What Is a Book of Business?

Book of business is a term that refers to a professional’s list of accounts or clients. Finance and legal professionals are likely to use this term.

Find out more about developing a book of business and what you can use it for.

A book of business is the list of clients maintained by someone who provides specialized professional services, such as financial services.

Ideally, the professional regularly adds clients and customers to keep their book of business growing.

Professionals who might keep a book of business include:

Financial advisers
Private and investment bankers
Financial planners
Certified public accountants (CPAs)
Lawyers
Insurance sales agents
Salespeople

How Does a Book of Business Work?

Your book of business should include all customers or clients you have worked with in the past. As you acquire a new client, add them and their information to your book of business. Your book of business is ideally ever-changing and evolving, with new information added about your clients as your relationship progresses.

For example, you might be an automobile salesperson, and your client list grows a little day by day. You closed a sale just this morning and added the new client to your list. However, don’t forget the individual you sold a roadster to two years ago. Maybe they’re married with a child by now and they’re ready to buy an SUV.

Note

Whatever your industry, maintaining a healthy book of business means keeping in touch with existing customers and clients as you cultivate new ones, so that you’re front and center in their minds when they again have a need that you can fill.

Your book should not just be a list of names with corresponding telephone numbers and contact information. A good, comprehensive book includes details of each transaction and other data, even personal tidbits. Other items to include:

Demographics such as age and occupation
Assets under management, if applicable
Revenue generated from this client
Referrals, if any
Potential future needs

For example, if your roadster customer did indeed marry, you might note this if you see the announcement online or in the newspaper. It’s a great, personal conversation starter should they contact you, not to mention an opening if you contact them to ask them if they’re now in the market for a bigger vehicle.

Developing and maintaining relationships is a key function of your book of business. Since networking is about building relationships, it’s a good skill to have when building a book of business. You can network the old-fashioned way, through networking events and other in-person functions. But you can also grow your network through social media and marketing and even your branding.

Valuating a Book of Business

Your book of business has monetary value because the clients within it (and your relationships with them) represent your past, current, and future income. Additionally, each client may potentially connect you with a referral, growing your client list, and therefore your business.

Depending on your industry, you can define your book’s value by the revenues each client contributes to your coffers yearly or monthly. As an example, a financial adviser at a given firm might have a book of business that includes 100 clients and $100 million in client financial assets.

Not only does it offer a measure of personal satisfaction to know what your book of business is worth—particularly as it grows—but it’s not uncommon in some industries to actually sell your book to another practitioner. Such a transaction is most common in investment, law, and insurance circles. You’re selling your leads when the time comes that your book is no longer useful to you, such as when you retire or if you change careers.

Note

If you’ll be selling your book of business, it’s a good idea to personally contact your clients or customers to connect them with your successor. They may appreciate the connection—or they may decide to take their business elsewhere.

Of course, the duty falls upon the new owner of the book to cultivate these relationships on their own. Clients cannot be restrained from moving on if they’re unhappy with you or someone who has taken over your book of business.

Do I Need a Book of Business?

In order to grow your business as a professional, you need a way to organize your clients, keep up to speed on their needs, and identify future paths of growth for your business. Keeping a detailed and frequently updated book of business is a proven method to achieve these goals.

Key Takeaways

A book of business is a list of a professional’s clients or customers.
It’s important to nurture this list and keep it updated in order to develop relationships with your clients that can lead to future revenue.
It’s possible to sell a book of business when it’s no longer useful, because it’s valuable as a source of leads for other professionals.