Thougthful Thursdays - Sell The Value To Make The Sale

You have probably heard it before: "Price is what you pay, value is what you get". Well stated by Warren Buffett and very true.

The difference between price and value, the added value, is the benefit to your customer. Knowing what business you are in will help you determine the benefits you bring to the table, and it is the benefits that create the value in your products/services. The benefits or added value answers the customer question, "What's in it for me?"

In preparation for the next time someone asks what business you are in, list the key features of your products/services and ask yourself: "So what?" Answering this question will lead you to the benefits. Be prepared to ask yourself more than once to get to the real benefits.

Good selling,
Richard

Wise Wednesday - Eagle's Nest

Here’s a fun thing you can do to test your business idea. Gather 4-5 people you respect (at least one person should be good in finance).

Tell them you will buy some pizza, maybe throw in some beer (wine) and they will be part of the “Eagle’s Nest.” You will do a 5-10 minute presentation of your idea – complete with handouts and unlike the show “Dragon’s Den” they will tell you what they like about your idea and where it’s strong. They will then let you know areas of concern and gaps that you need to work on. Finally everyone will take their turn in telling you what they believe will make your business “fly.”

Future entrepreneurs need reality testing – but they also need constructive feedback. The "Dragon’s Den" makes for a good show but remember most businesses have started without their support!

Cheers,

Dominik

Thoughtful Thursdays - Sales And Credit

I had lunch with a good friend and business owner last week and he told me they had just been informed that one of their customers had gone into bankruptcy protection. The account was relatively new and developing a good history of on time payment and growing purchases. This is normally a positive situation worthy of praise to the sales team for closing new business.

The financial exposure was significant, but fortunately my friend's business will survive where many others might have been dragged down with the customer.

The question to think about today is what can a business owner do to mitigate these occurrences?

First on my list is to have company policy that covers the terms and conditions of sale. Examples of what might be covered in such a policy could be annual credit checks, terms of payment, ongoing reviews of maximum credit to be extended, shipping terms, return procedures and penalties for late payment of invoices. You may also want to consider accounts receivable insurance and/or factoring in a set amount to your costs as a safeguard. Train your sales team to ask questions that will keep your business aware of your customers' financial health.

From a sales point of view we all want to sell more. From a financial point of view we want to be profitable and sustainable. Accepting orders without appropriate regard to the consequences of non-payment is a recipe for failure. We have all taken a chances in order to be the 'good' supplier and gotten away with it - lucky us.

Don't depend on luck, businesss is business and being vigilant will help you stay ahead of looming pitfalls.

There are no guarantees you will not encounter bad debt. In my experience it is only a matter of time before does happen to you and you want your business to be prepared and able to withstand the fallout.

Good selling.
Richard

Wise Wednesdays - Not Perfect

"Better to do something imperfectly than to do nothing perfectly." Robert H. Schuller

You will not get all the money or resources you need. Your promotional material may not be what you wanted. You may not know exactly if your idea will work (or worse you absolutely believe it will ). Things will change. You will be doing some things on the fly. You may not have all the answers. You will be frustrated. You will be uncomfortable.

Become a master at mastering excellence and resourcefulness. Perfection doesn’t exist in life. Don’t expect it in business.

Cheers,

Dominik

Thougthful Thursdays - Short And Sweet

You have two eyes, two ears and one mouth...

... spend twice as much time observing and listening rather than speaking.

Good selling,

Richard

Wise Wednesdays - Direction more important than speed

Recently I just did a cross country trip in the Laurentians for three days. I skied for 4-6 hours a day on some difficult trails (there was some 80 km of trails). I had developed some confidence because I had taken lessons and practiced on some easier trails for the past two years. I enjoyed the experience. I don’t think I would have enjoyed it as much had I just jumped in and did it for the first time (not to mention the possibility of injuring myself).

In many ways I had gone through a transition period by preparing and testing my skills before tackling tougher hills.

Becoming an entrepreneur requires a transition period. Too many people leap when what is called for is a steady well-thought out plan (with alternatives).

Seek advice, do a business plan with careful market research and realistically assess your resources. Not doing these activities can kill your business.

Come to think about it running a business is like a cross-country trip – you are constantly plodding along and feeling like you’re moving too slowly. However, at the end of the trip you look back with a great deal of accomplishment and satisfaction.

Direction is more important than speed.

Cheers,

Dominik

Thoughtful Thursdays - Increasing Sales Part 3

If you have followed my last two blog posts, http://tbdcblog.blogspot.com/2009/02/thoughtful-thursdays-increasing-sales.html and http://tbdcblog.blogspot.com/2009/02/thoughtful-thursdays-increasing-sales_26.html you have developed a sales forecast for the next twelve months, unidentified by customer how much your existing base will contribute to the projected growth, and calculated the gap you want to bridge in order to meet sales expectations.

Closing this gap is what we will be discussing today. Where will the sales come from?

Perhaps the easiest place to grow your sales it at your existing customer base. Have you thought about ways you can add value to your already loyal customers?

Knowing what keeps your customer up at night will help you identify what additional products and services you might want to add to your offering.

An example for website design/development firms might be to add a monthly service that provides relevant traffic statistics. Most know that traffic information is important, but many have not allocated the resources to retrieve the information. If this is the case, they will not have a good sense of how the website is performing. You can help your customers maximize the effectiveness of their websites and ultimately increase their sales by making it easier for them to access this valuable information.

Most of us also know that backing up our files should be a routine practice, but how many of us actually do it? How many keep their back ups in a secure place where their computer is not?
As an IT service provider why not make it easier for your client and simplify the process for them. Consider adding a back up service to your ongoing maintenance contracts for an additional fee.

Now that you have ways to further increase sales at your existing base, let's talk about new business at new customers.

• How many targets are you working on?
• Are you calling on enough prospects?
• Where are you in the sales cycle?
• Do you have an idea of the probability of closing the sale?
• What is the value of the potential sale?

The answers to these questions will help you manage your time spent with your prospects. The higher the potential, the more time you may want to spend on it. Temper this with where you are in the sales cycle. Ideally you want to have a balanced mix of prospects in various stages of the sales cycle. That way there is always something developing.

In my experience missing sales targets on a regular basis is linked to not getting in front of enough of the right prospects on a regular basis.

You might want to have a list of your top ten targets that you will focus on. This list will change as sales are closed and new prospects are added. Approaching sales in an organized fashion will make the best use of your resources and result in faster growth for your business.

By taking the time to think about what you want to accomplish and planning and executing accordingly, you will meet your sales expectations on regular basis.

Good selling,
Richard

Wise Wednesdays - Pillar # 4: Character

Reputation is the shadow. Character is the tree.
- Abraham Lincoln

Pillar # 4 - Character

This pillar is the most important but the hardest to describe. Here are some general observations but this is by no means complete:

Commitment - Entrepreneurs are more like marathon runners than sprinters. There is sense of endurance; of determination to see their venture through to the end. They are not just dreamers but realize one needs practical solutions. They are results oriented. They stay true to their values while being flexible in their approach.

Sacrifice – You must be willing to give something major up like cutting your income in half for the next two years and/or working 12-16 hour days/ 6 days a week for the next two years and/or doing things you would never want to do like selling. Anything worth having requires sacrifice.

Accept personal responsibility - Those who are successful are people who fully accept responsibility for what happens (they don’t play the blame game). Ultimately it is their quest to do their best regardless of the circumstances. They may get knock down but they pick themselves up again. You have heard this before but attitude gives you latitude. You don’t have to go around with rose coloured glasses thinking everybody loves you but having a healthy world view – one that reinforces hard work and integrity – will serve you well.

Create a support network – Those who have the support of family and friends and can create a network of contacts and even a mentor have a better chance of success. Smart entrepreneurs get out and create and nurture such a network.

What I find most fascinating is that your true colours come out when you run a business. You can’t hide behind an office or blame the boss. It’s great journey and a courageous one.

What other character traits have you come across?

Drop me a line.

Cheers,

Dominik