Thursday, March 12, 2009

How much business do you want to generate from your networking?

One of the questions in a previous post, 'Developing a networking plan', was 'how much business are you looking to generate via word of mouth?'.

Here are some things you can look at to help calculate this;
1. Revenue Target for year:
(What is the amount of business you want to generate?)
2. Average Transaction size:
(What is your average deal size?)
3. Number of deals required (1/2) =
(Divide the amount of business by average deal size)
4. How many prospects do you need for a sale =
(What is your closing ratio?)
5. Total prospects needed (4 X 3) =
(Multiply the number of deals by the number of prospects)
6. How many referrals per prospect =
(Not every referral will be a prospect)
7. Referrals required (5 X 6) =
(Multiply the number of prospects with referrals)

Now for the really important part. The number of referrals you need is the amount you need to be generating first for other people in your network. This will give you a good idea of the amount of time you need to invest in your networking activity.

As I have said previously the best way to generate referrals is to give them first.

Good Networking!
Dave Clarke
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