofit market typically make a guess that is… 4
12/1/2016 The BIG question… How much? What is the What should I “Goldilocks rate I should charge a client Rate” ~ not too use to estimate based on that high and not my costs for a rate? too low project? Overhead/Total Consulting Hours TOTAL Cos osti ting Your our Cos ost HOURLY COST Hourly Personnel Cost Step #1 - Calculate Your Total Overhead (costs that apply to the overall operation of your company, not just one project) (Estimate - $55,000) Professional Sales and Office Space Fess & Marketing Utilities ~ even the Equipment Consumables Development ~ travel to Business rent you may - electric, gas, ~ computers, ~ paper, ~ training, meet with Taxes pay yourself telephones, printers printer, ink conferences, clients, cost for your Internet association of materials home office memberships like brochures 5
12/1/2016 Step #2 – Calculate Your Billable Employee Hours 1,920 x 0.80 = (how many hours in total everyone on your 1,536 hours team will be actually consulting and billing) Principal Consultant 520 x 0.90 = 1,920 x 0.70 = You and your employee work 40 hours a week and 468 hours 1,344 hours get 3 weeks’ vacation and one -week sick leave per BILLABLE year. HOURS 52 weeks/year x 40 work hours/week = 2,080 hours 1,344 + 1,536 3 weeks/year x 40 work hours/week = 120 hours + 468 = 3,348 1 week sick days/year x 40 hours/week 2,080 hours – 120 hours – 40 hours = 1,920 potentially billable hours per principal and employee *Consultants are typically only occasionally engaged (e.g. 10 hours/week = 520 hours/year) **only 70% of your hours, 80% of your employees and 90% of consultants hours will be billable Step ep #3 – Calc alculate Your ur Hour urly Overhead TOTAL BILLABLE HOURS Office Space Business Principal = 1,344 hours Taxes Employee = 1,536 hours ÷ = Consultant = 468 hours Professional Fees & Utilities Development TOTAL = 3,348 hours Consumables Equipment TOTAL OVERHEAD ÷ TOTAL BILLABLE HOURS = HOURLY OVERHEAD COST Estimate - $55,000 Estimate – 3,348 Estimate - $16.43 Principals/Owners $80,000 Salary + $15,000 Benefits + $10,000 Net Profits = $105,000 BASE 1,344 Billable Hours = $78.13/hour Employees $65,000 Salary + $13,000 Benefits + $5,000 Taxes = $88,000 BASE Step ep #4 – 1,536 Billable Hours = $57.29/hour Calc alculate Contractor Your ur $40/hour x 10 hours/week x 52 weeks = $20,800 BASE Per ersonnel 468 Billable Hours = $44.44/hour Cost 6
12/1/2016 Step ep #5 – Crea eate Your ur Total Hourly ly Cost HOURLY COST FOR EACH PERSON HOURLY OVERHEAD COST HOURLY PERSONNEL COST $94.56 (Principal’s Hourly Cost) Principal - $16.43 + $78.13 (Principal) = $73.72 (Employee’s Hourly Cost) Employee - $16.43 + $57.29 (Employee) = $60.87 (Contractor’s Hourly Cost) Contractor - $16.43 + $44.44 (Contractor) = From Cost to Fee Demand FEE Competitors Reserve Funding Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline 7
12/1/2016 Identifying Your Fee Structures Hourly Agreement Pay-One-Price Value Pricing • Upper limit to • Agree to scope and • Fee is based on how signify a stop set fee much benefit is derived • Advantage-mitigates • Advantage-fewer risk surprises & chance • Disadvantage-hard to increase to quantify a direct • Disadvantage-client profitability cost savings in treats you like a nonprofit world ‘light switch’ • Disadvantage- possibility of ‘scope creep’ Es Estimating • With the hourly fee and fee structure, estimating will be relatively easy Create ‘packages’ for • Use average historical hours the most common to estimate how many hours activities which will each activity will take provide mini-models for estimating • No historical data – don’t hesitate to ask peers for help with this Unk nknowns, Unk nknowns • Contingency mitigates risks by building in a little extra time to address unforeseen activities • 0% - simple, short projects with clients I know well • 10% when I don’t know the client well or I think there could be a lot of risk 8
12/1/2016 Loss Leader Cutting Hours Avoi oid the he Thr hree Lowering Tem emptations Hourly Fee PROFIT LOSS Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline Poll #3: What is the number one capacity gap for startup and small consultancies? 9
12/1/2016 The The Fi First One Ones in n the he Doo Door • Greatest barrier to gaining momentum is getting your first few clients • Confidence of prospective clients is gained when they know someone else has engaged you • Ideally, I would try for at least five clients in the first six months How How to to Find nd Your our First t Clients ts Current employer who Person who you worked knows you want to serve for or with in the past Partner organization you others but also collaborated with that is from a different recognizes their need to organization engage you further Your first customers are people or organizations that already know you well Potential referral source has been created ~ a reference that paid clients Closeout meeting at end can call about of project your work Execute the project exactly as you would for a client (regular check- Give them a in’s and high - proposal (cost is quality reports) zero but scope is outlined) Cons onsidering a Pro o Bono ono Proje oject 10
12/1/2016 RE REMEMBE BER!!!! ~ ~ No No mat matter Loss Leader Cutting how hard ard it may may Hours be e to o gai ain Lowering momentum mom Hourly Fee don’t succumb to o the he Thr hree Tem emptations PROFIT LOSS Structuring and The Toolbox Pricing Estimating Projects Finding Your First Creating a Customer Customer Pipeline Poll #3: What is the typical conversion rate for nonprofit consultancies? 11
12/1/2016 How How Big g is the he Breadbox? Average Conversion Average Estimated Prospect Time to Rate Sale Revenue Target Conversion Past and Hittin ing the he present customers Bull’s -Eye Referrals Cold calls Organization/Prospective Customer Pemberton Method The Last Step How ow to The Next Step Slee eep Wel ell (due date & who has the action) at at Ni Night Estimate of Total Project Sale Current Stage Adjusted Sale (based on Current Stage) 12
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