All revenue is not created equal

Yes, a dollar is a dollar and yes, it's all green. But how does it look at the bottom line of your income statement?

There are essentially 2 sources of services revenue:

• Revenue from new business
• Revenue from existing customers
  

While long term growth requires the acquisition of the former, successful execution will likely lead to the higher margins of the latter.

Acquiring new business is expensive. Participation in the sales cycle can require months of non-billable time and expenses. And closing the deal often requires significant concessions on rates.

Add-on business from existing customers, however, typically requires far less investment. A formal sales effort is usually substantially compressed to a week or less, if required at all. And, perhaps more significant, as a result of the trust and relationships that have been built during the course of the initial engagement, billing rates can usually be brought up to market levels. The result is revenue that will produce far more attractive margins than that of new business, and often over longer periods of time.

The lesson: Execute up front and reap the rewards over the long haul. Leverage the relationships you've worked hard to build and mine your existing customer base for new, higher margin opportunities.