For example, if you use direct mail as a way to generate new prospects, then step four in your formula may look like this:

"Marketing Efforts: I need to spend $______ per month to generate one new qualified prospect."

The following formula is for your cold-calling efforts only. Develop a separate formula for all additional prospecting activities (for example: PR/marketing, alliances, partnerships, published articles, networking, referrals, speaking engagements).

Finally, please note that this formula does not take into account residual income generated from each sale. To compensate for this, use the average lifetime value of one client (excluding any referral business they send you) as the factor for steps 1, 2, and 3 in the formula. For example, if you are a consultant that is paid on average $1,000 a month as a retainer and the average lifetime of each client is six months, then in number 1, the average sale would be $6,000. Once you have this number, you can complete the rest of the formula.