Seller vs. Seller-Doer

“I need to find a business development person.” I hear that statement often, and my answer often is “Are you sure?” The truth is most small firms (i.e., less than 50 in an engineering and architectural firm) do not benefit from a dedicated business development professional. The reason is two-fold. In a smaller firm, clients expect that business development/sales functions will be led by the principal. At that size, a key function of firm ownership is getting new business. But, many firm owners dislike business development and would rather relegate it to someone else. Which brings me to my second point: it is often financially unfeasible to have a dedicated business development position in a small firm since it is often pure overhead.

In our industry, sales and commission structures don’t work. Business development professionals play a role in “opening the door” to new clients, relationships and opportunities, but they are often not responsible for closing deals, nor are they responsible for the delivery of architecture or engineering solutions. As a result, to tie their compensation to such metrics is unreasonable and often unsuccessful. What is the option? Consider a Seller-Doer.

A Seller-Doer is just that: an individual that both sells the work and is responsible for its delivery to the client. The individual is often a professional (i.e., architect, engineer, construction manager) responsible for identifying and developing new work and then performing some level of the work. He or she could be a Project Executive, Project Director or full design-delivery manager. In any case, a portion of their salary is billable back to the project(s) which they identify and secure. As a result, the impact to a firm’s overhead rate may be as much as 50% less (depending upon the billability of the individual). Let’s look at the numbers:

Assuming a salary of $100,000 a year plus benefits at 35%, $100,000 in proposal costs and overhead including computers and office space of $35,000, the total annual cost is $270,000. If we assume a 10% gross profit, the business development professional would need to secure $2.7M in new work just to cover their costs. A seller-doer (35% billable) reduces the amount of fee required to cover their costs by $945K.

Review your own numbers and then decide: seller, seller-doer or do-it-yourself.

Karen Compton, CPSM. Karen Compton is principal of A3K Consulting (Glendale, CA), a business development and strategic planning firm specializing in the architecture, engineering and construction industries. Ms. Compton is also the founder of Industry Speaks™, a web-based business-to-business portal that connects AEC firms with experienced consultants, provides peer reviews of consultants, reports on key industry trends, and publishes expert reviews of professional courses and books. Contact her at kcompton@a3kconsulting.com.