Others sell you better than you do

The first couple of years in a business are tough. Every customer is hard won. You have to actively market, make hundreds of phone calls, overservice you customers, work on relationships with your suppliers, and the list goes on.

There is a natural point somewhere in the second or third year where word of mouth about your company brings in sales. It is really wonderful to start getting cold calls from potential customers.

The key here is that word of mouth sales are important.

• Satisfied customers will sell you just as well, if not better than you will sell yourself. They have their own network of friends and contacts who will see and hear what you did.
• Family and friends will often actively promote you.
• Old work colleagues may mention your company as a potential supplier to people they know.

One of the really interesting things is that they will often effectively sell you through describing your company in quite different terms to how you do.

Think of all these people as your cheer squad. Encourage them. Give them updates. Actively ask for help. You might be amazed how many people will give a little time to help you out.

The perils of changing your brand

A few weeks ago I couldn’t find my normal brand of muesli at the supermarket and had just grabbed a different brand to try when my wife pointed out that it was still there. The packaging had just been changed from a plastic packet to a cardboard box. Something so simple made it invisible to me.

Your logo and packaging are the most obvious parts of your brand. Advertising, messages and your underlying values and mission are less obvious but just as important.

When you change your brand radically people can stop buying your service. The old advice is to keep the visual devices substantially unchanged. Incremental updates are find, but don’t be radical no matter how tempted you are.

Revamp your brand through the quality, price or service. Try advertising more. Try expanding to new geographic territories. Try online sales. Try anything you can think of to increase sales – but, whatever you do don’t mess with your brand.

Builders go bust in a boom

Rapid growth is a wonderful thing – it is vindication of all your work to date. Your customers like your product, they are signing up and now you can grow as you planned, and make a profit too.

Here’s the thing – this is the part where you lose direct control of quality.

Builders go bust in a boom for a very simple reason – extra costs.

They no longer have the time to carefully select and train their employees, so they are trusting on the existing knowledge and skill of new employees.

• They don’t have necessary processes in place to cover the change in control.
• The owner’s may become the bottleneck on time critical decisions.
• They don’t count on the loss in productivity resulting from the extra process.
• They don’t count on the costs of going back and fixing up work – at their own time and expense.

Have you gained some of your new business through lower price? If so, then you may have to rethink your margins for the uncertainties of rapid growth.

Employees don’t think like you

As a business owner you are trying to do a number of things. You want to build a successful brand, however, you need to make enough sales to get the cashflow to fund it. You are looking at how to make things easier for your employees, how to make things easier for your customers, how to grow, how to minimise costs, and so on.

Your average employee just wants to be paid. They want to do the best that they can given the circumstances. 

Your best employees will try to help you with the big picture. Your worst employees will avoid doing as much work as possible. You need to plan for the average employee, get rid of the worst employees and hope for the best.

Make your business easy to understand. Give appropriate delegations and discretion. Most people like to help others – this energizes them and motivates them to try harder and also means that they are likely to stay with you for longer.

Understand your employees motivations and get the best out of them instead of being permanently disappointed.  

Beware armchair generals

Everyone in a startup needs to be contributing, not criticizing or commentating.

Your main managers need to do more than simply plan and supervise, they need to be able to do. Management is only a part of their job.

Funders who understand the industry and can help open doors and provide sage advice are welcome. Funders who are out of touch with the industry or made their money from another industry should not have any day to day control over the activities of the corporation – they will have limited understanding of the issues you are facing and may well be a destructive force.

Board members likewise should be key employees, key funders with experience or people who bring industry specific knowledge to you.

The last thing you need is an organisation of people all telling each other they should do their jobs better, but none of whom actually knows how to do anything.

Encourage solutions not criticism.

Stop being busy –be productive instead

Experiments have shown that when animals are faced with a choice of doing an activity to earn an meal rather than eating a meal with no activity required, then many animals will prefer to do an activity first (obviously the domestic dog and cat may not fit this).

We humans are no better - preferring to be busy is hardwired into us. It is educated into us.

When you are busy are you actually being productive. You might feel satisfyingly exhausted at the end of the day but did it actually do anything for your business at all?

If you can keep your focus on what is necessary for the business then you will get better at being productive.

Take one for the team

As the business owner or manager a big part of your job is taking care of the bigger issues – fund raising, setting direction, maintaining discipline, hiring the right people and so on.

You need to communicate with your team as much as you can – however, there is a fine line between communication and transmitting uncertainty and despair.

Take one for the team and keep them away from a lot of the day to day big picture uncertainties. 

This is definitely not advice to lie or spin. This is about not giving blow by blow details of what you are going through to your team.  

Confusing process for business

Registering a company and business name -this is process.

Registering for tax, organising employment contracts, obtaining insurance – this is process.

Procedures for how to do work and to make decisions – this is process.

Process is not business.

Business is selling a product that customers want.

Business is finding ways to sell more product – and take market share from your competitors.

Business is about identifying opportunities and then leaping at them with everything you’ve got.

Process helps business  and is often necessary– but it is not the business.

You don’t need an MBA to do business

An MBA is a great degree to do. It covers the basics of the whole gamut of issues facing a business and teaches you a system view of the world.

Modern society has built the MBA up to such an extent that now many people believe that you can’t do business if you don’t have one. Somehow, it’s become like a drivers licence – if you don’t have one then you can’t drive.

The MBA was originally set up to teach technical people business skills as they moved into management. Flip that on its head – it helps teach smart people who work in big organisations what business is about because they aren't exposed to it in their normal jobs.

The time honoured way to learn about business has always been to do business.  Get out there. Treat each investment as a bet and bet only as much as you are comfortable losing. Go and learn.

Stop obsessing – chill out a bit

Worrying is normal. People who don’t worry are not normal.

When you can’t stop worrying or thinking about an issue that is out of your control then that is obsession. 

Obsession to the exclusion of all else is damaging.

Most of the outcomes of your business are out of your control. Ultimately all you are trying to do is to put your products in front of potential buyers at a price that they are willing to pay.

So when you are faced with a situation that is out of your control try and face the issues that you do have in your control – or even better yet go play instead. It’s okay to chill out a bit.

Follow up or harassment

There is a fine line between following up your leads and leaving them feeling harassed.

Put yourself in their shoes. They are busy doing their own work, and if dealing with you was urgent then they’d follow up quickly.

• Do follow up – give them a week or so to get round to it.
• Don’t call every day.
• Do agree to a time to follow up.
• Don’t let your anxiety bleed through into your conversations.
• Don’t sound needy – and especially don’t beg
• Do assume that you are still in with a chance.
• Do understand that they’ve got other priorities – ask them how you can best slot in.
• Don’t put all your hopes in one lead – you need as many as possible.

Success breeds success

There is nothing more disheartening than never achieving your goals. Morale is sapped, you run out of energy and there is a distinct lack of enthusiasm.

Try breaking up your plans and ambitions into bite size chunks. Then when you succeed in each step you can celebrate its completion, and you will be able to see steady progress in your journey. You will also have more energy and enthusiasm for the next step.

If you only look at the end objective then you will likely feel overwhelmed.

When you have a more positive outlook and are succeeding you are more likely to succeed at your next task. Also, clients and customers will see this about you and will also be happier to work with you and buy from you.

Look like an established business

Everyone likes to back a winner. Do you look like a winner?

Procurement departments at many companies will look at how long you’ve been in business, testimonials from other clients, the size of work undertaken, number of employees, etc.

To procurement a winner is a company that has established itself in the services or products they wish to buy. They don’t want to go through the learning curve with you, unless your price is cheap enough.

Tips are:

• Your address should be in a business or industrial district – and you can rent virtual addresses. You can be as successful as anyone else, but if they see your home address as your office you will be judged.
• Logo/branding should be professional – don’t go cheap in establishing this.
• Have a great website that at a minimum offers much of the same information as your larger/established competitors.
• Use your company email address – not Gmail or the like.
• Have brochures, testimonials, etc. ready to hand out.
• Have all the sales material/ordering information ready at hand.
• Have contracts, confidentiality agreements, etc. prepared and reformat to your  branding if required.
• Do accept electronic payment of funds.
• Have prepared forms to fill in when visiting clients.
• Develop procedures as necessary and refer to them.
• Last but not least, always mention your company’s ability to deliver, not your ability to deliver.

Good salesmanship

Spending half the day at car dealers test driving cars on the weekend was a good reminder on the difference between a good salesman and what people think a salesman does.

The first car salesman was almost totally silent and relaxed.

No push, no sales patter, no annoying questions about what job you have to try and work out how little discount he could give.

Yet, he did everything at the right time. Without question or fuss he took us out in whatever car we wanted and let us go where we wanted. When we got back he quietly asked if we wanted to know what was available in stock and a price comparison between the new model and old. 

Simply put he realised the old maxim that the customer sells themselves. All he can do is provide any extra information and then ask the right questions at the right time. No ticking clock “take the deal, it’s a once only offer” routine. He made it easy to buy.

Listen to your potential customers. Are they seeking you out? What kinds of questions are they asking? What can you do to make it easy to buy? Do you have standard contracts? Do you have reasonable explanatory material? Do you have clear options spelled out and priced? Does your website provide enough information for them to make a clear buy decision and distinguish you from your competitors?

So stop selling and make sure you get out of the way when a customer is trying to buy.

Don’t be paranoid

Why don’t they return your calls?

You send in a quote and you don’t hear back for a week. What’s happening, have they rejected the offer and not come back to you? Do they think your price is too high but they aren’t willing to negotiate?

It gets worse. Every day you don’t have paying work your credit card debt goes a little higher. Your friends are telling you that you look so stressed they are worried about your health and suggest you just give up and get a job. The deafening silence from your partner in life about ability to pay the mortgage turns into yelling at you to do something. This just makes you feel worse.

Now you are focussed on the meaning of every conversation you have, every email you receive, every time you don’t hear back from someone.

Welcome to the anxiety and paranoia that goes with a start-up. This means you are a normal human being.

The main emotion you are going through is feelings of ostracism – now recognised as one of the most powerful emotion.

When you are having really paranoid days – and they do happen – take time off. Recognise the anxiety you are carrying and let it go. Don’t ring people up to have it out with them. When your employees are annoying you – let it go. Your attitude is such that you will cause permanent damage to your relationships.

Also, remember what it was like when you were on the receiving end of calls from people like you. You meant to respond, but a week or two goes by with all sorts of busy work before you remember, and sometimes you forget to respond all together. People aren’t usually mean. Relax, and gently get back in touch later.

Bundle up

When deciding how to sell your products or services it is instructive to look at how you buy or relate to your own purchases.

Cars come in different levels of fit out and engines. The best engine is often bundled with the best fit out. There are optional extras and aftermarket or dealer options too.

Pizza comes in different varieties – you can add extra ingredients as you see fit.

Bundling is important. For you it means that you can sell a minimum value product or service, preferably for a fixed price. It also doesn’t scare off the customer with excessive choices and helps with the purchase decision.

Look at your own industry and markets when choosing how to bundle your products.

However, don’t be so rigid as to take a one size fits all approach as that can put off repeat buyers.

Bundle up!

Fire needy clients

You know who I am talking about.  Fourteen emails a day, most of them emails asking if you got their last email. 

They second guess every decision. They change their minds after the decision was made, and then expect not to pay the extra costs incurred.  Every decision point takes too long. They want to talk to you about every aspect of work.

You like helping people like this as you feel you are achieving something by helping them learn how your service or product works. There is satisfaction in helping the needy. Unfortunately there is little profit.

If your customer is a first time buyer then a little neediness is normal so package up your service to minimise choices and interaction. If this is a repeat offender then unless you like spending 80% of your time helping out your least paying customer then fire them.

Business is about contractual arrangements. Don’t form new contracts with the truly needy or difficult clients.

Sell a product not your time

You have been taught all your life to sell your time. Go to school, go to college or university and you are taught the skills necessary to get a good job and work.

When we are sick of normal paid work we go contracting and again sell our time, but for a higher price which is commensurate with the risks we are taking.

As your business understanding evolves you may then move towards a fixed price service which allows you to bring in other people and equipment. This is a good start.

Making a product that can be sold, exported, downloaded or whatever is ultimately what helps you grow the most. Yes, you are in many ways repackaging other people’s time to make a product, but the point is that you move away from selling yourself by the hour.

It’s time to sell a product.

Take it personally

Failed to make the order you were chasing – then get pissed off.

Failed to meet the deadlines you promised – then get upset.

One of your key staff left – work out how to never be held hostage to a key staff member again.

A competitor just took one of your clients – time to go ballistic – go take one of theirs.

Not growing as fast as you expected – your feeling of failure will spur you on.

Succeeded against the odds – time to party – go and celebrate

Doing better than expected – reward yourself and your people.

Take it personally – the highs are what keeps you in the game and the lows teach you how to do things better.

Stop being embarrassed

A lot of us start our business by helping someone do what we do for a living. To you it is relatively straightforward. You may even think it is easy and don’t understand why someone would pay for what you can do. You may even be too embarrassed to charge for your services.

Flip that around and think of all the products and services that you buy. For me one of my big frustrations is the ever growing complexity of IT – linking up email servers, data servers, a customer relationship management system, online sales, payments, smartphone linkages, etc.  I am now more than happy to pay for someone to come and sort all that out for me and free me up from trying to do all my own IT services.

Likewise, many of your clients are more than happy to pay you to do what you do. They don’t have the time to do it themselves and they aren’t employing you full time – you offer them a transactional relationship – dollars to solve their problems.

Is a farmer embarrassed to sell a tomato that you could grow yourself in your own garden?

So stop being embarrassed and accept that if there is a market for what you do then you are helping people out. Charge them for it!

Learn to say yes

In our normal lives we find ways to politely refuse requests. There are many valid reasons, you don’t have time, you don’t have the energy, it would get in the way of other things, you don’t feel you can do a good enough job, you don’t like the person asking, and so on. There is no end to the list of reasons for saying no.

Now you need to say yes. Yes to opportunities – no matter how scary. Yes to employees asking to be trusted. Yes to clients who want your help even when you don’t have enough resources. Say yes to overtime. Say yes to working on weekends and in the evenings. Say yes to interviews. Say yes to invitations to speak publicly. Say yes to investment opportunities.

Just learn to say yes. 

Procedure free workplace

Procedures are great for bigger companies. They allow for consistency of decisions and operations. However, the main reason for procedures is that beyond a certain number of employees the senior management can’t keep control anymore. In other words procedures are enforcing a lack of trust.

As a startup ditch the procedures – your focus is on product and sales. A strong focus on procedures takes away from productivity and reduces moral in the workplace.

Writing procedures also takes up your valuable time which would be better spent on sales – actually making money.

Put in procedures only as necessary as the company grows (e.g. for legal compliance) – and even then keep them as guidelines which rely on the judgement of the people working for you.

Monopolies are lazy

Never be afraid to take on big companies. Sure they are profitable. Sure they have a good brand name and clients think of them first.

On the other hand you can almost guarantee that they are inefficient, hidebound, buried in procedure and slow to respond to changes in the market.  The more employees you have the more the inefficiencies, the higher the overheads.

To beat them just be more nimble, more responsive to the client’s needs, fill the gaps that they don’t fill, offer better value for money.

The great thing about taking on the big companies is that you know that there is a good market there, otherwise how did they get so big.

Go take some of that market.