I’m going to place two bills on the ground. One bill has George Washington on the face. It is a One Dollar Bill. The other bill has Benjamin Franklin on the face. It is a One Hundred Dollar Bill. Which bill are you going to pick up? Are you going to pick up the One Dollar Bill or are you going to pick up the One Hundred Dollar Bill?
That’s an easy question, I’m going to pick up the One Hundred Dollar Bill. That seems like the logical choice. It is worth more. It will allow me to get more of the things I want with it. If I pick the One Dollar Bill, I could buy a candy bar. However, if I pick the One Hundred Dollar Bill, I could have a nice dinner with a friend at a fancy restaurant.
It’s easy to see when we put things in monetary terms that some choice are really simple. If I choose the One Hundred Dollar Bill, I will be better off than if I chose the One Dollar Bill.
Many people say they want the One Hundred Dollar Bill, however their actions betray their intentions. When it comes time to actually choose which bill to pick up they choose the One Dollar Bill instead of choosing the Hundred Dollar Bill.
Why would I say this? If we look at the way we use our time, many times we choose to do something that has less value. In business the most valuable activities a business owner can spend his time on is sales. After all the only reason to own a business is to make the owner money.There is an old adage, “Nothing happens until someone makes a sale.” If I don’t find someone who wants/needs the services or products I’m selling, then I will not make any money today. Increased sales fix a lot of issues in a business.
Let’s look at my sales. I have a service that has a average price of $5,000. When I do a sales presentation for this product, I have a 50% closing ration. This means that in order to sell that product I have to do two sales presentations. A typical sales presentation takes me one hour to complete. Prior to the sales presentation I spend an hour doing research and preparing for the presentation. This means it takes me four hours to close a $5,000 deal. The cost to do the work for the service I provide is $2,500 which gives me $2,500 profit on the sale. If I divide that $2,500 into the four hours I spent on my sales presentation, I have earned $625/hour for each hour spent on working on the presentation.
There is work that needs to be done before I get a qualified prospect for my sales presentation. I have to spend time and resources on lead generation. In order for me to find one qualified prospect, I need to meet with three people. Each meeting typically takes about an hour. In order to have two sales presentation to two qualified prospects, I spend three hours in meetings with them. The other activities I need to perform to get these meetings take about an hour to perform. I’ve spent a total of four hours in lead generation.
Four hours in lead generation and four hours in sales presentation means that for an investment of eight hours I generate a $5,000 sale that generates a $2,500 profit. For every hour I spend on lead generation and sales presentations, I earn $312.50.
If I am able to make $312,50/hour, why don’t I spend all my time on sales activities. Think about it for a moment. If I spent 40 hours a week in sales activities, I would earn $12,500 profit/week. That works out to $650,000 a year in profit. A pretty decent income.
I get caught in the day to day running of my business. There are activities I perform to make sure that my clients get what they have paid for. When I choose an activity that is not sales, I am picking up a One Dollar Bill. If I spent my time on sales, I am picking up the One Hundred Dollar Bill.