Following is a summary of an article by Larry Bildstein, CPA and CEO of The Whetstone Group in Marion, Iowa (www.thewhetstonegroup.com).

The cost of practice development time for partners is average partner income plus average partner expenses. Multiply that number by hours devoted to practice development. Determine a desired return, say 20 percent. Multiply the cost by one plus the desired return. Divide the result by the average profit (say 30 percent) as a percent of revenue. This is the amount of new business that must be generated.

Example for one partner:

Now partners can determine whether their practice development efforts are productive, and if not, they can create a plan to make them productive.

To make partners most productive, the firm needs a sales manager. This can be the managing partner, the practice development partner, or the niche department leader. The sales manager’s role is to motivate, teach, measure, and monitor. It is his or her job to help individual partners become productive. Some things to consider include:

• Don’t just network, but plan networking activities and follow up with people you meet at networking events.
• Think through your practice development activities. Example: a CPA sits on a hospital board with two other CPAs. They learn the hospital contracted with a new physician group that will be moving several new specialists to the community. Two CPAs go back to their offices and hope the phone will ring. The other arranges for the administrator to set up a meeting with the new group.
• The value of networking is not how many people you know, but how many close relationships you have. Your referral sources need to feel comfortable recommending you.
• The sales manager should help partners find activities with which they are comfortable. A partner who feels uncomfortable in selling situations might be well advised to find other ways to contribute—writing white papers, seminar content, articles for publication, etc.

From Inside Public Accounting, July 2006, p. 8. Hudson Sawyer Professional Services Marketing Inc. www.hudsonsawyer.com. Subscription $345 per year; back issues—nonsubscribers $35. 404-264-9977. [email protected].