Great deals rarely fall into your lap. A robust and sustainable pipeline takes work to build and maintain. I spend countless hours every week searching, connecting, and evaluating to find the right opportunities to focus my energy.
This article will give you an outline of my prospecting playbook. I call it the Five R’s.
- Research
- Reach out
- Record
- Reminder
- Repeat
Consistency is the key to its application. As you know, little by little, a little becomes a lot.
Research
Your investment strategy will determine how much time you spend on research. Some asset classes and locations are rich with opportunities for direct investments. Others are very thin.
Your approach here depends fully on how much work you want to do to build a robust and sustainable pipeline. The results are directly correlated to how much effort you put into it. Consider the list of research sources below from least to most intensive.
- Follow local newspapers
- Read industry news
- Subscribe to and read all trade publications
- Follow and connect with industry leaders on social media
- Connect with people at industry events
- Map out all properties that fit your criteria
- Research office phone numbers and emails of principals involved in target properties
- Find mobile numbers for those principals
You may feel like a bit of a stalker on the last couple of points, but that’s how deals get done. Dealmakers are persistent about getting in touch with decision-makers. If they can’t help you, they can point you in the right direction.
Remember to spread your research across all three deal sources – direct, intermediaries, and centers of influence. This will ensure a steady stream of opportunities.
Reach Out
A robust and sustainable pipeline depends on filling it consistently.
Cold introductions are nerve-racking, especially if you’re new at it. Consider these two points to frame your approach.
- A bad experience on the first call may be a good signal to eliminate that prospect
- They probably won’t remember you if it doesn’t go well
You will get rejected. People won’t return your calls or emails. You’ll be told that they don’t work with private investors. You may even feel like you’re wasting your time.
Persistence is the key. You may have to kiss 100 frogs to find your prince.
The reality is that the only way to get better at cold outreach is to put in the repetitions. Practice will help you figure out what works best for you – email, call, text, social media, etc.
Record
Your memory may be good, but it’s not perfect. Therefore, I recommend keeping a record of each relationship in a secure and transferable place.
I use Cloze as my CRM tool because it lets me send trackable emails and categorize my contacts in a logical way. This reduces the note-keeping burden, but it also makes my database more useful when I want to get back to a neglected segment.
You don’t have to record everything. Just focus on the areas that are most likely to strengthen the relationship or define how you can collaborate.
Reminder
A database is only as good as how you use it. In this process, we’re not just interested in collecting a bunch of data. We also need to connect the dots on a regular basis to maintain a robust and sustainable pipeline.
Follow-up varies depending on how well you know the prospect. An initial connection needs more frequent follow-up than a warm friendship. Either way, your relationship strategy should focus on delivering value in every interaction.
Make an effort to get back to initial contacts once or twice a week for the first month. This could be as simple as a social media connection or sharing relevant news. By doing this, you will solidify your relationship as one of value and relevance.
You may not get anywhere in that initial connection phase, but you’ll learn about what gets your connection excited. Thereafter, you can set reminders to be in touch every quarter or so.
Repeat
Business development is an iterative and subtractive process. Your objective is to consistently find and qualify new prospects.
A full-time business developer can survive on 300-500 contacts, but that is not a stable count. It ebbs and flows based on how people move around the industry.
Do what you can to spend time on this process every day. Some days may be research-heavy and others focus more on reach out. Just do a little bit each day.
This sequence and workflow to build a robust and sustainable pipeline follow the flywheel concept. It may be very difficult to get set up in the beginning. However, once you have it going with a solid rhythm, it produces results almost effortlessly.