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84 • The 100 Greatest Ideas for Building the Business of Your Dreams

how budgets are set and whether some money is or could be allocated to the project
you are selling.

Frequently, large companies have capital investment budgets separate from the
day-to-day running budgets or revenue budgets. If it is possible, it is very desirable
for the selling team to know how these budgets are set and to what level they are
delegated.

The delegation issue is important. Some boards will delegate portions of the
capital investment budget to the next level of management, but insist that each
major item of expenditure returns to them with a report and a recommendation on
which they will then make a decision.

Other boards will actually delegate the decision to the next level, or even lower.
The trend as I write is towards more centralised control of capital expenditure budg-
ets.

Having established where the budgets are, the selling team then has to answer
the question: 'Has money been allocated to this project?' Or, failing that, 'Is there a
reasonable chance that the money can be found?'

Be careful of a referral to another level. A salesperson was selling to the product
development manager of a firm of stockbrokers. He carefully established that the
manager concerned did have the authority to sign for a pilot scheme of £20,000.
The budget was his and he had sufficient in his research and development fund to
allocate the money to this project.

Unfortunately, he did not have the budget to fund the full project which, when
the solution was rolled out to all customers, was going to cost some £100,000. His
boss took the view that a decision on the pilot could only be taken if the people
responsible for the larger amount were consulted and their agreement sought.

The result was much delay while the selling team demonstrated and sold the
product to the sales and marketing department.

This was very difficult for the selling team to discover in the qualification proc-
ess, but is a good example of how careful and wide you have to be in your question-
ing in this area.