Meetings & Conventions: Planner's Portfolio February
By Robert C. Brenner
THE COST OF MEETING WITH A CLIENT
Before agreeing to meet face-to-face, calculate the expense
to your business
In their zeal to maximize the bottom line,
small-business owners sometimes overlook the cost of meeting with
prospects and clients.
Every action related to winning a job has an associated cost.
Client meetings are often the hidden profit crunchers that make
some jobs just not worth taking.
Before agreeing to meet, do a cost-benefit analysis.
The cost of meeting with a prospective or current client can be
determined with a relatively simple formula. Put this analysis into
a spreadsheet to plan for and track the cost of any meeting you’re
First, estimate the costs for each person in your company who
will attend. If one makes $10 an hour, another $25 an hour and a
third $30 an hour, your total payroll cost for the meeting is $65
an hour. Now add in the cost of fringe benefits vacation pay, sick
leave, group health plans, dental and vision care,
retirement/pension plans and other benefits your company provides.
One rule of thumb in figuring the total cost per employee is to
assume your business has required deductions and fringe benefits
that add about 38 percent to each person’s hourly rate. Thus, an
employee earning $10 an hour actually costs the company $13.80 per
Program the spreadsheet to multiply the salary costs per hour by
the percentage increase allocated for required deductions and
benefits (in this example, 38 percent). The result is a total pay
and benefits cost of $89.70 for each hour.
Next, address overhead costs associated with planning the meeting.
This includes time spent discussing strategy, writing and designing
the presentation, creating visuals and “invisible” expenses
incurred by those who attend (for example, interruption of another
Two hours of prep time for a one-hour meeting yields a planning
overhead of 200 percent. If every person attending the meeting
takes two hours to prepare, multiply the hourly pay and benefits
figure by two to get $179.40 as the preparation cost. If only one
person must prepare, a major percentage is allocated to this
person, and a minor percent (say 5 percent) can be allocated to the
other attendees. For our example, we’ll assume that all three
people must prepare equally (hence $179.40).
Now consider expenses such as transportation, food and
materials. One car driven 30 miles, one hour of travel, five cups
of coffee, 25 sheets of inkjet printer paper and six overhead
transparencies add to your costs.
THE BOTTOM LINE
Per this example, a local, one-hour meeting with a prospective
customer can cost more than $400. Such knowledge can help you
decide whether to agree to the gathering, cancel it or find ways to
go ahead at a lower cost.
You might change the meeting’s duration, use a different form of
interface (perhaps teleconferencing or videoconferencing) or have
fewer people attend. Another option: Invite the client’s
decision-makers to meet in your offices, rather than taking your
team on the road.
The financial benefit of client meetings rises if you assign
costs to whether goals were met. What opportunity did you gain or
lose? Was time saved because a face-to-face meeting clarified a
misunderstanding? Did you obtain good market intelligence that
helped you develop a successful strategy for penetrating a new
area? Did the customer refer you to others?
While you can’t always put a dollar value on face-to-face
contact, these measures can help you make decisions that will
protect the profitability of your business.Robert C. Brenner is the San
Diego-based author and publisher of The Small Business Guide to
Pricing (Brenner Books; www.brennerbooks.com), to be published this
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