Turn Your Job into a Business: Part 2
In my last blog article, I discussed the fact that most distributors don’t really own a business, but rather, they own a job. The test to determine if you own your own business is if you can fly to Hawaii for three months and tell someone else where to send your check.
The key words in the above sentence are “someone else.” In order to truly own a business, you need to find a way to make money from the efforts of others. Almost all people think this means they need to hire sales representatives. I discussed hiring sales reps in part one of this article.
In this article, I will discuss making money from the efforts of others without sales reps. Though this path may not be as obvious to most, it is the path I highly recommend distributors consider.
I call this second path of making money from the efforts of others without sales reps the “Account Manager Model.” The key to the Account Manager Model is that most distributors are the best sales rep they will every hire. Most distributors initially don’t think this is true. But over time, most distributor owners will realize that they themselves are the best sale rep they will ever hire.
Earning a new account and servicing that new account are separate jobs. The first job, earning a new account, is very sales-focused. The second job, servicing an account, is very service-focused.
However, most distributors treat these two separate jobs as one job, and significantly limit their opportunity by not learning to delegate servicing an account to someone else. If a distributor chooses to do both jobs themselves, they can typically only grow their business to about $400,000 to no more than $1 million in annual sales. However, if a distributor chooses to let an account manager service the accounts, that distributor can grow to several millions in annual sales. In fact, with the Account Manager Model, annual sales are virtually unlimited without needing to hire any sales reps.
The following are the advantages to an Account Manager Model:
- Someone else is managing the day-to-day servicing of your accounts, so you are making money from the efforts of others.
- Account managers do not get paid a high percent of the gross profit. Account managers are typically paid a salary with an opportunity for a bonus based on business growth.
- You, the owner, own the relationship with your customers, not the account manager.
Here are some recommendations for implementing an Account Manager Model:
- Practice delegating. Hire a customer service rep who will help you with your sourcing, pricing, order entry and order follow-up.
- Promote good customer service reps to become account managers.
- Slowly hand off accounts to your account managers.
- Make a list of all your customers and your sales with them. You will easily identify some smaller customers that you can “practice” turning over to a customer service rep to be the account manager.
- Remember, with larger customers, you still “own” the account, and should schedule timely account reviews with your customers.
Yes, with the Account Manager Model you can make money from the efforts of others without hiring sales reps.