Thoughtful Thursdays - A sales tip for the New Year

Perhaps you are kicking back to enjoy a New Years celebration, spend time with the family or have some quiet moments to yourself to reflect on the past year. Maybe it will be a combination of all of the above.

However you use the time, best wishes for a happy and successful 2011 on behalf of Toronto Business Development Centre.

Before leaving the office for the last time this year, here is a thought to consider for the top of your 2011 to do list.

Promise yourself that your business will not sacrifice price without getting something in return that is equal to or greater than the profit you would be loosing by lowering price just to remain competitive. Negotiate wisely and pragmatically.

• Ask for additional volume commitments
• Propose an exclusive supply contract with price escalation clauses
• Negotiate better payment terms
• Consider a volume rebate structure
• Can you supply other products and/or services
• If the negotiation is due to a competitive situation, be sure you are comparing apples to apples

Enjoy your time off. Come back energized and ready to work to achieve a year of sales growth and increased profitability.

Good selling,
Richard

Thoughtful Thursdays - A sales tip for the holidays

Many say it is the time of year for reflection on the previous 12 months of business and setting goals for the coming year. I agree it is a good time to do this, take advantage of a slower period to analyze results and set expectations for next year. In fact most of the businesses do just that as  the holiday season approaches

In my experience is it was also a good time to take advantage of the fact that many of my competitors were doing this. What advantage you ask?

I would visit my customers and prospects who were not shutting down, or who were a running a skeleton staff during the holidays. The season often brings a more relaxed atmosphere and there is no better time to make a call.

Opportunities to are out there should you choose to pursue them.

Have a Merry Christmas be safe.

Good selling,
Richard

Thoughtful Thursdays - Want to differentiate yourself from your competitors?

Make a habit of doing what your competitor does not like to do.

The above statement makes an assumption that you know enough about your competition to know their weaknesses.

Doing what your competitor does not like to are often things we take for granted, the little things. It could be as simple as providing summaries of your meetings or returning calls in a timely fashion.

In all cases it facilitates the buying process for your prospect or customer, making it easy for them to say yes rather than no.

I look out the window and see that the weather is not the best. Traffic will be affected so I better leave earlier to be sure I am on time for my appointment because I know that my customer will be there on time. What does it say about me if I am late? Take one step down on the trust ladder.

Back to your competition, when was the last time you analyzed their strengths and weaknesses? You probably did it for your business plan, but have reviewed it lately? Has the competitive landscape changed?

As you look forward to the holiday season and a successful new year, take the time to asses your marketing and sales activities as well as the obligatory financial review. Think about your competition, put an action plan together where you can take the lead over your competitors and make it routine.

Good selling,
Richard

Thoughtful Thursdays - Prequel to: When do I close?

... you close when the prospect is ready to buy. That was the thought from last week.

Taking a step back in time, what happened before the close, or in other words, when do you start selling?

We have probably all experienced the 'aggressive' sales person at some point in time. In many cases it is not as much a matter of being that way as the approach taken with the resulting negative results. Inexperienced sales people will often benefit by analyzing their approach and managing their enthusiasm.

Regardless of whether you are selling directly to the consumer or business to business, and as I have said many times before, the first sale that is made is not the product or service you plan to offer, it is you.

Back to the the question of when do you start selling. It is important to know exactly what you are selling and more importantly the order in which to sell.

If you begin to sell your product or service before you have sold yourself, you may loose the prospect. Making your pitch before your prospect is willing to listen is a pretty good way to drive them away, if that is your intent.

Rather than ABC, I continue to recommend Always Be Listening and Looking. Gaining the initial confidence of your prospect can happen in a very short period of time, and in the grand scheme it is well worth taking that time to do.

There are as many approaches as personalities, and over a period of time you will learn what works best for you. Putting yourself in the shoes of your potential customer, and thinking about what approach works on you is a good place to begin. It must be natural and comfortable.

Good selling,

Richard

Thoughful Thursdays - When do I close?

If you listen to Alec Baldwin's character in the movie Glengarry Glen Ross (caution for language) the answer is as simple as ABC, Always Be Closing.

Although it does not make for a tidy initialism I subscribe to the practice of ABLL, Always Be Listening and Looking for the signs that your prospect is ready to buy.

In any consultative  process, listening to your prospect is key and sales is no different. It may seem obvious to some. It is difficult to consult successfully if you do not know what the needs are.

You close when the prospect is ready to buy. That sounds simple enough, the rub is learning how to recognize when the time is right.

Many will listen for signals such as silence - no more questions as they have all been answered.

Another sign maybe in the language they use when asking questions about the product or service. Are the questions being posed as if they have already made the commitment to purchase?

No matter what the signal is, it will not be communicated until you have clearly articulated your ability to meet all your prospects needs with your proposed product or service offering.

When your thoughts turn to attempting to make the close, ask yourself once more: "Have all the needs been addressed?" If you have, it is time to close.

Good selling,
Richard

Thoughtful Thursdays - Building trust without making personal contact

One of the hottest subjects today is the use of social media as a business tool. I would agree that a social media strategy with a well executed tactical plan will increase awareness in a market place. When used in conjunction with other Internet communications services this increased awareness can translate into more prospects and eventually new customers.

Some traditional thoughts about selling tell us that:

• Relationships are crucial to the success of any business
• A key benefit of a good relationship is trust
• Trust is at the top of the list in making buying decisions

Enter social media, and the challenge of building trust with minimal or no personal contact. In my experience, customers now conduct significant research before making the decision to purchase. In many cases the decision is appears to be based more on price than relationship. All things being equal, how will you, without the opportunity of building a face to face relationship, build trust to a level that will result in an order in your favour?

Here are a few suggestions that may be useful in building a trustworthy online presence:

• Do not post or make inane comments
• Contribute to online forums and comment on articles that will benefit from your expertise
• Fully complete your online profiles
• If you like a post, tell the writer why
• Offer constructive criticism not personal shots
• Make it about them, not you
• Thank your readers
• Be consistent
• Assume that anything you post can be seen by anyone, anywhere at any time

I will always be a believer in the value of relationships built on personal communication. Social media presents a great opportunity to grow your list of prospects. When it comes to closing a deal, I prefer to do that in person, but that's just me.

Good selling,
Richard

Thoughtful Thursdays - Two years later

Thoughtful Thursdays is now the ripe old age of two. Thank you to everyone who has taken the time to drop by and read my ramblings and occasional rants.


Taking a look back, what was going on two years ago?

• The world was in a midst of financial meltdown due to the subprime mortgage crisis
• President George W. Bush signed the $700,000,000,000 bail out bill
• Canadians elect another minority government returning Stephen Harper as Prime Minister
• The Bank of Canada interest rate was around 2.5%
• One Loonie was worth about $0.84 USD
• The Toronto Maple Leafs won 7 of their first 17 games (Some things never change)
• The first Thoughtful Thursday posts was titled What are Your Sales Challenges?

Going back to that first post, have your sales challenges changed over the past two years? Did the impact of the economic conditions cause your business to change its approach? Is your target market the same as it was?

A lot can happen in two years and we would be very interested in hearing about your experiences if you have a moment to leave a comment.

Good selling,
Richard

November 11, 2010 - Remembrance Day

Thoughtful Thursdays - Great expectations

Oyaku donburi, is a Japanese meal in a bowl consisting of egg, chicken, mushrooms and onions (I have enjoyed it with other vegetables as well) in a delicious sauce served on hot rice. For me it is a great all season comfort food.

My friend and I went to see an early movie the other day and were looking for a bite to eat after. We decided on Japanese food and headed off to a local restaurant where we had dined before, albeit some time ago.

The first thing I noticed when we got there was that the ownership had changed. Not a big deal, it happens all the time. The menu remained the same and the staff were as friendly as I remembered.

I had decided on the way that I was going to order one of my favourite dishes, oyaku donburi. The first warning flag flew when the server was not sure what I was ordering. Once I showed her on the menu, all was good...

... or so I thought. I could not believe my eyes when the bowl arrived. This was not what I ordered, it was chicken teriaki on rice. Maybe I ordered the wrong item? No, in fact this is a short version of the conversation that followed:

Me: "This is not what I expected when I ordered oyaku donburi"
Server: "What is the matter?"
Me: "Okaku donburi is egg, chicken, mushrooms and onions (I have enjoyed it with other vegetables as well) in a sauce served on hot rice.
Server: "Tell me how it is made"
Me: "That would the chef's job"
Server: Would you like to order something else?
Me: No

Many apologies later they did not charge me for the meal I did not eat and promised faithfully that the next time we came in, they will be ready to serve oyaku donburi in the manner in which it was expected.

Next time I thought? I really don't think there will be a next time.

I have a theory about the new owners. They purchased the business and unfortunately did not hire a qualified chef. They did not examine the menu and decide whether or not they were capable of serving all the items listed. As a result, my expectations were not met and they have lost one potentially repeat customer forever.

Learning: Do not offer what you can not serve.

Good selling,
Richard

Thoughtful Thursdays - On persistence

"Be persistent" are words you commonly hear in sales training sessions. They are used often in association with: "don't take it personally" and "no today is does not mean no tomorrow". Good sales thoughts.

It is ironic that when you re-arrange the letters in the word persistent they also spell the two words "pester" and "isn't". Okay, I took the liberty to add the apostrophe. These two words describe what being persistent is not. I don't know how many other words can define themselves so clearly.

There is a line, some may see it as fine, and when you cross it, you transform yourself from persistent to pest. I would think the former characteristic is more desirable.

When you put your mind to it is it quite easy to avoid becoming a pest. Here are a few tips:

• Another 'P' word, be patient.
• Never complete a communication without knowing when the next one is going to take place.
• Listen to your prospect and respect their time.
• If the next contact is agreed for two weeks later, call in two weeks - not earlier and not later.
• When re-establishing communications based on a prior understanding, and the prospect is not available, leave a message and let them know when you will call back. If you call first thing in the morning, a late afternoon follow up call is likely acceptable.
• Have enough people to follow up with so that one prospect does not become your raison d'être.

I have been characterized as persistent, and take it as a compliment. For me, persistence means not giving up or losing sight of the goals and objectives. It does not mean drive someone around the twist by calling several times a day. If I have the time to do that, I do not have enough prospects, and without enough prospects I will not achieve my objectives.

Good selling,
Richard

Thoughtful Thursdays - Oh look, another shiny coin...

I agree with what Mark Evans recently wrote in the Toronto Globe and Mail about turning down work if you cannot deliver. He talked from personal experience and suggested that by being selective in the work you take on, it will allow you to focus on what you do best.

New businesses are often so eager to achieve sales they will take on almost anything, even if it takes them outside the scope of the original business plan. Not that this is bad, but you need to be aware of possible consequences. In many cases new business owners must do this to make ends meet.

Chasing all the shiny coins can dilute your product or service offering to the point where your business is no longer the best at anything. A Jack of all trades is not necessarily a bad position, but consider this. Will your business be more successful doing many things just okay or one or two things incredibly well?

This will also relate to the profitability of your enterprise. The 'sell to anybody' businesses normally operate at lower margins an in a more competitive market place than the specialized, targeted shops. Both options can be successful. 

If you are operating a small business, can you afford to be everything to everybody. Going back to Mark Evans article, it is often a better choice to be selective, take on what you know and excel at it. By focusing on what you do best it puts you in a stronger position to accept or decline business outside the scope of your normal offering and keeps you in control. You can choose to add to your business when the time is right for your business.

It is acceptable say no.

Good selling,
Richard

Thoughtful Thursdays FAQ - Why do businesses fail?

One of the subjects we often get asked about by people wanting to start up businesses is why so many start-ups fail. We would rather talk about the ingredients for success, but let's examine the question as asked by our customers.

When the dust has settled, the reason why businesses fail is that they run out of money. Of course there are many reasons this can happen. Before we get into some reasons let's make some assumptions:

1. The business idea has been researched, a market for the proposed product and/or service exists and proposed pricing supports the idea.
2. Sufficient capital is available to fund anticipated start up costs
3. A sound business plan has been written.
4. Going out of business was not by choice.

The point here is, if everything is on the up and up, what can go wrong? Let's look at the reasons a business runs out of money. If we examine cash flow, there will probably be a growing negative monthly balance eventually leading to an overall negative cash situation. In other words more money is going out than is coming in.

On a basic level, the combination of  sales or the collection of monies owed is being outstripped by expenses.

What can cause poor sales?
Why are accounts receivable not being collected?
What is costing so much?

The earlier you discover the bad news, the better. Keep good records and review the finances on a regular basis. If sales are not coming in as expected, review your targets and develop a plan that will accelerate the sales cycle. If the sales cycle is longer than expected, develop a plan to increase prospect generation.

If receivables getting out of control, don't be afraid of placing delinquent accounts on credit hold. Get out and start collecting what is owed. Consider hiring a service to help. Review all accounts and set high credit exposure limits.

Examine your expenses carefully and determine where money can be saved. Control petty cash expenditures. Rank your suppliers in order of dollar volume and set a goal to reduce costs by a chosen percentage starting with your largest supplier.

There are numerous reasons businesses do not succeed. Minimize the chances of being a statistic by paying attention to the numbers and taking the time to know the details.

Don't be the last to know there is trouble on the horizon.

Good selling,
Richard

Thoughtful Thursdays - Is it getting warm in here?

When everything is running well, customer/supplier relationships are realtively easy to grow and maintain. After all, you are likely meeting or exceeding customer expectations, and getting paid almost on time.

In these halcyon days, what are you doing to insure the relationship will continue to flourish?  Perhaps there are customer events to attend, you probably check in frequently to see if there is anything you can take care of such as taking the next order or reporting on project or inventory status. It is all good... for now.

A few other things you might want to consider doing, there is no better time to grow and maintain your internal customer relationships. Your internal customers include your suppliers, staff and everyone else who has contributed to the high level of customer satisfaction you have achieved, because it is only a matter of time before something happens and your customer begins to turn up the wick and the equilibrium you and your team have worked so hard to attain will be upset

Run a few 'what if' scenarios to test your abilities to resolve concerns before they become issues. An important key to resolving issues is the ability to address them quickly. In order to do this, everyone on the team must be in sync and strong relationships help achieve this.

So don't get caught taking things for granted or resting on your laurels, pay attention to your internal customers and suppliers so when the heat begins to crank up and you need everyone to stay in the kitchen, they will.

Good selling,
Richard

Thoughtful Thursdays - Do you know what your selling process is?

I read Paul Castain's latest Sales Playbook recent post titled "3 Traps To Avoid In Your Next Meeting" today and could not agree more with his thoughts on the need to have a sales process.

Veteran purchasers will employ many tactics to get you off your plan. Even experienced sales reps can fall prey to these actions and in the interest of making a sale, or fear of loosing a sale, forget all about value and begin to pitch without knowing what the customer needs are.

In addition to Paul's great advice on how to avoid the 3 traps I would add the following suggestions. These apply regardless of your experience as even the most savvy can get caught. Why do you think professionals practice as often as they do?

• Set objectives for all your meetings
• Determine what you need to know to achieve those objectives
• Write your questions down and have them with you
• Write down what you are not ready to discuss to help keep you focused on the job at hand

Selling is all about helping and you will be the most helpful when you know exactly what the needs are. Make your selling process routine practice and you be better positioned to avoid the traps.

Good selling,
Richard

Thoughtful Thursdays - If you don't mean it, then don't say it.

You have probably shopped at one of the large chain stores and while checking out been politely asked: "Did you find everything you were looking for?"

Last week in that very situation my answer was "No I did not."

My expectations were running high that day and I eagerly awaited a response... "That will be $10.10 please"

We know what happened to the first question. They have to ask because it is company policy and if they get caught not asking, a disciplinary meeting may result. It is company policy because the ones in the know feel it serves their customers better by asking this question, and it most certainly will if the person asking the question really cares and is able to do something about it. Does anyone even measure the responses to the question?

What would happen if they responded by asking me what it was I couldn't find? May I take you contact information and let you know when we do have it? What would happen is the check out line would get longer and sales throughput might suffer, not to mention the number of disgruntled customers would increase due to the slow check out line.  Also not good, so what is the answer to this dilemma?

I do realize that it is impossible to please everyone and that all good business owners do their best to have as many happy customers as possible. If you are not measuring the results of your business activities, whatever they may be, that may be a good reason to stop doing it.

In the case of "Did you find everything you were looking for?" if you are not able to act, or if it might be perceived insincere as a result of inaction, then don't do it. It may cause more damage to your business than the good intent it was born from.

Do not promise what you can not deliver.

Good selling,
Richard

Thoughtful Thursdays - Can you function in isolation?

A previous post titled "Honey, can you pick up the kids", talked about the pros and cons of setting up shop in a home office. We talked about keeping personal and business activities separate and ways that might be accomplished.

We did not talk about how working from home can sometimes be a lonely job, especially for those who have not had the opportunity to work on their own.

The water cooler conversations just aren't as much fun when there is no one to exchange stories with.

Here are a few activities that may help avoid the feeling of being alone in your business.

• Plan your activities at least a week in advance. Remember that time in the office is time you are not in front of your prospects and customers.
• For days that you must work in the office, go out for lunch and take your regular breaks.
• Meet with a business advisor, mentor, colleague, peer or friend on a regular basis to talk about how things are going.
• Join a relevant business association or entrepreneurial group and attend the regular meetings. You may want to consider working on a committee.
• Start your own group.

Launching or running a business on your own can be overwhelming at times, but there is little reason to do it all on your own.

Good selling,
Richard

Thoughtful Thursdays - So you want to sell value?

Last week in "Music to my ears", I mentioned value selling and the fact that you will be challenged to do it once a competitive situation is identified. This week's thought talks about the value selling.

Value selling has been around as long as there has been competition. In order to be successful, one must be able to quantify the value that is being talked about. That means coming up with a concrete number - dollars or units of time are examples. This is what will ultimately contribute to your competitive advantage.

In order to come up with this number, you must do the math.

In order to do the math accurately, you must know how your customer operates. What are the costs of providing their products and/or services. The number need not be exact, but it does need to be believable and more importantly, quantifiable.

As you are probably figuring out, this takes time and a significant amount of effort.

Continue to develop your business relationship. Demonstrate to your customer that you care about their business - show an interest in what they do. You may be surprised at what information begins to come your way. All other things being equal, people buy from people they trust.

When you have enough information, calculate how much time they will save or how profits will increase by working with your company. If the numbers are correct, they will listen.

Good selling,
Richard

Thoughtful Thursdays - Music to my ears

"We already have a supplier that we are happy with for insert your product/service here."

While some may interpret this as a negative response, I see the gauntlet being thrown down, lying there waiting for someone to rise to the challenge and pick it up. Game on is how I see it.

All things being equal, it will only be a matter of time before this prospect is buying from me. The key is to make sure that all things are indeed equal and if they are not, to make them so. Then make those things that are measurable once again unequal, but in my favour.

It can be a lengthy process depending on the sales cycle, but extremely rewarding as well. I learned value selling with a Fortune 500 company many years ago. The tools have changed, but the process remains the same.

Rest assured your competition is using similar relationship building tools to establish credibility and trust. You must do the same and be relentless. That is the first step in making things equal. The prospect must buy you first, the sale of your product/service comes later.

Credibility and trust are built on factors including, but obviously not limited to:

• Meeting commitments that are made
• Consistent calling patterns
• Industry knowledge
• Honesty and clarity
• Humility

As the door of opportunity opens wider you learn more about your prospects needs and the real competitive situation - the playing field will start to level out. The more you learn the easier it will be to establish the reasons this prospect will become your customer. The value of dealing with you will become clearer and easier to articulate. After all it is all about value, isn't it?

It is now that all your value selling skills will be put to the test. But don't fool yourself into thinking it will be easy. In many cases you will be given a opportunity to work on a problem that has been around for years. This is the one that no on has yet solved. Take pride in making it this far, they now have sufficient confidence in your company  to test your problem solving skills.

Next week some tips on value selling.

Finding out that my prospect has a need that is currently being fulfilled by my worthy competition is music to my ears.

Good selling,
Richard

Thoughtful Thursdays - It's not in the crystal ball

This was oringally posted on June 3, 2010. After delivering a workshop this week on sales forecasting, I thought it was worth re-posting.

If you are stuck on how to begin developing your sales forecast, start with how much you would like to be paid by your business in a year, and add all business costs. This will give you an idea of what sales the business needs to generate on an annual basis.

Break the annual figure into monthly targets using your knowledge about seasonality, length of your sales cycles and economic conditions. Also use the tips below in the orginal post.

Good selling,
Richard

June 3, 2010
"I hate making predictions, especially about the future."
Yogi Berra

Forecasting sales can be an onerous task, especially for those who have not had the pleasure of coming up with one previously.

Here are a few suggestions that might make your job of sales forecasting a bit easier.

• Block off enough time to get the job done
• Do your research, pulling numbers out of the air doesn't work
• Be realistic and but don't sand bag - this is your business after all
• Run the numbers from the top down (market potential) as well a bottom up (capacity)
• Try different scenarios (best case, worst case, most likely)
• Compare your planned sales forecasts with sales and promotional activities and make sure the activities make sense - are you forecasting high sales at the same time you plan to be heavily engaged in promotion? Is this a reasonable expectation?
• If you have historical data, use it
• Have detailed forecasts for the top 20% of your customers - by product or specific service
• Plan to measure your actual results versus forecast on a monthly basis, preferably before the end of the month so you can determine where you are heading

An accurate sales forecast will help facilitate the rest of your business budgeting process.

Good selling,
Richard

Thoughtful Thursdays - Look before you leap

Sales are excellent and thoughts of opening a second location begin to creep into your thoughts more frequently. Your customers are encouraging you to expand. To top it off there is a space available in an area that appeals to you and preliminary research indicates this could be a great spot to be located.

Before you make any commitments to expanding your business, ask yourself one important question.

Can the original location run successfully if you are not there?

If you are not able to leave location number one to run on its own, the business is not likely ready to expand successfully to a second location. Have all the bugs worked out before venturing forward, you can not afford to be distracted while getting a second location on its feet.

Think back to when you first opened for business. How much time did you spend starting up and getting to where you are today? Many businesses struggle after expanding because they were not ready and the owner ends up with two under performing locations that split time commitments.

Don't let your vision be clouded by unrealistic expectations and false visions of grandeur. Take the time and be sure your processes and procedures are well documented and working. Talk to other business owners who have successfully grown to multiple locations and seek their advice on the subject.

Don't take anything for granted and increase your chances of a successful expansion.

Good selling,
Richard

Thoughtful Thursdays - Networking or not working?

I read an article in today's Toronto Metro (the daily magazine for commuters) titled "New approach to networking". It focuses on networking for employment opportunities, but obviously applies to marketing activities as well.. After all the only difference between a job search and looking for new customers is the product that is being offered.

The article reports on the book The Power of Who, by Bob Beaudine.

I am not sure the "new" approach is really new, but the theory is sound. Spending more time networking with the people you know will likely pay off faster than attending events where you do not know anybody. Don't stop expanding your network, but work on the people you know first.

Start by making a list of everyone you know, and that means everyone, then pare the list down to your friends.

Friends like, and are willing to help their friends out. It seems simple, but I can't tell you how many times I have to remind my clients to work their own network before going out to find another.

If networking is important to your business, you may find the article interesting. I have to say that in the first year of operating my own business, 100% of the customers came as a result of tapping into my existing network. That network grew again through contacts made from the new customers. I rarely attend "networking" events these days with any expectations beyond hearing a speaker present on a topic that interests me..

My suggestion: Grow from who you know.

Good selling,
Richard

Thoughtful Thursdays - Managing Sales Growth

Congratulations for exceeding company sales projections again for third quarter in a row! Even better news is that the growth trend is expected to continue.

 

So what will you do with this increase in cash flow - or is your cash flowing better? When was the last time you checked? Too busy to do it, assuming that it must be good because the top line is growing?

 

Assume nothing, especially when it comes to cash. There are questions that require answers:

• Do you know how the increase in sales activity has affected your variable costs?
• Operationally, are efficiencies what they need to be?
• When was the last time you reviewed business operations?
• Has fast growth created "hidden factories"? These are wasteful inefficient activities that may develop as a result of unchecked growth, in the name of getting product out the door to satisfy customer demand?
• Are your accounts receivable current?
• Are they increasing faster than sales? This is not good.
• Are your accounts payable current?
• Do you know why your business is growing so fast?
• If your growth is due to your customer's growth, have you run a credit check lately
• Do you know why they are growing?
• Is your customer list growing faster or slower than sales might indicate?
• How is your sales force dealing with the increase in business?
• Are they reaching capacity?
• Do they need help?

It requires more than good sales numbers to have a sustainable and profitable business. Each of the pillars of your business; Marketing, Operations and Finance, need sound management.

Block off time to review and analyze each part of your business on a regular basis. It will pay off in the long run.

Good selling,

Richard

Thoughtful Thursdays - How many selling days do you really have?

Today's thought is about how much time a new business owner really has for selling. In order to achieve sales forecasts, time must be dedicated to sales. In a previous post I talked about how Time Flies.

If there are two numbers I see underestimated on a very consistent basis by new entrepreneurs they are the number of prospects it takes to identify a potential customer, and the length of time it takes to close a sale.

Taking a leap year as it has the extra day to that might be devoted to sales, there is a maximum of 366 days to sell.

From this point on, you begin to loose potential selling days to:

• Weekends
• Statutory holidays
• Vacation time
• Sick days
• Personal days
• Professional development
• Business operations - this will increase as sales increase
• Administrative tasks

Well, I am sure you get the point. My suggestion to all is not to let the average number of days for sales fall below 2 per week.

The sooner sales are achieved and positive cash flow is consistent, thoughts can be directed to ways of buying time back by outsourcing business activities. The result will be more available time that can be dedicated to selling.

Good selling,
Richard

Thoughtful Thursdays - Sales and business management

In most new or emerging small ventures the owner is responsible for managing all aspects of the business. No surprises here.

As discussed in an earlier post titled "Do you manage your sales activities?", time is the resource that the new business owner often runs out of first.

Today's thought is about managing your sales force activities from a business management point of view. As sales manager, you work closely with other members of your management team; marketing, operations and finance.

Exceeding sales expectations is a cause for celebration yet requires and benefits from detailed analysis, just as much as the opposite situation of having a sales shortfall does.

• What affect are your actual sales having on cash flow forecasts?
• Are accounts receivable being received on time?
• Will enough cash be available to pay for forecasted expenditures?
• Do activities have to be postponed or can they be accelerated?
• Are your costs of sales higher or lower than expected?
• How will this affect your planned activities?
• If activities have to be postponed, or can be accelerated, what effect will that have on achieving future sales?
• Is the excess or shortfall significant enough to warrant re-forecasting?
• Are you prepared to scale up or pare down?
• Are you set up to hire contractors or employees?
• Have your operational costs been accurately estimated?
• What affect is that having on profitability?
• Is your business profitable?

At any given point in time it is critical to know where you stand with respect to the following:

• Sales revenues
• Accounts receivable - what money you are owed
• Accounts payable - what money you owe other

There is an interesting case study about a business that experienced dramatic early growth. This sounds like a good situation, and if well managed it can be.

Click here to view the Ivey Institute for Entrepreneurship case study.

Good selling,
Richard

Thoughtful Thursdays - Dealing with the stall

What do you do when your potential customer keeps putting off giving you the or

All questions have been answered and concerns addressed, but they just keep stalling and you feel like you are getting the run around.

There has to be reason for the objection, but you have yet to uncover it. Here are a few suggestions that might help discover the reason and accelerate the decision making process:

• Review your calls, re-confirm the situation with your prospect and reinforce the value of dealing with you - make sure you have not missed anything.
• Did you ask for the next order? - Don't laugh, this happens more often than you might think!
• Confirm the timeline and make sure your expectations are reasonable - do they have inventory to work through before they change suppliers?
• Do you have to be set up as a new supplier in their system? Is there any additional information they need to get from you about your company?
• Develop a call to action that will result in an overt benefit if they place the next order with you.
• Do you know if the incumbent supplier has been able to make a counter offer? Are you getting the 'last look'?

Good selling,
Richard

Thoughtful Thursdays - High Quality for a Low Price

During recent conversations with potential new business owners I was impressed that the majority spent time talking about the importance of providing a high quality product or service to their customers. If they did not know it at the time, they were beginning to get an idea of value.

I say beginning, as the majority I refer to had difficulty or did not clearly relate quality to value. In most cases they were undervaluing their product or service.

Entering the marketplace with a strategy of introductory offerings equating to pricing slightly below the market is reasonable and often used. What many new business owners forget to do is tell their customers what a great deal they are getting and that the introductory price was just that - introductory.

Be sure invoices show the true value of the product or service. If a discount is offered, have it listed as a separate line item.

The likelihood of a new small business being the low cost provider is rare, and taking business on price without consideration of the consequences can be devastating for a business. You do not want to have your introductory price turning into your ongoing price. If this is what happens, your customer does not appreciate the value of your product or service, and that is a topic for another day.

Good selling,
Richard

Thoughtful Thursdays - Do you manage your sales activities?

I planned to to it, but I ran out of time.

Either you planned too many activities in the first place or there was a distraction that took you off your schedule. Many distractions are unplanned and out of our control, that is a part of life.

Today's thoughts focus on what is in our control. Planning for more than what your personal capacity allows will inevitably lead to someone being disappointed. Hopefully it will not be your prospect or customer.

Whether you are able to allocate all your time to sales, or have the responsibility of running an entire company, the business will benefit significantly from a well managed sales process. The benefits include shorter sales cycles, faster receipt of payments and happier customers.

• Have detailed account plans for all key accounts
• Plan your daily schedule to minimize excess travelling time
• Allow enough time between appointments to complete sales reports, check voice mail, make return calls and travel to your next meeting
• Keep meetings on time
• Allocate entire days for sales activities, avoid mixing activities to stay focused
• Each call should lead to the next. Make sure to have a plan of action for the next call. Don't leave the customer without setting up the next meeting
• Prepare for your calls  in advance - make sure you are ready
• Set aside time each week to review your sales activities, measure your results against expectations and confirm your activity plan the for the next week
• Avoid "reflex" reactions to customer requests - stick with your plan. Most of the time it can wait for a day or two

Good selling,
Richard

Thoughtful Thursdays - Happy Birthday Canada

Thoughful Thursdays is taking the day to celebrate the July 1st holiday and will return next week.

Happy Canada Day from everyone at Toronto Business Development Centre.

Have a safe and enjoyable day.

Good selling,
Richard

Thoughtful Thursdays - Did you find everything you were looking for?

I was at a store early this morning and as expected was able to get what I needed and proceeded to the check out. When I walked in I noticed there was a staff team meeting going on, yay! They might be listening to the customers after all.

There was only one oversight, none of the check out lines were open. The self-serve was available, but no one in sight there either. I am not a fan of self serve check out, but as there were no options and I did not want to wait for the meeting to adjourn I did it. Luckily there were no hitches and away I went.

I found almost everything I was looking for today, everything but a customer service representative.

It is good to have the morning staff sessions to set the course for the day, but in the pursuit of excellence in customer service, don't forget the customer.

Image credit

Good Selling,
Richard

Is consignment giving it away?

All your hard work is showing signs of paying off. The prospect is enthusiastic about your product and wants to carry it in their store. They must see the value in dealing with you... or do they really?

The sales process is moving along and you hear the word consignment.

Merriam Webster defines the term 'on consignment' this way: "shipped to a dealer who pays for only what is sold and who may return what is unsold."

What is in it for you as a supplier when your customer shows minimal commitment to carrying your product beyond displaying it? You may not even have a say on where it is displayed. Consignment can be a one way street that does not point in your direction. Managed properly it might work, but in the long run it may be a better policy to avoid it.

If the value of your product has been clearly communicated and understood, there should be no hesitation to purchase it. The commitment demonstrated by your customer in purchasing your product will result in that customer making the effort to turn it over as quickly as possible.

Many times I have seen good products languish in the dimly lit back corner of a store with little or no hope of being sold. I wonder if the supplier is aware that this how their product is being promoted.

It is any retailers ideal situation to have no money invested in inventory. Think about it, wouldn't it be great not to have to pay for any of your materials until you receive payment for them? Reducing costs is important, but at who's expense?

Please note that when it comes to fine art, consignment is a standard practice. It is not this sector I am referring to in this post.

If you do find yourself in the position of going the consignment route here are a few tips that may be useful:

• Contact other vendors and ask them about the store
• Visit stores on a regular basis and see how your product is being promoted and displayed
• If your product is not moving, be prepared to remove or change it
• Build a solid relationship with the store owner(s) and staff, they are your sales people

Good selling,

Richard

Thoughtful Thursdays - Honey, can you pick up the kids?

A common response to the question "Why do you want to start your own business?" is "So I can work from home."

Whether you are self-employed or working for someone else, working from a home office definitely has its advantages. There are also many drawbacks that might result in an unproductive and sometimes frustrating business environment if you have undisciplined and/or unclear communicated work habits.

It is tough enough to work in isolation and when you add distractions that come with working from a home office, it can become very challenging. One of the most frequent concerns I hear about is: "My family thinks that because I work from home, I am home and not working."

Here are a few tips that may be useful when working from a home office:

• Designate work space or an office that is for business only - you live in your home, you work in your office
• Have separate phone and fax lines for business
• Have a separate computer for business
• Set office hours and stick to them
• Schedule regular breaks
• Discuss these business hours with your family and have them respect your need to have uninterrupted work time
• Be clear that you may not have the time to go shopping, cut the lawn or pick up the kids without sufficient advanced notice
• Some find it useful to close the office door when they do not want to be interrupted

It is my experience, with people I have worked with, that those who have barriers to working productively at home have greater difficulty resolving them in the long term. The situation often comes down to not having sufficient space at home to dedicate to the business.

The solution for many was to find an office away from the home thereby making it much easier to separate business and personal activities. Productivity increased as did satisfaction with the business.

Remember that you are still employed when you are self-employed, your business needs you to go to work.

Richard

Image credit: examiner.com

What happened to Wise Wednesdays?

You might have been wondering where Wise Wednesday writer, Dominik Loncar, has been.

As well as delivering Toronto Business Development Centre's Start a Business Seminar series, being Advisor on Call, representing TBDC at Toronto Food Business Incubator seminars, and his business advisor responsibilities, Dominik finds time to be the Creative Director of the annual InspiraTO Festival. The festival has is origins in Theatre Inspirato, founded by Dominik in 2003.

The 10 minute play format, InspiraTO Festival, is now in its 5th year. This year there are two themes consisting of 8 plays each, narrowed down from the over 300 scripts that were received read and judged. The festival venue is the Mainstage at Theatre Alumnae at 70 Berkeley Street at Adelaide Street East.

Click here to read all about this entertaining and thought provoking festival.

Tickets are available online at InspiraTO Festival or at the door. Check the schedule here and make plans to attend.

Break a leg Dominik.

Thoughtful Thursdays - Making the first half

Holy *#?! the first half of the year is just around the corner.

There are approximately 5 billing, weeks to the end of the first half of 2010. How are your sales numbers? This is a good time to look at actual sales and compare them to your forecasts.

At the same time you will want to review your cash flow projections to determine if your expenses are in check.

If you find that sales have been slower than anticipated, there is time to take steps to achieve projected first half profit figures and make the first half.

That is of course if you have financial forecasts to measure performance against... and you do, don't you?

From a new sales point of view focus on identified potential you feel will close within the month. Call your existing customer base and find out if any orders can be expected. This information will give you a good idea if you have a sales gap to bridge.

You do not want to be discovering at the end of June that forecasts would have been achieved if only some financial analysis was conducted a month earlier.

Good selling,

Richard

A Social Media Story - Twitter

It will be one year in June 2010 since Toronto Business Development Centre entered the world of social media on Twitter.

During the first year we learned how to link tweets to our blog, facebook and Linkedin pages.

Recently we tweeted from the TBDC Awards Gala, learned why we should use hash tags, and that using a separate twitter page might not be the way to go - live and learn. We are neophytes to social media but are committed to these channels of communication.

Back to the story. It was not very long before we started to follow tweeters of information related to business, small business and entrepreneurship. We have followed, unfollowed and blocked.

One of the businesses we chose to follow was Distility Branding @1day1brand. Shortly thereafter we received a direct message thanking us for the follow. Follow up communication revealed that Axel Davids, CEO of Distility, graduated from Toronto Business Development Centre 10 years ago.

This led to the renewal of the business relationship that had been lost some time ago and Axel accepted an opportunity to be the featured speaker at our most recent TBDC Entrepreneur Forum.

Subsequently Distility Branding participated in the nomination process for the 2010 TBDC Awards and Axel Davids was announced as an award finalist. On May 5, 2010 at the Toronto Granite Club Axel was presented the Excellence in Innovation Award at the second annual TBDC Awards Gala.

None of these events would have likely unfolded if not for social media, Twitter in this case.

How has social media impacted your business?

Richard

Thoughful Thursdays - Time flies

If you are the sales team for your business you will know that scheduling time can be problematic from time to time. If you are a one person business that is growing, "from time to time" may be quickly become all the time.

No matter what the situation, planning your activities will help you make the best use of your time. How you plan those activities is also important to effective time management.

If you think about it time is easy to measure. A second is a second, 60 seconds in a minute, 60 minutes in an hour, 24 hours in a day and so on and so on. Yet we are always running out of it., whether it is due to cramming too many activities into a specific amount of time or unforeseen events causing it to take longer to accomplish the activities.

Here are a few planning tips you may find useful:

• Schedule appointments at minimum of one week in advance and allow for the worst case in travel time.
  
• Avoid back to back meetings without a break between.
  
• Use the time between calls to write your meeting reports and check and respond to voicemail and email.
  
• Stick to your meeting agenda - that means have a meeting agenda.
  
• Commit to your schedule, if a customer calls and needs to see you urgently, qualify the urgency before cancelling any meetings.
  
• If you are running late or must cancel read this great article from Mark Suster titled The Right Way to Cancel a Meeting.

Good selling,
Richard

Thoughtful Thursdays - Resistance isn't futile

Today's thought is about the realization that your sales cycle may be longer than expected or that you may have to talk to more people than you thought to make a sale.


This realization can be very discouraging and often results in the decision to change marketing and sales strategies that may not be best for the long term sustainability of the business.


One of the easiest ways to sell is on price. Note that the operative word is easiest, not most profitable. Although it may feel like it, your target market is not a Borg-like collective of people or businesses driven to assimilate you into their way of thinking and drive your prices down and resistance is not futile.


Persistence and ongoing commitment to your business will help make it happen. Belief in the value that your product and/or service brings to the table combined with the appropriate promotional and sales activities are also essential components. Getting discouraged is not uncommon. It is how you deal with it that will help determine how successful you will be.

Resist the temptation to lower your prices or offer discounts that will only result in one time sales. If you are giving something up, then set a measurable expectation for a level of return in exchange for your investment.

There are times when it will make sense to offer price incentives, but this must be part of your overall business strategy, not a temporary action that goes against your business plan.

If your activities are producing quality opportunities, the targets have been quantified into real dollar potential and the probability of closing has been determined, then it should only be a matter of time before your efforts begin to pay off. Stick with the plan.

Good selling,
Richard

Thoughtful Thursdays - Looking back on it

Today's thought comes in the form of a question for business owners. It comes as a result of working with many businesses over an extended period of time and really getting to know the owners and their businesses.

The subject of why they wanted to start their own business does come up from time to time. My follow up question comes several months and sometimes years later.

Given what you know now, would you do it again and why or why not?

In some cases the notion of starting a business came as a result of not being able to find an alternate form of work. In others it was a life long ambition to be a business owner. The answer to the question of doing it again does not seem to be dependent on how why the business was started in the first place.

So why or why wouldn't you do it again?

Good selling,

Richard

Thoughtful Thursdays - Is your business documentation in place?

Today's thought is directed towards, but not limited to, entrepreneurs in the start up phase of their businesses. It is often a task that gets taken care of after receiving the first order. Do you have all the necessary documents in place to process the order?

The downside of not being prepared can have disappointing consequences. These can vary from a lengthening of your your sales cycle to not being paid for products and/or services provided.
These consequences may be it is avoided with some forethought.

It is great to get the first orders, it is also beneficial to have a flawless transaction.

Do you have what you need?

• Applications for establishing credit
• Sales agreements
• Certificates of compliance
• Material Safety Data Sheets
• Instructions for use of the product
• Estimate forms
• Order forms
• Invoices
• Packing slips
• Bills of lading
• Customs paperwork
• Purchase orders
• Delivery receipts
• A way to keep it all organized

As basic as it may seem, it is surprising what is forgotten and left to chance. Be sure of your processes. In closing, it is also a good idea to test your processes before taking them live.

Good selling,
Richard

Thoughtful Thursdays - Crunch the numbers

This week I read and enjoyed a recent post on Sant's Messages That Matter titled Overcoming the Fear of Value, where the fear is identified as "value paranoia".

I strongly agree on importance of quantifying the value proposition and how critical it is to shortening the sales cycle.

If you can not place a dollar value, or propose a process to calculate and measure this value with your customer I expect you do not yet have enough information to advance to the proposal stage of your sales cycle or for some reason you are not ready to be accountable to your customer.

Whether you are providing a product or service, the value can be calculated and expressed as a dollar value or a percentage.

If your product can save production time, you can estimate annual savings based on time saved multiplied by hourly production costs.

A service offering may require a more collaborative effort to establish mutually agreed to metrics and a baseline to compare measured results, but you can still convert this to dollars and cents.

Also be mindful that there is a cost to taking on a new vendor. Setting up a new account, adding new SKU's or raw material numbers, modifying manufacturing orders are all tasks that require resources. The value you bring must take this into account as well.

Take the time to quantify the value, and the chances of a successful close will be significantly increased.

Good selling,
Richard

Thoughtful Thursdays - Why Leave YOUR Money on the Table? - A Rant for Canadian Small Business Start-Ups

Today's thought is more of a rant.

It always puzzles me when an owner of new small venture, operating as a sole proprietorship, resists setting up a basic business infrastructure at the outset. To be honest it really disappoints me when I hear the excuses. Here are two I have heard more than once.

• I'm waiting to get my first order before opening up an account for the business
  
• I don't have to participate in the GST, my sales are or will not be $30,000 a year

In my opinion, both are signs of a lack of commitment to the business idea. I have a lot of difficulty getting my head around the first one and the second is a huge red flag.

I agree that if your sales are below an annual rate of $30,000 the Government of Canada says you do not have to participate in the Good and Services Tax. What kind of message does that send to the customer? They aren't stupid, they will know you are a very small business and chances are you may not be around for long, especially if you expect the business to be self-sustaining. What is worse is that you are probably leaving money on the table - your money!

And what about HST? It is coming July 1, 2010.

Unfortunately many of the people that fall into this category are the ones who can least afford to throw money away, not that anyone can. Perhaps you think you are doing your customers a favour? You might be, but why at your expense? What happened to your value proposition?

If you are serious about starting a business and are thinking of not setting up a proper infrastructure for any reason, think again. Would you plant a garden, not water it and expect it to flourish?

Good selling,
Richard

Thoughtful Thursdays - What is sales?

Today's thought comes from a higher level view of sales. Rather than talk about tactics let's consider what sales actually is.

We know that the goal is to make a sale, but what does the sales process do?

It is described by many as the process that converts prospects to customers. I can not disagree with this; a successful close accomplishes exactly that. Depending on the business, this can take minutes or months, but this does not really answer the question posed.

Doesn't the sales process in fact facilitate another process - the buying process?

To facilitate is defined by Merriam-Webster as verb meaning "to make easier", or "help bring about." It then follows that sales is a process that helps others make a buying decision easier.

A learned colleague of mine allows me to use his words: "Stop selling and start helping."

Never forget that you are there to help make it easy for your prospect to say "yes" and craft your sales approach accordingly.

Good selling,
Richard

Thoughtful Thursdays - Following up is a matter of peristence and determination

In the early stages of the sales cycle, an incredible amount of time can be spent just getting in contact with the right people. Frustrating and discouraging as it may be, following up is a necessary step in the sales process.

Knowing when to follow up is just as important as the action itself. Leave it too long and you might find yourself having to start the sales cycle all over again. Too early and often can lead to ticking off your prospect. So when is a good time to follow up?

Depending on what you are following up on, the timing may be different. A rule of thumb that I use is one business week - no longer and sometimes shorter. If you are following up on a voicemail I would call again within 2 days.

What ever the case, the easiest way to avoid the worry about timing for the follow up is to set it up and communicate it in advance. If you have left a voice message, include when you are going to call back. If it is a letter, state when you are going to follow up. Be sure to do what you said and you will begin to develop trust with your prospect - you are following up on your commitments.

Never assume that your message is not being heard or your letters are not getting read. If you doubt your market research (identifying your target market) on the basis of not being able to get in contact with your prospects, you have successfully sold yourself out of a possible opportunity with unsubstantiated, but perhaps convenient untruths.

As I have said in previous posts, do not let yourself talk yourself out of doing what you know you should be doing. Leave those activities for your competitors to master.

Following up with confidence in the value you are representing will pay off.

Good selling,

Richard