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#26: Personal Branding – Attributes of a good salesperson

Knowing your skills and how best to use them with certain clients and in certain situations will undoubtedly lead you and your business to success. So having a set of resources that you can draw on as necessary is key.

It will be helpful to look at this in the context of personal branding. We will look in future articles at coherence of image, and networking, but let’s start with the attributes of a good salesperson.

We looked at this earlier on when we looked at challenges, in that selling your services is one of the hardest things to do – delivery is the easy bit! I think it is fair to say that selling has become a lot less confrontational and adversarial than it used to be (with notable exceptions), and a meeting of minds has become more important – remember our consideration of PRISM.

When I run my workshops I do a little word association exercise; I say one word and ask the delegates to write down the first thing that comes into their head. The one word is “Salesperson” – the responses I generally receive are predominantly negative, including words such as:

  • Impolite
  • Shallow
  • Pushy
  • Smoothie
  • Aggressive
  • Shark
  • Bully
  • Suit
  • Sleazy
  • Scumbag

It is fair to say that most of the words volunteered are not words that you would feel happy being used about yourself! So, ladies and gentlemen, we have a challenge.

If we are going to eat, then normally we have to sell and yet we associate selling with pushy, sleazy scumbags in suits! So how do we do sales without having to risk ourselves being perceived as one or more of the negative images conjured up?

I have to try to demystify the sales process for you and make it slightly less scary. My personal view is there are three attributes of a successful salesperson:

  1. The first attribute is the ability to be liked. If you consider your own experience, you are more likely to buy from somebody you like!
  2. The second attribute is the ability to listen. There is a famous saying that God gave us two ears and one mouth and we should use them in that proportion, and this is absolutely true. The good salesperson asks the right questions then shuts up, and if you have asked the right questions and remain silent the client will tell you all you need to know. Some of the best salespeople I have encountered are amongst the quietest people I know.
  3. The third one is to my mind the hardest one to handle, namely the ability to enter the client’s world, rather than try to drag the client into yours. That is where most people fall down. When people get into the sales process and are in the thick of it, they get nervous and tense. When that happens, they revert to where they are comfortable, namely themselves and their business, and they stop talking about the client and his or her business. What you are trying to do is solve their problem in their world.

If you can master that, coupled with the other two attributes, then you have the main components of a good sales person. You still need a process to work with and some tools at your disposal, but in terms of a sound base, you will have it.

Next time we will take a look at coherence of image, which has become ever more important with the advent of social media. In the meantime, if this topic interests you give “Sales on a Beermat” a read – a great little book by Mike Southon and Chris West.

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#31: Further Problems

In the past two articles we went through the different reasons for why small businesses fail, namely because they were unaware of what they were getting into and issues with client payments.

But there can be other reasons why a small business would stop trading, such as choosing the wrong business partners.

It is shame to have to say that most business partnerships do not work. This is not because people are bad; it’s mainly because circumstances change. If you take a simple example of two people who decide that they are going to work together, on the day they agree to start they are both 100% on the same page. But sooner or later one of them will drift and once the drift starts it is very hard to reverse the process.

That drift could be caused by something more exciting coming along for one of them, their priorities changing, a health scare, or a family issue of some sort. I have seen all of these happen.

Unless you put in place a mechanism to deal with changing circumstances when you start, you will begin to see resentment, as one party senses that the commitment and effort are not balanced anymore.

Case Study:

I was doing a strategic workshop with a small consultancy run by a man and a woman, who operated a partnership with a group of about 12 associates. They had been going for about three years and doing very well.

They had an idea for a big new venture which was going to be capital intensive and they wanted to be put through an intensive “stress test”; the purpose was to see that if they went to the bank/business angel community they would be taken seriously.

They wanted the assurance that their new business idea made sense, and that their existing business was in good shape. The woman was doing most of the delivery and the man was the ambassador creating the awareness and lining up the prospects.

One of the issues I usually try to establish is how people allocate their time.

The lady was “on fees” doing client work pretty much full time, so it was clear what she was doing, but he was not doing a lot that was fee related; I was thinking that there was only a finite amount of networking and prospecting that he could be doing each week, so what was he actually doing?

I kept trying to explore how he spent his time, but he was resistant; mid-afternoon, however, it came out. All the time she thought he was out there marketing and prospecting for the partnership he was doing something completely different.

The man had recently married, and whilst his business partner was out there bringing the money in, he was helping his new wife set up a restaurant business. You could have heard a pin drop. When they had both calmed down we had a very difficult conversation about the next steps.

I had a long, depressing drive home, but two days later I received a letter and a cheque for the work. She said it was the best day’s consultancy she had ever experienced, and she did not know how many years of deception I had managed to short circuit.

I have no doubt that on the day they set their partnership up they were both 100% matched, but his priorities changed and it is hard to imagine a situation where they could get back to a genuine partnership of equals. The partnership was dissolved within three months.

Take this as a lesson in how important it is to be honest with your business partners at all times, you don’t want to be on the receiving end of a business relationship that goes sour because one party changes their priorities without consulting you.

Posted in: Start-ups

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#30: Why Small Businesses Fail – Part 2

In my previous article we stared to look at the main reasons why a small business might fail, and today we are going to continue with this.

If you are doing business to business it is a different game.

If your clients are other small businesses you will need to be careful. Some of them will try every trick in the book to delay paying you. It is amazing how creative other businesses can be! If your terms and conditions say you want payment in 30 days do not believe that they are making every conceivable effort to comply, because they are probably not! If you think they are, then you are potentially deluded.

If, on the other hand, your clients are going to be big companies then you still need to be vigilant, as they are quite often inefficient in terms of paying product and service providers. They are not paying you because they don’t want to, they are not paying you because they can’t find the invoice, they can’t match it to the transaction, or they have paid someone else.

One of my clients is a software company who sells to large companies. The husband does the selling and delivery, and the wife does the bookkeeping and invoicing. She is on first name terms with at least two people in the accounts payable department of their clients.

She knows whose tray the invoice has to be in and by what date to hit the next payables run. From time to time she will send them tickets to the theatre, or a case of wine, to say thank you for their on-going business and prompt payment; they have never had a bad debt in 18 years, and their days sales outstanding is as low as you can possibly get it.

But it is time consuming. One of the small business consultancies where I used to be actively involved has a secret weapon in the form of their bookkeeper, who also does the invoicing.

If you assume that all the invoices from the previous month are going out on the first of the next month, then this is easier to follow. So let’s assume that the next wave of invoices is going out on the 1st October. On the 30th September she will call each of the clients, advise them that the invoices are being done, and then check that the amount in question is what they are expecting.

The reason she does this is to prevent a situation where after several weeks silence they are chased and then claim that it was not what they were expecting. So, she is taking away the ability for them to play the “not what I was expecting” card. Having sent the invoices, she will then telephone to check that they have been received, which takes away the “never received it” card.

She does both of those in the immediate timescale of the invoice going out and as it gets closer to the contractual payment date (30 days), she is all over them for payment. That is the way that you have to do it if you are a small business, but it is time consuming.

Try to keep this in mind when you start taking regular clients on, otherwise you may find yourself in the red.

So, a final word of advice: Don’t assume that people will pay you, or pay you in a timely fashion, if you have done the work.

Posted in: Start-ups

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#25: Appropriate bag of tools

Over the past few articles, we have looked at how to retain high value clients and build trusted relationships. However, without the ability to maintain these you will find yourself back at square one.

It is very helpful to have a “bag of tools” of resources that you can draw on as necessary, which suit the client and the situation. Someone coined the phrase “if you only have a hammer in your tool bag, you will treat every problem like a nail”. I have encountered people who do this and are then surprised when they get a pushback from the client or prospect. So, the watchword is make sure you have a range of tools which you can apply, but don’t use them at inappropriate times or in inappropriate situations.

Areas where you might want to have tools at your disposal could include:

  • Focus Groups
  • Interviewing
  • Problem solving
  • Innovative/creative thinking
  • Relationship building
  • Communication
  • Strategy formulation
  • Strategy implementation
  • Managing strategic change
  • Project management
  • Performance management and measurement
  • Coaching
  • Counselling
  • Conflict resolution

There are many more that you could assemble, that would fit your interests, your experience, and your proposition. The key is to put together a toolkit that you feel comfortable with and which gives you the confidence to get the job done. Don’t include tools that you are not comfortable with. Stick with ones with which you are familiar, and/or you have been trained to use.

One tool that I use is PRISM, which I employ to help with:

  • Self-awareness
  • Teambuilding
  • Leading high performance teams
  • Team performance diagnostics
  • Recruitment
  • 360 reviews

Others which I have developed myself include the “one-page plan”, which I encourage all my clients to use, and a diagnostic to evaluate progress towards achieving strategic objective (in other words “how far have we come?”).

So, arm yourself with a mix of appropriate tools, either acquired externally or developed by you internally, and keep them ready for use as and when the situation calls for them. It could make a significant difference when undertaking client assignments, thereby creating happy clients!

Next time we will move on to address the tricky issue of Personal Branding.

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#29: Why Small Businesses Fail – Part 1

Today we are going to move on from the financial aspects of running a business and how to structure a start-up correctly. Now is the time to really focus and concentrate instead on the main reasons why small business fail.

If I put my black hat on and talk about the main reasons that small businesses fail, it’s not because I want to depress you just at the point of launching, it’s mainly to tell you where the traps are so that you can avoid them.

Small businesses fail because they run out of cash; and we already know that probably the biggest reason that this happens is because they did not fully understand what they were getting into. But there are other reasons that can come into play:

  • Lack of self-awareness – they have been unrealistic about their strengths and weaknesses, i.e. they thought they were good at sales when they were not. I can think of somebody down in Sussex who thought they were the best thing since sliced bread in terms of sales, but they were selling at the wrong price which meant the more business they did, the more money they lost.
  • Research – they came up with a product or a service which was a solution looking for a problem; their research was insufficient for them to clarify that there was a market for what they wanted to do.
  • Underestimating costs – you should be able to figure out your costs; for example, don’t guess what your insurance costs will be – find out. If you use as many real numbers as possible, you can then figure out what your breakeven point is, and then you know how much money you have to make to cover your costs before you start making money.
  • Allowing customers too long to pay – if you talk to any owner of a small business and ask them what their biggest gripe is, number one is almost always bad debts. If your model is business to consumer, and you are dealing with the public, it is slightly different; by and large you will be paid by cash, cheque or credit card so you are safeguarded to a certain extent, and also the timeline is shorter.

Any of these scenarios will have dire consequences to the success of your business, so make sure you are fully prepared to tackle them should they arise.

Next month we will look at some more reasons why businesses fail, but if you think you need some more guidance on this please don’t hesitate to contact me.

Posted in: Start-ups

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#28: Financial Plan

Last time we went through how we going to structure and run your business, as well as the different options you will have when setting it up financially. This puts us in the perfect position to complete the finance part of our one-page plan.

What I have assumed (for you!) is that by the year-end, your run rate will be 16 billable days work per month, so pretty full! You are working on an average rate of £250 per day.

You are not diluting your income by using anyone else. You are going to be stringent on costs, and you are going to keep your costs at 20% of turnover; and finally, whilst you will “upgrade” to a value business in due course, in Year 1 you are going to organise your net earnings to support yourself and, if applicable, the family.

If you need external finance to launch your business, then realistically you have three main options, in addition to any government grants or funding schemes which are specific to your locality (your local Business Link is the best place to research this).

  1. “FFF” – This is short for Founders, Family, and Friends. This represents the logical starting point.
  2. The Banks – The government introduced a new scheme in 2008 to stimulate lending to small businesses, which has a partial government guarantee. If for any reason you are not eligible for this scheme (known as the Enterprise Finance Guarantee or EFG Scheme), you will probably have to provide security (e.g. guarantee probably supported by a mortgage over your home) to obtain either working capital finance or asset finance.
  3. The business angel community – there will be one or more business angel communities in your locality, as they do not usually like to be more than 2 hours away from their investments.

Below I have set out my top tips on dealing with banks and angels:

Top Tips for Dealing with Banks:

  • You need to prove your ability to service the debt (plus interest) with something to spare
  • They will be looking for security when lending to young businesses
  • They will fund assets and working capital
  • They will very rarely fund people and salaries
  • They will have concerns re risk and reward

Top Tips for Dealing with Investors:

  • Exit Strategy is often their No. 1 priority
  • Return on investment is critical
  • They will be looking closely at the potential of your business
  • They will also look closely at the management
  • They will not fund the owners’ lifestyle

Next time we will look at the main reasons why businesses fail and how you can avoid them. In the mean time, do get in touch should you have any questions.

Posted in: Start-ups

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#24: How do you find business partners?

In my last article we looked at what a successful practice looks like, which followed on nicely from the “wish list” we covered in my previous article on value drivers in a consultancy. Now I want to move on from this and concentrate on your next stage of business: partnership.

This is so very difficult, and on so many levels. The only advice I can give you is “if you have an ounce of doubt, then don’t do it”. Based on my own bitter experience, and that of others around me, I have come up with a checklist which I have been using with some of my consulting clients, which we have found works quite well. Please feel free to make use of it, and adapt it to suit your circumstances.

The 10 criteria we look for when sounding out potential business partners are:

NO

ISSUE SCORE (OUT OF TEN)
1 Demonstrable integrity/trustworthy  
2 Established track record as independent  
3 Capable of sourcing work (not needy)  
4 Communication skills  
5 Seizing the initiative  
6 Putting the client first  
7 Confidence and courage  
8 Business acumen  
9 Authentic  
10 Technical excellence  
TOTAL    

A quick comment on each of these:

      • It’s really important that whoever you take on operates off the same or a very similar code of conduct to yourself. The acid test for me is “would I let this person go to see my best client unaccompanied by myself, safe in the knowledge that he or she would take the relationship forward, as opposed to sending it backwards?”.
      • Is there evidence that they are capable of both selling and delivering consultancy work, making clients happy, and winning repeat business?
      • The last thing you need is someone who is dependent on you to provide them with work. A genuine partner can source work for themselves, you, and anyone else in the business. They are looking out for the firm, not just themselves.
      • Can they communicate with others in a way that establishes and develops relationships? Sometimes technical excellence comes at a price, often in the shape of interpersonal skills!
      • Are they good at spotting opportunities and capitalising on them?
      • It’s all about the client, and the client’s experience. Do they give any evidence that they believe this and genuinely try to live it out?
      • Do they give off an area of confidence and self-assuredness, without being arrogant? In addition do they have the courage to walk away, in a professional manner, from assignments and clients if they believe they are being compromised or conflicted in some way?
      • Do they display business acumen? In other words are they capable of taking a holistic view of the business and its context in the marketplace, and then reach and implement sound commercial decisions for the benefit of the firm?
      • Authenticity is exceptionally important. Do they “walk the talk”? Do they live up to who they purport to be and what they stand for? Is their on-line image coherent with the carbon-based life-form in front of you? There is a direct correlation between their authenticity and the reputation of the firm.

Finally, their technical excellence is sometimes taken as a given, which could potentially be a mistake. Do they have material, either in the form of intellectual property of intellectual capital, that other people will be prepared to pay for? In other words, do they have technical know-how, expertise, experience, that can demonstrably add value?

I think you should be looking for a score of 70, with no scores below 5, if you are seriously thinking of engaging with someone. In addition, I would strongly recommend that you run some kind of trial period to see if you can collaborate efficiently and effectively, before you enter into any form of agreement.

And one final word, make sure that any agreement provides for an orderly dissolution if a parting of the ways becomes necessary at a later date…

If you want to discuss this more with me, please don’t hesitate to contact me.

Posted in: Growing Businesses

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#27: Operations

Now that we have finished going through your strategic plan which we covered in my previous two articles, we can move onto something even more important; Operations. How are we going to structure and run this business? I am grateful to my Accountant David Beckman who has helped me greatly over the years.

The most popular choice is between sole trader and limited company. This is an area where it makes sense to take professional advice, but there are three reasons why, from the layman’s point of view, incorporation needs to be seriously considered.

  • One is legal
  • One is commercial
  • One is financial.

The legal reason is all around limited liability. If you set up a company, then it is the company that has the trading relationship with your client, and not you. If for any reason something went wrong and the client, or anyone else for that matter, came after you seeking compensation, the risk would generally be limited to the company’s ability to pay, unless you had been criminal or fraudulent in your activity, or had given a personal guarantee. If you are a sole trader then your entire personal wealth is on the line, including house, savings etc.

The commercial reason: why I think it makes sense is the fact that unless you are offering a traditional “trade”, e.g. electrician, carpenter, plumber or gardener, having a corporate structure may make you more likely to look more credible in the eyes of the potential client; furthermore you may not otherwise be able to obtain access to approved or preferred supplier lists now favoured by many businesses.

The third reason is that, despite Government tinkering, there is still a very marginal tax advantage in being incorporated rather than being a sole trader. I think in reality this is outweighed by the commercial and legal reasons, but this is my own personal opinion; please talk to an accountant or lawyer.

If you opt for the sole trader structure, you just need to open a “number two” account at your bank set up in your trading name.

If you go down the corporate route, you will need to open a company bank account, which you can’t do until you have a Certificate of Incorporation and Memorandum of Articles of Association.

In terms of Incorporation you have three options. In order of cost you can do it yourself (and the Companies House website is very user friendly), you can pay a company formation company to do it for you, or you can get your accountant or lawyer to do it for you.

Finally, there are five basic legs to your supporting infrastructure:

  1. Finance
  2. Legal
  3. Insurance
  4. IT
  5. HR

These five areas, together with marketing and sales, will be where you incur costs.

We will now have a business structure. We will have robust documentation. We will have a simple but effective CRM system to keep track of your clients and prospects. We will have a delivery process to maximise repeat business and get referrals from satisfied clients. We will have a culture of quality control, with regular client reviews and business improvement reviews.

I know this sounds like a lot, but don’t get put off! Running a successful business does not happen overnight, and there are bound to be times that are a little difficult. But just remember why you are doing this and what you aim to get out of the business, and don’t be afraid to ask for help! If you need a little extra guidance you can always contact me.

Posted in: Start-ups

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#26: Business Plan

Over the last few articles, we have looked at your business image, the importance of research and your strategic plans. Now it is time to turn our attention to your business plan.

There are a vast number of templates available to you, which are all pretty much variations on a theme. You could well find that the one-pager which I suggested, and which we are building, may be sufficient for your initial purposes.

If however you need to go to a bank or an investor then you may need more; if you can answer the 10 questions listed below in robust fashion then you are in pretty good shape.

Key Questions A Business Plan Should Address

  • Where is the company today?
  • What is the product or service?
  • What is the market/sector?
  • How will the market be reached?
  • Who is the competition (today and tomorrow)?
  • How will the product be produced?
  • Who are the people?
  • What are the financial projections?
  • How much funding is required?
  • What are the risks?

You may have to tweak the questions a little to fit your business, but if you can answer them all in confident fashion you are well placed to proceed. I reckon I have looked at over 5,000 business plans over the last 10 years from a fundraising perspective.

A few comments on these:

  • Lifestyle versus value business – we talked about this earlier. Remember, banks and investors do not see it as their job to fund your lifestyle!
  • Unbalanced team with key skills gaps – unless your plan indicates how you propose to address this, financial backers will be nervous.
  • Unclear product proposition – if you do not make it easy for the reader to grasp your proposition, he or she will quickly lose interest. Remember to avoid jargon.
  • Limited analysis of competition – if you put in your business plan that you have no competition your plan will go straight to the discard pile; – people will either believe a) that you are lazy or b) that if there is no competition there is probably no market.
  • Unproven revenue model – this is difficult if you are a pre-revenue start-up. How can you prove how much you can sell at what price and with what kind of frequency unless you have done the type of research the florist.
  • Incomplete sales plan – you need to give the reader a clear indication as to how you are going to reach the people who will buy from you. If you mention your route to market, your sales qualification process, your pipeline management process, and your activity and conversion ratio model, you will make them comfortable.
  • No sensitivity analysis – it is helpful if you do a best case, middle case and worst case, so that the reader has an idea of how you financial model looks in different scenarios.
  • Attention to audience – if you are talking to a bank their main interest is your ability to service the debt and pay them back; if you are talking to investors, their interest is your ability to give them a higher return than they can get from any other project, or from the stock market.

Back to our one-pager. We have talked about the pitch, and a little bit about the website. The details behind sales qualification process, pipeline process, and conversion ratio process will become clear when we have covered sales in a forthcoming article.

Until then, do get in touch with me anytime with any questions you may have.

Posted in: Start-ups

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#24: Trusted Relationships

This month I want follow on from last month’s article on how to keep the clients you have gained with some more tips on how you can do this for the long term.

One way of looking at your business is that you are selling trust – your prospects will buy “you” before they buy your subject matter expertise. If they like you, and believe they can trust you, then you are already moving along the pathway to assent. Trust is one of the main reasons for repeat use by a client, so what are some of the ways that you can build that level of trust?

  • Trust comes from delivering results on time. If you make a promise, or commitment, and you can match it or beat it, then you are building trust. This is where the dark art of managing “scope creep” comes in!
  • It also comes from delivering on or below budget. Again, they will trust what you tell them on future assignments.
  • The whole way you approach prospects and clients, in particular making an effort to adapt your behaviour to match theirs, thereby creating a “meeting of minds”, will also help.
  • Sticking to what you are good at, and what you deserve to be paid well for, is another foundation of trust. You will gain trust and respect by being open and honest re what you can and can’t do.
  • Keeping in touch with clients, even in between assignments, can make a contribution as well. “I saw this article and thought of you” – useful tactic to employ and generally one which is much appreciated.

Continuously striving for a better understanding of the client’s business, and his or her issues, will also bear fruit over time. In this regard one key tip is to instil in them the confidence and belief that you do genuinely understand their business, their issues, and have them in mind when you are not in their presence.

This can set you apart from your competition and position you so that you are better placed to react to what they will need next, as opposed to merely reacting to what they need now. This will also assist you overtime if, aspirationally, you would like to move from consultant to trusted advisor.

Next we would look at having an appropriate “bag of tools”.

In the meantime, go and build some trust!

Posted in: Consultancy

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