Subscribe

Stay tuned to the latest posts by having them delivered to you for free via RSS or Email. Simply Enter your email address or click on the "Subscribe to RSS" button.



OR

Subscribe via RSS

increase turnover

Tenders – timewaster or business generator?

2015-september

 

 

This article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in September 2014 and is posted here by their kind permission

 

 

Should you tender or stay away? Some basic rules

 

 

Tenders are used by all levels of government and many companies to buy goods and services and issue contracts. The total value of tender business is enormous, so an immediate reaction is to get involved. There is a downside as many small businesses and start-ups have experienced. It is entirely possible to submit many, many tenders without success. The direct cost of preparing a tender is high, but the opportunity cost of conventional sales you could have made instead is higher.

Me too

I call these ‘me too’ tender submissions, where you have nothing special to offer, and the company never heard of you. Among the bidders will be existing suppliers, those having specialist skills in the area and those bidding the lowest price because they can. Your chances of success are almost zero. Instead of wasting your time, develop a specific niche expertise or technology then tell potential buyers about it. Your chances of winning subsequent tenders increases dramatically. Continue reading

Your sales machine

2015-august

 

This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in August 2015 and is posted here by their kind permission

 

 

Turn your whole company into an enthusiastic unit that aids and promotes your sales

 

 

 

It is in the interests of any employee to do anything they can to ensure the business makes sales, or at least not put sales at risk. Aside from loyalty to their employer, a healthy and growing business means everyone is better off and has improved prospects for promotion. Strangely there are employees, and some managers too, who damage the company through carelessness, incompetence or deliberate obstruction. They are hurting themselves as much as their employer.

Contrast that situation with companies where everyone is customer centric, and frequently attract praise from customers they have been in contact with. There are typically no unresolved complaints on consumer forums, and every employee seems to know why customers should buy.

Review yourself

To build a company like them, some introspection may be a good idea. Do you really deliver goods and services that meet customer expectations, or have customers had to lower their expectations to your standards? Think of the grudge purchases you make, or the times you have been distressed but did not change supplier after a bad experience. You cannot expect your employees to be champions if your company supplies shoddy products, uses untrained technicians and seldom delivers on its promises. Fix the real problems and you will be pleasantly surprised by the change in your staff. Continue reading

Solution Selling – alive and well?

V__82F1This was the topic of Ed’s address to the recent series of Sales Summits around the country.

 

 

Most companies says they sell solutions to their customers, but they find it surprisingly difficult to explain the solution provided in recent sales; they often describe products sold instead. It is still harder to get answers about the value of the solution provided – what return in money or some other measureable did the customer enjoy as an outcome of the sale? And yet this is the very definition of a solution “A mutually agreed answer to a recognised problem, which provides a measurable improvement”. You might want to reflect on this and ask yourself – do we really sell solutions?

The formal methodology of Solution Selling goes way back to the 1980’s when a visionary ex Xerox sales training director Mike Bosworth launched a company to train salespeople in his methodology. He published a book in 1993 outlining his ideas, which revolutionised the basis of selling, converting technique and technology based feature / benefit selling to and more consultative customer and solution orientated approach. Arguably this was the foundation of all modern customer centric selling. Continue reading

Breakout

2015 FebruaryThis article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in February 2015 and is posted here by their kind permission

 

 

 

Planning and executing real growth strategies

 

 

The year 2015 stretches ahead, and many entrepreneurs I speak to are still cautious. This is understandable, 2014 was a horror year of violent strikes, power cuts, limited postal service, slow economic growth and uncertainty. The temptation to proceed with caution into 2015 is very strong.

Beware though, caution can become a habit, business plans showing a modest growth on last year can become the norm. The company does not invest in new products, markets or channels, research, marketing and training are put on hold and the company develops a culture where innovation becomes too risky “for now”.

Breaking out from the limited growth habit can be a challenge, but a very worthwhile challenge, if only as a defensive move to stop competitors getting bigger and threatening you. Continue reading

Don’t slow down

2014_NovemberThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in November 2014 and is posted here by their kind permission

 

November and December offer many opportunities for alert entrepreneurs

 

 

You will all have experienced it – the dreaded November slowdown, with many anticipating the year-end holidays before South Africa shuts down sometime in December. Entrepreneurs complain that it is impossible to sell at this time of the year. Many can’t wait for the start of the holidays.

How much are you contributing to this business slowdown? Are you demotivated by decisions being deferred to next year? Have you gone into pre-holiday slowdown mode, and repeated that this is an impossible time of year for marketing or sales? If you have then you are part of the problem, and this is a self-inflicted limitation on doing business.

Can you really afford to have one quarter of the year, from the beginning on November to the end of January as a time of minimal sales? Is it really true that nobody buys at this time of the year? The truth is there is an enormous volume of business available at this time, but it will not come to you if you ignore the opportunity.

Opportunities

There is an old saying that “everything comes to him (or her) who hustles while they wait”. Many successful entrepreneurs have had great successes during the slowdown by catching competitors napping in preparation for the holiday, or being the only bidder for profitable business. Tenders are published now to limit the number of bidders – really awake entrepreneurs take advantage. To get a slice of the millions spent in the next couple of months you must be alert, work hard and look for opportunities. You should also plan and execute an assertive sales campaign. Continue reading

Selling to big business

2014_OctoberThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in October 2014 and is posted here by their kind permission

 

 

Sales to huge organisations can be wonderful, but there are risks

 

 

Making a breakthrough into a giant corporate or a part of government is like finding the pot of gold for many entrepreneurs. If you have secured a contract rather than a single sale the excitement is even greater; the long-term profit generated allows the business to fund growth and regulates the cash flow. Beware though, this kind of business comes with some risks, and entrepreneurs should be aware that such contracts have destroyed businesses, and cost entrepreneurs everything they owned.

Making the sale

Large organisations, from government departments to mines are required to buy from small businesses, especially black empowered ones. We expect them to seek out entrepreneurial companies as suppliers, but it does not work that way. Little businesses have to fight hard to become suppliers. Large organisations are driven by budgets and the key performance objectives (KPIs) of the business unit which needs the product or service, so they will buy the products that fit the specification they prepared to suit those needs. This may not be the best product offered to them. Giants are risk averse and bureaucratic.

To win their trust you need to be aware of their style and needs and prepare your company and products to meet those. Pitch your sale in a way that will help the end users to do their job better. If there is ever a case of selling to the customer needs then this is it – you want to stand out from competitors and show why your company should become the supplier. Once you make the sale you must execute flawlessly all the time, and be instantly available to them at all hours. Continue reading

Tenders – timewaster or business generator?

2014_SeptemberThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in September 2014 and is posted here by their kind permission

 

Should you tender or stay away? Some basic rules

 

 

 

Tenders are used by all levels of government and many companies to buy goods and services and issue contracts. The total value of tender business is enormous, so an immediate reaction is to get involved. There is a downside as many small businesses and start-ups have experienced. It is entirely possible to submit many, many tenders without success. The direct cost of preparing a tender is high, but the opportunity cost of conventional sales you could have made instead is higher.

Me too

I call these ‘me too’ tender submissions, where you have nothing special to offer, and the company never heard of you. Among the bidders will be existing suppliers, those having specialist skills in the area and those bidding the lowest price because they can. Your chances of success are almost zero. Instead of wasting your time, develop a specific niche expertise or technology then tell potential buyers about it. Your chances of winning subsequent tenders increases dramatically.

Before you even get to tender stage you may have to register as a potential supplier. Government departments, municipalities and corporates frequently publish invitations for suppliers to list their companies in particular categories. If you have a highly competitive attribute or niche and are listed you may become one of a handful, or the only company invited to bid when the company needs your speciality. Continue reading

Getting better margins

2014_AugustThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in July 2014 and is posted here by their kind permission

 

Are you paying enough attention to this profit generator?

 

 

The difference between turnover and cost of sales is the starting point of profitability. Entrepreneurs drive their sales aggressively and manage operational costs tightly, but seldom pay as much attention to the crucial issue of margin. This is missing an opportunity to increase profit substantially with a little additional work.

Margin (or gross profit) is the difference between turnover and cost of sales, and it often comes from a simple percentage mark-up on all cost prices. This is a lazy way of setting the amount of gross profit your business will secure, and ultimately the net profit. You can do a lot better than that.

There are at least four opportunities to increase the total gross profit: More sales, higher prices, lower cost of sales and changing the product mix to increase the percentage of high margin products or services sold. Naturally this last one only works if you do not have a one-margin-fits-all lazy margin strategy. A tip to sell more is to increase the average number of items sold per order. Even a tiny percentage increase can make a significant difference to total margin. Look at the example of burger franchises which invite you to add a slice of cheese to the burger. If just 10% of all customers buy that very high margin slice of cheese they make significant extra profit with minimal effort, and it is so simple. What can you do to increase the items per order? Extended warranties, service contracts and training all offer opportunities. Continue reading

Customer information

2014_AprilThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in April 2014 and is posted here by their kind permission

 

A seriously valuable marketing tool – and it is free

 

 

Good customer information held in a structured system will tell you whether customers are growing with you or reducing purchases. It will have a record of every meeting, sales order, complaint, compliment, reference given, products purchased, payment history, budget cycle, nature of their business, basic credit information and key contacts. All of these are stored somewhere in your company records anyway, but are they accessible in an effective customer information system?

If you have a good system you can research target markets, make individualised tempting offers to customers, cross sell products and plan campaigns in target market niches with a high likelihood of success. What a great marketing tool, and its free.

Using the information

One way of using this information would be to list of all customers in a particular line of business, and list which products all or most of them are buying. Now you could do a survey among them to find out how they are using the products, their degree of satisfaction with those products, and any needs which are not being fully satisfied by the products. With this information you can: Continue reading

Lessons from the beginning

2014_OctoberThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in October 2013 and is posted here by their kind permission

 

 

Remember how fanatical you were when you opened your doors?

 

 

 

The plateau phase can happen when a business stabilises after the initial survival struggle, and growth becomes static. The company may be at break even or making a small profit; it falls short of its sales forecast and cash is tight. The entrepreneur is frustrated, customers pay late and suppliers are demanding. All of this has a bad effect on the staff.

If you are in this position or have been there you will know about searching for ways to solve the problem. How-to books, mentors, motivating speakers and training will be considered. Salespeople will come under pressure and some will succumb and leave. Some entrepreneurs will blame the economy, the government, the banks, trade unions or suppliers, and become helpless.

Simple answer

There is a simple answer to the problem. Cast your mind back to when the business launched, when making the next sale was a life and death issue for the business. You would have walked on hot coals to satisfy a potential customer, you would have tried desperately to anticipate their needs. Carelessness or laziness affecting a prospective customer would see the perpetrator in real trouble. A mistake in an order or a telephone that was not answered promptly would have been cause for a tantrum. You would celebrate with the entire company when you got orders that today seem trivial, and the enthusiasm would have spread. Continue reading

Start-up sales

13 Sept CoverThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in September 2013 and is posted here by their kind permission

 

Early sales are vital for start-ups, early bad sales are dangerous

 

 

 

When you open the doors of a new business your immediate thoughts are likely to be about income producing sales. If it is a retail business you will be watching anxiously for the first people to enter the store, restaurant, hairdresser or filling station. If you sell business to business (B2B) you must build new prospects to develop early sales. Expenses mount up, and insufficient sales income means your business could run out of cash and be forced to close before it really got started. Making early sales is that important.

Low hanging fruit

Everyone has heard about ‘low hanging fruit’ and you, the new entrepreneur, should look for those sales which you can most readily close. ‘Low hanging fruit’ is usually understood to mean potential customers which are easy to start selling to, but there is a problem in trying to sell to anybody who will listen. If the prospect is obvious to you it is also obvious to competitors, and they are more established, have customer references and will be more assured than you. They will also be eager to shut out a new competitor.

To really be ‘low hanging fruit’ the prospects should be those which your new business can easily close. This means retail customers who buy rather than browse, and a high ‘strike rate’ – the ratio between sales cycles begun and closed – in B2B organisations. Continue reading

If you are an entrepreneur you are in sales

image courtesy of imageafter.com

Entrepreneurs are frequently great salespeople

It is rare to meet an entrepreneur who thinks they are a great salesperson or sales manager. Most times they will use language like “I just don’t have the gift of the gab” or ‘I know my products but…”. But usually at start up the entrepreneur has to be a salesperson – there is nobody else around!

It is also rare for entrepreneurs to take steps to develop selling or sales management skills, which is odd. They will frequently take financial courses, read marketing ‘how-to’ books and study HR and staff management. The business is totally dependent on sales being made, and yet it is the one art that entrepreneurs seem to shy away from.

Let’s back up a bit. At the time the business launches, the entrepreneur talks to prospective customers, defends the price, negotiates terms, enthuses about the qualities of the products or services and spends lots of effort to think of ways he can make initial sales. Contrary to the usually-expressed belief by entrepreneurs that they cannot sell, they are often really good salespeople. They work really hard and are determined to make sales because they have to. Their product knowledge is awesome; they have the ability to shave a price and the knowledge of when cutting further will hurt the business. They make very sure that what was promised gets delivered, and attend to any customer complaint with vigour and immediacy. Continue reading

Decision time

This article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in March 2012 and is posted here by their kind permission.

 

A business with no sales needs to change or close

 

Challenge

This entrepreneur started a model and artist management company and signed up models, planning to take a commission of their earnings. But there have been few castings and very little income. E-mails to potential clients go unanswered. She asks if she should change her way of finding clients.

Response

This entrepreneur is faced with a three way choice right now. She can persevere, working hard to make a break through, she can quit, or she can change strategy and tactics. When potential buyers do not buy a product or service as expected businesspeople either become bewildered, as is this entrepreneur, or frustrated and angry at the buyers ‘illogical’ refusal to buy. This is naive; the buyer has no obligation to buy from the entrepreneur.

The key question to ask is ‘why would they buy from my business?’ Are the models more talented, or less expensive? Are my services superior to those of others? Users of models have an enormous choice, and will have their favourites. They know what to expect and the like the look of the models they use. If they want a fresh look there will be a large choice from their current agency. So why would they switch from the known and liked to an unknown agency and model? Continue reading

What is the real need?

This article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in October 2011 and is posted here by their kind permission.

 

The answer to insufficient sales may be more money invested, but there are other opportunities

By Ed Hatton

 

The challenge

I have just started a college with a unique range of course offerings. Enrolment numbers are poor due to a low advertising budget. How do we get investors involved without having surety?

Response

Existing entrepreneurs reading this will probably be smiling wryly. Cynics say the first two laws of start-ups are:

  1. However brilliant the product or service, initial sales will be much lower than expected;
  2. The only easy way to get finance is to prove you don’t need it.

In this case the entrepreneur has assumed that the only way to increase enrolment is to put a lot of somebody else’s money into advertising. There are a couple of issues with this proposed solution.

Firstly investors put funds into businesses because they believe they will make a good return. So this entrepreneur will have to demonstrate that the project will make money, despite the fact that early enrolments are poor. Facts, figures and hard information are needed, not just self belief and enthusiasm. Continue reading

Marketing with a limited budget

pic courtesy of imageafter.com

How do you get noticed if you have no money?

 Imagine a business with expenses rising, the turnover static or falling. The entrepreneur realises that the business simply has to find new customers, but there is  little or no money available for marketing. What should the business do next? In desperation maybe the entrepreneur has thought of doing something like:

  • Agreeing to place an advert in a supplement of a publication which will be relevant to their products;
  • Printing flyers and putting them in post boxes;
  • Hiring a new web designer to make the website more attractive.

Sadly the outcome is likely to be a poorer and sad entrepreneur. One time advertising may bring a few enquiries occasionally but is almost always a waste of money. The post is probably collected by a messenger who will discard the flyer, and a prettier web site will not bring more enquiries if nobody visits the site.

A smarter way is for the entrepreneur to realise that if he has limited funds, he needs to reach the people likely to buy from him as efficiently as possible; he cannot afford to market to people who will never be his customers. It is amazing that this simple piece of logic is so often ignored. The very first step is to identify who his most likely customers are, and then to figure out the best way he can communicate a marketing message to them. For most businesses in this situation this will be a highly focused message, getting to the right people with as little as possible waste. Sometimes this may be as simple as forming an alliance with a non competitive supplier to the target market. This would apply to photographers, event managers, courier companies and many more – maybe almost every business. To make this work the alliance must benefit both parties. The allies could agree to introduce each other to their customers, share exhibition or other marketing costs or offer bundled products. Continue reading