I recently received an e-mail from a reader who did not specify what he did for a living but whose status, I am convinced, was that of a free agent. What is a free agent? In this context, a restricted free agent is someone who works for a company but acts very much independently to build his own business — like brokers, for example. He is restricted in the sense that he is loyal to the flag of his employer.
An unrestricted free agent is an entrepreneur who does everything on his own account and is dedicated to building everything from scratch. He is unrestricted in the sense that he flies his own flag.
The reader was inquiring about how he could best reap the fruit of his labor. Costs fall under two broad categories: personal and professional. If he so desires, the young professional can be wise about his professional spending pattern, especially when it entails acquiring clients.
The two categories are sometimes intertwined: one may not need a car in his personal life, but because he must travel to prospective clients’ residences and workplaces, then a car is a must. However, and for the most part, professional expenses are very much independent.
Show me the money
Independent of the type of work you do, the bottom line is that there is a bottom line to keep your eye on. You need to generate revenue to succeed. This is no mystery by any stretch of the imagination. What is also known by some, but not all, is that you must spend money to make money.
Follow the dollars
There is an expression in criminal investigations: “follow the money”. The idea is that if you wish to solve a criminal case, all you need to do is to follow the trail of money from the crime scene to get an accurate picture. The same can be applied in business.
You have to spend wisely to make money. After all, if you can match every dollar you have spent on lead generation and business development to every dollar you have earned in your life and come out in the black, then you should be writing this article.
Most of the advice in this article pertains to free agents. Employees with no ownership and set responsibilities should use their expense accounts as much as they can. It is part of the total compensation anyway. You can save the company a dollar here and there, but unless your compensation is pegged to fiscal discipline, saving a buck does not get noticed. Trust me.
Saying one must spend money to make money is especially true in sales positions, but while company salesmen pushing products usually have expense accounts to take advantage of, restricted and unrestricted free agents must usually incur such expenses themselves. If that million dollar portfolio looks alluring, just bear in mind that the owner of the portfolio has been accustomed to lunches, ballgame tickets and that nice widget for the office.
Sucks to be you
Before you know it, you are already behind the eight ball and your prospect is being wined and dined by your competitor.
What can you do?
The first thing: acknowledge that you must identify and leverage your strength(s). The fellow with a million to invest is accustomed to the best restaurants and nicest hotels, so unless you are a world-class cook and inherited a mansion, you will need to differentiate yourself with something truly unique.
I know this great little place
This advice applies when a prospective client is seeking to hire you for your services, and not those of your employer (the corporation). If they are interested in the corporate services and any employee will do, said employee would have an expense account and the prospective client would expect to get wined and dined, even if they claim otherwise.
But in the case where someone seeks your professional expertise, bypass the uber-hip restaurant for a quiet but quality restaurant that you and only you know about. Make sure that the owners know you and treat you, and your guest like kings. When your potential client sees that you know the meaning of value and substance instead of high bills and hype, he will beg you to take his money and use the same delicate touch and attention to detail regarding his nest egg.
Remember that if you live extravagantly in front of this client, he or she will have no choice but to assume that you are reckless with your, and ultimately their finances.
Not all prospects are equal
Another mistake many restricted and unrestricted free agents make is that they allocate equal resources to people who may become a client or will never become a client.
Unlike in dating when one’s interest level drops as the certainty of interest increases, one must not be greedy and shortsighted by taking a likely client for granted. Do not think that one must wine and dine only those who are sitting on the fence.
If you know that someone you have been pitching to is going to a client guaranteed, then invite them out for a drink or even a nice meal to get better acquainted. In this event, he will see that you value him dearly as a client and a friend.
Yes, it is true that you shouldn’t mix business with friendship, but this shows that you will not take him for granted once the deal is sealed.
Now reel your client in…
Will they or won’t they?
If someone you are pitching to is sitting on the fence, then determine whether there is a real chance that they will become a client. Many people are interested in the power lunches, after work drinks and late night get-togethers, but they have very little intention of becoming your client.
Don’t spend too much time and resources on leads that will never become clients because they will only take you for granted and place less value on you, your expertise and your time. Think about it; if they see that you will take all the time in the world to pitch to them, yet they are not interested in the least, will they think that you are very busy and interested? Maybe, but they will likely value your contribution poorly as they did not need to fight for you.
When should you go out, spend like crazy and even, dare I say, show off in front of a prospective client? Only when you want to do it. In this case, it will be “money well spent” and not “money well spent if and only this person becomes a client.” Do not do it to close X’s account or get Y’s attention.
It’s sad but true, but if free agents must spend to get someone else’s business, then things will not work in the end. It is like going out with a girl thanks to your wallet it will not work.
This is essentially similar to paying for a date and expecting something in return: you will be disappointed in the first place and labeled a caveman as well. In business, the prospective client will label you a showoff as he probably had to work hard to earn his money, and you’ll end up losing the account altogether.
Ash Karbasfrooshan is also the author of Course To Success, available at www.CourseToSuccess.com.