Selling Your Way to Profit
Google “How to sell?” and you will get millions of sites and articles. So I am not going to pretend that this is the best or even the definitive article on successful selling. Some of the items are pretty basic but you would be surprised how many entrepreneurs start a business with no selling skills. I hope one or two items provide an idea you can use.
1. Know your product or service.
Before you even have a preliminary conversation with a prospect, it is essential that you clearly understand what attributes make your product or service unique or desirable. Why should a potential customer want what you have to offer?
2. Make initial contact.
The actual sales conversations with people in your target market begin when you start letting them know you, and vice versa.
3. Exchange information.
This step consists of meeting with your prospects, and asking them questions, uncovering their needs, giving them information about your product or service, and determining how it might fill those stated needs. Don’t be afraid to acknowledge gaps in your knowledge or understanding; such sincerity comes through in a positive way.
4. Propose a solution.
Once you have ascertained that there is a good fit between you and the prospect, you can propose how your product or service would specifically solve a problem or handle a need. By understanding the features and benefits of competing products or services you can also prove at this point how what you offer is better.
5. Confirm the sale.
Rather than focusing on “closing the sale” a term that indicates the end of the process, confirming the sale means you are reviewing the customer’s willingness and ability to make a commitment. It is a natural extension of a sales relationship built on a foundation of trust, respect, and rapport.
6. Deliver.
Although actually delivering your product or service is not technically part of the sales process, it is a very critical step. If you don’t deliver, you don’t have a sale. In addition, during this step you have an excellent opportunity to continue to build trust and cement your relationship with your client.
7. Follow up.
This is the time to find out how your client likes your product or service. This stage provides an ideal chance to create repeat business or get referrals to new prospects. And if there is a problem, you have an opportunity to correct it.
These are some practical and effective steps to selling your product or service. Personal selling is as important as ever. The much-maligned car salesman is still moving the vast majority of new cars, despite carmakers’ efforts to sell online. You can have the best designed product, the most unique service, the highest quality production, but if it can’t sell, you have nothing.
Focus on Your Strengths to Improve Profits and Revenue
The conventional response to today’s lackluster economy is to focus on cutting business costs. That’s good advice up to a point, but eventually paring down becomes counter productive. Once you are done, you are still stalled in the same economic doldrums.
Rather than restricting your strategy to cost-cutting, try playing to your strengths. What product, service, or other customer benefit do you offer that goes beyond the norm? Think about ways to build upon and expand that benefit, and then communicate it to current and prospective customers. If nothing you offer is out of the ordinary, improve your services or offer a new service that nobody else provides.
What makes you stand out? Look at your firm through your customers’ eyes. Why do they do business with you instead of your competitors? Is it the exceptional quality of your products or services, lower prices, inventory selection, peripheral services like delivery costs or frequency, your helpful and knowledgeable staff, a convenient location, or some combination of these reasons? Even if you think you already know the answer, double check with your customers. Ask what they like about doing business with you and what additional features or changes would enhance their relationship with you.
Play to your strengths. Once you have identified your customers’ wishes and preferences, focus on your strengths. Discontinue products or services that are indistinguishable from your competition or that generate more problems than profits. Instead, emphasize or expand your existing areas of excellence. Promote activities that enhance productivity and/or reduce bureaucracy.
Should You Start a New Business in 2013?
If you have ever wanted to open a new business then 2013 might just be your year. Many people have taken career paths where self employment is a natural progression. You can have a great idea such as the Frisbee, a talent such as an artist, or a skill like a physician. Whatever the situation, you want to be your own boss. This is a good thing. Small business drives the economy; every business, whether the local dry cleaner or Dell Computer, was started by someone like you. Before you quit your day job and take the plunge into entrepreneurship here are 10 thoughts to consider.
1. Do you have a passion for what you are going to do?
You will need to bounce out of bed each day, self motivating yourself to accomplish a daily work plan to achieve daily goals. You will have to take action solely on your own volition. There are hundreds of things that won’t get done unless you do them. As your own boss, that zone out hour to work on your fantasy football team will be a thing of the past.
2. Can you delegate and accept advice?
Running a business requires the performance of dozens of simultaneous tasks, and it’s foolish to try to handle them all yourself. You must surround yourself with partners and employees whom you can trust to perform these tasks as you would yourself. You will need to be able dish out responsibility without worrying over the result. You will need advice and counsel from experienced business people to guide you as the business grows.
3. Are you ready to work harder than ever?
Starting a business is easy, right? Wrong! If you think working for someone else is hard work, try starting your own business. You will be required to give every ounce of blood, sweat and tears you can muster. You will have to work long hours and be on call 24/7, at least in the beginning. You think you can take a sick day or a vacation? Who is going to run the business?
4. Are you customer focused?
You are the customer satisfaction department and problem solver. As an entrepreneur, you will understand the cliché “The customer is King or Queen!” Can you figure out how to appease your customer when the shipment from Chicago gets delayed three days because of a snowstorm? Be polite to people and living by another cliché “Treat people as you want to be treated” will make being customer focused the center of your business model.
5. Can you sell?
Every business needs to sell a product or service. Without a sale, there is no way to make money. Even though customers are the lifeblood of every business, you’d be surprised at how many entrepreneurs hate this aspect of doing business. Do you cringe at the thought of cold-calling (walking into a business and asking to speak to the owner)? Can you pick up the phone, call a prospect and ask for an appointment without breaking into a cold sweat? If you are not comfortable selling, you should keep your job or look for one.
6. Are you a forward thinker and detailed?
According to the Small Business Administration, two-thirds of new businesses survive for at least two years, and only 44 percent survive at least four years. They fail because they do not plan. You will need to write a business plan and do financial forecasts even if you do not need funding.
7. Can you handle rejection?
If your feelings are easily hurt, work for someone else. Many days in business, rejection waits around every corner, and you must be able to handle rejection without letting it beat you down. You will experience rejection from customers, business partners, bankers and investors, just to name a few.
8. Do you interact well with others?
Being a business owner means that you will have daily interaction with a variety of folks, from your own employees to vendors to customers to investors. You must have the ability to manage people effectively without offending them; the ability to accept good advice from mentors and politely discount the bad; the ability to overlook mistakes or quietly rectify them; and one of the most difficult: the ability to tolerate incompetence without losing your cool.
9. Do you have financial backing?
You have a great idea or service. Your business plan is perfect. You might feel there is no way a lender can turn you down. The reality is that most lenders want a proven concept and during these times the lender will want you to answer this question: “Should your company go under, how to I get my loan back?” Before you start your business, you should have enough capital to see you through the first year or until the business can sustain itself. So be prepared to sell the boat, your jewelry, or ask Aunty Anne for a loan (and get the terms in writing).
10. Do you have experience in the type of business you plan to start?
If you can’t locate your car’s engine, you have no business buying a Lube-N-Go franchise. The most successful business owners have prior experience in the industry in which they have set up shop. And here’s one extra tip to consider-
As mentioned earlier, you are the customer service department, but also, the marketing planner, the accountant, the inventory control specialist, the head of HR, the chief copywriter, and the sales strategist. If you need help in any area consider a business adviser to walk you through the maze and do some of the work for you.
At the end of the day, if you have what it takes to start your own business in 2013, then I strongly urge you to jump into the entrepreneur pool with both feet.
Reducing Business Overhead: How to Fight the Battle of the Bulge
You may not realize this, but one of the best opportunities for your business to increase the bottom line can be found by reviewing its overhead. These expenses, consisting of mundane but necessary essentials such as office supplies, utilities, interior decorations, credit card processing, and insurance, each have their own unique savings opportunities. Business owners and managers often get complacent and let these recurring items grow over time; eventually bloating their company’s overhead costs. So, how do you harness these potential savings opportunities to fight this overhead battle of the bulge?
Consider these practices as a way to cut your costs.
- Get new bids from vendors in such competitive industries as credit card processing and shipping. They’ll be eager for your business, thus allowing you to negotiate better rates on these items.
- Review insurance policies that may need updating. As the circumstances of your business change over time, it is important to determine if you are over-insured or if certain types of coverage are not needed anymore.
- Learn to buy strategically. Many common items used in your business can be purchased at deep discounts through wholesale clubs or trade associations which usually have pre-negotiated discounts on many goods and services.
- Develop a cost reduction mindset and discard the flawed notion that profitability only comes through a sales-oriented strategy. Sales are important but know how your overhead costs affect margins. While it may seem as though reducing overhead would be an admiral goal, you must examine the effect of that reduction. If reducing overhead reduces sales, then it is counterproductive. But if you can demonstrate that an overhead reduction will produce the same or higher level of sales, the reduction is justified.
- Involve all employees. Those employees performing day-to-day tasks are often better equipped to spot money-saving opportunities. Offer cash or time off rewards to motivate employees.
Learn to be prudent and resourceful in managing your overhead, and you’ll see immediate results in your bottom line.
A Seven Step Marketing Plan
Every small business should be in the beginning stages of developing a business plan for 2013 by now. If you haven’t started the process to set goals, action plans, employee accountability, and timetables, then you’re like the blindfolded archer shooting at a target.
Part of the business plan is a marketing plan that looks back at what worked and didn’t work in 2012. Taking these aspects into consideration, what improvements in your marketing need to be done in 2013 to improve and grow?
You can develop a simple yet definitive marketing plan by answering these 7 questions:
1. What is the purpose of the plan? Define the purposes of your marketing plan and how are you going to achieve them. Maybe it is to increase awareness of your location. Possibly the marketing plan wants to grow a new niche product you are selling. It can be as specific as to provide awareness and reach a certain dollar sales goal.
2. Who are you trying to reach with your marketing efforts? Determine your target market. Believe me when I say it is not “everyone”. As a small business owner you should have a well defined target market. Even if you just sell on the web, your target market is not everyone on the web. Maybe you don’t ship overseas. Maybe only people who fish want to buy your rods and reels. You have a limited budget, so limit your audience.
3. What is your niche? This can be things like your expertise, efficiency, exclusivity, customer satisfaction, loyalty, or a unique buying experience. A question within a question to help you determine a niche is “We want to be known as…?”
4. What are the benefits and competitive advantages of your product or service? The customer wants to know “What’s in it for me?” A marketing plan should be focused on helping the sales team sell benefits, not features. A self cleaning oven is a feature. You don’t sell features; you sell benefits. So the benefit is convenience.
5. What do you want your identity to be? This is a visual expression of your company including the look, feel, color, and logo. Anything that meets the senses of your customers can convey your company’s identity.
6. What are your marketing weapons? Some examples are print advertising, television, the web, public relations, etc.
7. What is your marketing budget? The total should relate to a percent of sales it is expected to generate. Each marketing weapon defined in #6 should have a budget.
Finally, your business plan and your marketing plan are living documents. Revisit them and refine them. One constant question you and your team will answer in all of this is “What can we do better?”
Building a Referral Base
Luck is never the usual influencer in getting referrals for your business. It is your loyal customer base that is going to generate the “word of mouth” advertising that so many new business owners base their marketing plan around. As a side note, if your only marketing plan is “word of mouth advertising” when you start, go look for a job!
The first step is to let your customers know you are open to referral business. This can be done through comment cards, survey forms, or other written forms of communication. If you email monthly advertising specials then ask for a referral.
In a lot of cases your customer might be asking “what’s in it for me?” To entice the customer for a referral be prepared to give a discount or rebate to them. If you have a sign up sheet to get information in your store, then add a column that is labeled “referred by”. Use this column to always, personally, thank your loyal customer who referred someone to you.
Develop relationships with “influencers”. Who are these people? They are people and businesses that have direct contact with your primary prospects and can send them your way. If you own a yoga studio an influencer might be the local health food store. If you are a home inspector an influencer would be the nearest real estate agent. Marketing to influencers can be as important as marketing to your target customer.
Building a referral network is a very personal marketing tactic. You need to keep in contact with these people. The major influencers should be met one on one and your customers who refer others to you can be emailed, faxed, or phoned. They can be personally nurtured by acknowledging them when they come into your business. As mentioned above make sure you personally thank them if they sent a customer to you. Set up a referral database and schedule activities with them just as you would your customer database.
One item that goes by the wayside is making sure you treat someone who was referred as a special customer. If they have a problem they will definitely tell the person who sent them to you and chances are you have just lost two customers. So give them special attention.
Establish a complete referral marketing plan and that “word of mouth” advertising might just become a part of your overall strategy and lower your marketing costs.
How to Start Small Business- 7 Items to Consider
If you search for the topic “items to consider when starting a business”, Google will return 19 million choices to click on. Some have sites 50 items listed; some have 5. This does not count the numerous ads for How to Start a Business, Why Start a Business, etc. I think every entrepreneur has advice for the business start up, and your humble author is included in the group!
Let’s assume you have gotten the entrepreneurial spirit. You know there will probably be no vacations or sick days for at least 2 years. You admit to yourself you don’t know everything about running a business. You know that you will have to invest a good portion of your life savings into the business. After knowing all this you decide to move forward.
Here are some basic items to consider and research as you grow into the Grand Opening:
- Take advantage of free seminars or inexpensive classes where you can learn about business disciplines you will be required to know as an entrepreneur. If you know marketing and don’t know about taxes find a tax seminar. If you are an accountant find a free selling seminar. Sources can be your local Small Business Development Center (search SBDC) or the Community College. My local Community College offers an inexpensive Quickbooks course over 3 nights.
- Determine there is a demand for your product or service. Then find out what will make your business unique. Put down on paper why you are qualified to run this business. Finally be able to describe all this in 50 words or less. Doing this will help you present a logical, concise description of your business to investors and marketing advisors.Know everything there is to know about your competition. Know their pricing, marketing, the layout of their website, customer retention policies, etc. You need to define their advantages and disadvantages to form a plan to compete against them. This will help you define the uniqueness of your business.
- What will your business entity be? Common forms of business entities are a sole proprietorship or a Limited Liability Company (LLC). Research what the differences are. Both are very simple to form but the costs are very different.
- Develop a name for your business. Here is something to consider. If you are going to have a website, make sure the URL is available that will tie into your business name. For instance, if your business will be called The Clear Spot, make sure “theclearspot.com” is available as a web address. If it is not available, think of changing the business name. Obviously, there is some coordination required in securing the name of your business.
- Stay legal. Do you need a sales tax certificate? Will you have employees or contract workers? Will you need an Employee Identification Number (EIN)? How often will you need to pay taxes?
- Do a cash flow forecast and find out how much cash will be required to get the business thorough the first year of operations. Where will the cash come from?
- Most important of all, remember that planning is everything! Once you open, all you should be thinking about is “How do I get the next sale?”
This is not the most extensive list out there but it does cover some basics for the start up entrepreneur. There is no magic formula for success because no matter how hard you plan, some businesses will prosper and some will fail. But you can increase your chances of success by planning to avoid the pitfalls of failure.
What Kind of Financing is Right for Your Business?
Most businesses need financing. Unless you won the lottery or inherited a fortune most people start a business with either their own funds or a combination of their funds and financing. Even an established business needs financing at one time or another.
Cash flow is different than profits and profits do not guarantee money in the bank. Entrepreneurs need financing for inventory, payroll, expansion, develop and market new products, to enter new markets, marketing, or moving to a new location.
Defining and selecting the right financing for your business can be a complicated and daunting task. Making the wrong deal can lead to a host of problems. Understand that the path to getting financed is neither clear nor predictable. The financing strategy should be driven by corporate and personal goals, by financial needs, and ultimately by the available alternatives. However, it is the entrepreneur’s relative bargaining power with investors and skills in managing and orchestrating the finance drill process that actually governs the final outcome. So be prepared to negotiate with a financing strategy and complete financials.
Here’s a brief rundown on selected types of financing for commercial ventures.
Asset-Based Lending
Loans secured by inventory or accounts receivable and sometimes by hard assets such as property, plant and equipment.
Bank Loans
A loan that is repaid with interest over time. The business will need strong cash flow, solid management, and an absence of things that could throw the loan into default.
Bridge Financing
A short-term loan to get a company over a financial hump such as reaching a next round of venture financing or filling out other financing to complete an acquisition.
Equipment Leasing
Financing to lease equipment instead of buying. It is provided by banks, subsidiaries of equipment manufacturers and leasing companies. In some cases, investment bankers and brokers will bring the parties of a lease together.
Factoring
This is when a company sells its accounts receivable a a discount. The buyer then assumes the risk of collecting on those debts.
Mezzanine Debt
Debt with equity-based options, such as warrants, which entitle the holders to buy specified amounts of securities at a selected price over a period of time. Mezzanine debt generally is either unsecured or has a lower priority, meaning the lender stands further back in the line in the event of bankruptcy. This debt fills the gap between senior lenders, like banks, and equity investors.
Real Estate Loans
Loans on new properties-which are short term construction loans-or on existing, improved properties. The latter typically involves buildings, retail and multi-family complexes that are at least 2 years old and 85% leased.
Sales/Leaseback Financing
Selling an asset, such as a building, and leasing it back for a specific period of time. The asset is generally sold at market value.
Start-Up Financing
Loans for businesses at their earliest stage of development.
Working Capital Loan
A short-term loan for buying assets that provides income. Working capital is used to run day-to-day operations, and is defined as current assets minus current liabilities.
It’s always better to get by without taking on debt. But on the other hand, most businesses need to acquire financing at one point or another. A home office is less likely to require financing than a business location that you rent. A one person operation is less likely to need financing than one with employees.
When you do need the financing, remember to examine all avenues of financing open to you and scrutinize the terms of all the proposals.
Website Personalization- Is It Right For Your Business?
In the world of Netonomics, getting to know your customers can be critical to survival or failure. Building relationships online can be derived from traditional retail marketing strategies.
Your site can build a profile of each customer via questionnaires or tracking their clickstreams. The information is stored in a database and is used to identify patterns of behavior that are transformed into assumptions or rules, used to predict the shopper’s future likes and dislikes. This information can allow e-tailors to customize content, sales, and advertising efforts accordingly.
This personalization of e-marketing means you are getting to know your customers, which in the end, is designed to make the browsing and ultimately the purchasing experience friendly and simple for your customer. But you have to be aware of their needs to facilitate this dynamic and robust contact with your brand.
There are no set standards for personalization but if you think about customer relationship principles for a brick and mortar store you can deduce what principles can come into play on your e-store.
Let me give you an example. When I managed a man’s clothing store, many years ago, the owner would always look at the weather forecast the night before. If rain was in the forecast he would move the raincoats and umbrellas up to the front door. He might even have a sale on raincoats. He would manually go back through his records and the salesmen would call anyone who bought a raincoat 2-3 years ago and tell them about the sale. Like I said it was a long time ago. There was no email. This is a simple example of personalization. You make it easy for the customer to buy based on their needs or an external simulation.
Here are some simple business items that your website should have in order to personalize the buying experience.
• Greet guests by name when they enter your site.
• Start people off with a generic version of your site and allow users to customize it gradually as they see fit.
• Watch what users are doing and actively recommend personalized ideas.
• Combine personalized services with a generalized segment where readers can keep in touch with the rest of the community, read about new ideas or products, and get recommendations based on past purchases.
• Offer “wish lists” which are registries that allow others to make pre-selected purchases for your viewers.
There are a lot of companies that can offer to help you personalize your e-commerce website or you can do it yourself. As you think of your personalization strategy, answer these questions to help you decide what is best suited for your web marketing plan:
• How much do I know about the visitors coming to my website?
• How much information am I comfortable asking those customers for?
• What do I plan to do with the information after I receive it?
• How much money can I spend to track visitors?
• Will I be able to implement a database system?
• Do I want to keep the process simple, or can I afford to be more elaborate?
• Am I going to program it myself or can I hire someone to do it for me?
Users are increasingly expecting company websites, products, and services to be tailored to their individual preferences, past experiences, and what they happen to be doing at this very moment. This puts the demand on business and IT leaders to create a personalized and engaging experience for end-users across all channels, both online and offline.
Business owners are focusing on making their communications more timely and relevant to e-store customers. To do that, the need to build communications around the interests and preferences of each individual customer is paramount to website purchase conversion success.
How to Make Your Website E-Commerce Friendly
Sell! Sell! Sell! This is the mantra of every business. And it is the gospel of any company that makes money solely through e-commerce. Effective website design encourages your visitors to take the next step. It combines good layout with page copy that induces customers to buy products or take some kind of action.
Here are some “Do’s” of E-Commerce:
- Do include a link to the order page on every other page of your site.
- Do have the products on display in the right fashion with clear information and strong calls to action.
- Do tell the customer you are offering any post-sell service like free shipping and money-back offer.
- Do build in as much consumer choice, freedom and control over the process as possible, and include ample opportunity for them to bail out of a transaction before they are locked in.
- Do offer customers a choice in privacy matters. Ask them whether or not it is all right for you to send them emails on special sales or to share their e-mail address with your marketing partners.
- Do wait until the end to request credit card information.
- Do tell the customer your site is secure.
- Do wait until the transaction is complete to request survey data.
- Do cautiously recommend related items to go along with their purchases like a leather protection crème to go along with a pair of expensive dress boots.
- Do give the customer all your contact information and be sure to include a phone number.
- Do let them “like” you on Facebook.
Doing the little things can create an online purchase venture that is safe, informative, and customer friendly for viewers and will certainly go a long way to help your customers Buy! Buy! Buy!
