Business Development as a Solopreneur (part 1)

A Live-or-Die Balancing Act

“It is as though I am constantly in a balancing act

I envy those that seemingly do not go through.”

from The Balancing Act by Andreas Simic

Most everyone in the fractional executive space is a solopreneur. They started their business independently and run it without the support of a co-founder or employees. They perform all duties related to their business alone. And in the case of a fractional executive, the two main items are business development and delivering the service.

The revenue-generating activity obviously is service delivery when the fractional executive is in a paid assignment with a client. Business Development is the sum of all activities to acquire those assignments.

The ratio between those two is a balancing act, one that does determine whether the solopreneur is successful and their practice survives. But is there an ideal ratio, an ideal amount of time to spend on Business Development? It is definitely not 100% or 0%, and it is subject to change over time.

If you start your fractional executive journey with past employers or business partners becoming your first clients, you might be tempted to ignore Business Development and focus entirely on service delivery. If, on the other hand, you started cold turkey, you might initially be spending 100% of your time on BizDev. Neither is ideal nor can it be maintained over time.

One of the ways to start determining your ideal ratio is to look at your desired income:

1.     You are looking to gross $300k a year while taking 4 weeks of vacation, and you charge $200/hour; you need to bill 31h per week to reach your income goal. That leaves roughly 20% of your time for Business Development.

You can do your math based on your numbers…

As a solopreneur, having the business is easy (all it takes is a name, maybe a website, maybe an EIN), but it is not a business until you have actual clients, paying customers. And from a sales angle, it is a no-brainer to start with a pipeline of assignment opportunities. In my observation, most fractional executives do not have a pipeline. Their M.O. is to suddenly realize, “sh*t, two of my assignments run out next month, I need to fill 20 h a week quickly."

Is there a good way to actually have a pipeline in the fractional executive space? When lead times can be as little as two weeks, and you have just 5-10 slots to sell yourself over the course of a year? I used to think that there is no such thing as an actual pipeline in this space.

But, of course, there are other considerations: Not every opportunity has a two-week lead time; some are dragging out much longer as founders, owners, or CEOs are waiting for a trigger (such as funding). And sometimes they are flexible, maybe even adjusting to your availability. There are best practices in Business Development for a fractional executive that allow building a pipeline. I will share those in the second part of this article very soon.

Another way to start determining your ideal ratio between BizDev and delivery is to look at your lead generation efforts:

2.     You are looking to gross $300k a year while taking 4 weeks of vacation, you average $30k per assignment, you have a 10% lead conversion rate, and you invest an average of 120 minutes on each lead. That means you have to spend 4 hours or 10% of your time on Business Development.

Or you can use your last salary as a full-time employee as a starting point for the calculation:

3.     Your annual gross OTE was $300k. Now, as a solopreneur, you have sole responsibility for your benefits, so you are looking to gross $390k a year while taking 4 weeks of vacation, and you charge $250/hour, then you need to bill 33h per week to reach your income goal. That leaves roughly 18% of your time for Business Development.

You obviously need to do the math based on your own numbers. And back to the question at the beginning, is there an ideal ratio? In my opinion, the ideal is somewhere between 15 and 25% of your time or 6-10 hours per week. The key to success is cadence with regular activities every week, ideally every day (more on this in Part 2).

A large part of my ideal is based on countless conversations with Fractional Executives. One of them, Jeff Slater, a Fractional CMO, published his thoughts in a recent post:

“I invest about ten hours every week in my business development effort. It requires consistent diligence and is a never-ending activity. To assist me, I schedule it on my calendar, so I know I have a block of time committed to supporting my lead generation needs. Business development isn't a faucet you turn off and on at random intervals. BD is to my business what water, sunlight, and fertilizer are to gardening.”

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Jeff Slater – How To Manage Business Development and Stay Top of Mind

Photo by Anne Gosewehr