81. How to Identify Leads That Can't Afford Your Services

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Have you ever found a lead that wants to hire you as their fractional CFO and you're super excited to work with them? They're in the right industry, they're the right size, they have the right mindsets and values that are going to make them an amazing client, only to get on the sales call and find out that their revenues are a fraction of what they led you to believe, which means there's no way they're ever going to be able to afford your services. This is completely frustrating, but it's also completely avoidable. In this episode of the CFO Report, I'm talking to one of my inner circle members, Daniel Talbot, who ran into this exact situation at a recent networking event. What was the advice that I gave him so that he can make sure this never happens again? Let's dive in and find out.

I pulled back from online biz dev, started getting some traction local, in person. It's going well. When I was focusing on businesses that were sub a million, my screening questions about revenue were more to direct my conversation, less about actually screening them out of the call entirely. So I met a guy through bni. Super great. We had a. Had a call. I struggled to, like, avoid getting into the sales conversation in person, but did a good job, pushed him into a zoom call that we scheduled later in the day. Went through the whole sales call and then at the end found out that the revenue numbers he had shared with me were more aspirational than reality. Um, and like, he was like, ready to pay whatever, but when I told him the price, crazy sticker shock. Found out the truth about the revenue and it was just like it all fell apart. And after it felt so good for multiple conversations. So I'd love to know, how are you screening for your IPA in this, like, in person biz dev environment?

What was your revenue in 20 too?

That's it. Period?

Yeah, just ask them what it was last year. I've been in the same boat, right? Where it's like, we did 800,000 last year, but this year we're going to do 5 million, right? And so you only hear the 5 million part. You don't hear the reality part. And so I just started getting the habit of asking what their last year revenue was. People like, I'm not sure. I'm like, ballpark me within $200,000. You know, are we closer to 1 million last year or 5 million? Like, that's all I need to know. You know, I don't need to know if it was, you know, $2,836,925.18. I don't care. I just need to know that are you or below my minimum threshold and you can ask them that. Like at the BNI thing, when you're one on one, just say, hey, what did last year look like for you from, from a top line perspective?

You always so quickly point out where I made my mistake because he's like, yeah, last year I was by myself, I did 200. Now I partnered up with a buddy. We've got 10 reps selling for us now. So now we're going to do a million. But like their sales guys haven't closed anyway, so it's like, yeah, I can see it, but you're not there. So. Yeah, yeah, it's like I should have, I shouldn't have like gotten optimistic for him. I should have been practical. Like from last year.

You can do the follow on. I mean it's rare, it's super rare that anyone's going to go from, you know, low six figures or something to multimillion dollar. Look at the growth of TCA. We went from 250,000 last year and we've had ridiculous growth and we might do a million this year and that's pretty ridiculous. And so to take somebody that did, you know, a couple hundred grand last year and now they're going to do, you know, multiple seven figures, it doesn't pass the straight face test. But if you're wondering, just ask them like, hey, what are you year to date? You know, give me a ballpark. Year to date, where are you? What have you done so far? And see what they say.

Gotcha. I appreciate it. Not to keep this going too long, but I just, if somebody, if you're having a great conversation, you're in person, you're at a networking event, you ask that question and you find out that there's way below your threshold. Like what's your go to thing to be super nice, make sure they end on a good note, but don't think they could be a client.

Good question. Because you don't want to seem like a jerk, you know, like you're too small for that. It's a thing that's just in my pocket now. You know, I'm like, oh, that's awesome. Congratulations on the growth. You know, that's, that's, that's tremendous. Especially if you're a solopreneur. The way that I've built my firm is we're set up to help businesses that are in the construction services industry that are anywhere from 3 to 20 million dollars in revenue. And so you don't have to say, like, you're too small. Just tell them what the deal is. Like, this is who we serve. And so they're like, oh, we're not there yet. And like, cool. Let me know when you get there. I actually know some people that serve businesses that are, you know, at a stage similar to yours. And so if you'd like me to refer you to a fractional CFO that I know and trust that helps business that are kind of where you're at now, I would love to make that introduction. If you want to, you could do that. I love giving referrals, so that's always like a fun thing for me to do. So that way you look, you're actually helping them and so you definitely don't look like a jerk. That's like, you know, too. Too cool for school. But yeah, just tell them, like, this is who we serve. And then that's cool. Like, it's very obvious.

Awesome. Thank you.

All right, my friends, I hope you found this episode helpful. If you did, it would mean the world to me if you would leave a five star review on Apple Podcasts, Google podcasts, Spotify, wherever you're listening to this episode. In the meantime, I can't wait to see you back right here next. I'll see you then.