[IMGCAP(1)]How many of your clients hire controllers when they really need a CFO? While it may be less expensive, the pitfalls are plentiful: increased risk, inadequate financial reporting, and most likely, greater burden on your staff. It’s no different than hiring a telemarketer when you really need a sales professional. While the outlay will be less up front, the deliverables and results will likely miss expectations.
It’s unrealistic to think that you can make serious strides toward growth by bringing on someone making $15 an hour. Can a telemarketer work for your firm? Absolutely, but they often need direction, support, time and guidance to succeed and then, maybe, they will be able to secure a few appointments. The rest will be up to you to close the work and bring in the business.
If you’re truly serious about adding revenue to the top line and are ready to make an investment in your firm’s future, consider hiring a professional sales person. In addition to opening doors all over town using their established network, they are experts at getting to decision-makers, building relationships, uncovering needs, building value propositions and a package of solutions, bringing in technical talent when appropriate, managing the sales process, and even closing the work.
Not to mention, you can and should saddle your sales professional with a lofty revenue goal. When I hire sales professionals for my clients, I like to start the goal at $500,000 of new revenue a year.
Ready to buy yet? Wondering how much it will cost? Here are a few more items for your consideration:
• The search for the right person will take a while – don’t expect to have this person start tomorrow. • You should hire someone experienced in selling professional services and navigating a partnership.
• You should expect to wait at least six months for results, if not longer.
• You also should expect to only break even with your investment in the first year.
• You should also expect this person to drive a major culture shift within your firm and get people constantly thinking about new client development.
• Finally, you should expect to pay well for a proven producer.
A base salary of $80-130K or more for a proven producer is pretty standard. Then, the sales professional earns commission and bonuses based on what they bring in. With a revenue goal of $500K and assuming net profitability of 35 percent, they will pretty much have you at a break-even point at the end of the first year after you subtract their compensation, benefits, expenses and overhead.
However, with a blend of recurring and project work sold, you can expect years two and beyond to be very profitable for your firm. Also, the goals for the sales professional should increase, adding additional value to the equation. I’ve personally seen top producers bring in $3 million a year in revenue.
Finally, while average telemarketers and controllers are plentiful and available, good CFOs and professional sales people are not. Consider engaging a professional to assist you with your search. The fees you pay to them can be recouped quickly through reduction of trial-and-error, getting a good producer out on the street working for you more quickly, and driving revenue to your door.
The next time you’re thinking about how you’ll tackle your firms most significant growth challenges, just remember the advice you’d offer your client who is considering hiring a controller when they really need a CFO.
Art Kuesel, director of practice growth and marketing consulting services for Koltin Consulting Group, helps CPA firms across the country hone and maximize their growth plans, build effective marketing and sales efforts, coach partners and managers to greater success and add revenue to the top line. Koltin Consulting serves CPA, law and financial advisory firms with strategic growth, M&A services, executive recruiting and management consulting services. Art can be reached at 312-662-6010 or email@example.com.