Compensation is always a hot topic in the business world. It’s something that both startups and established companies struggle with, and something that sales experts are in constant debate over. It’s a subject I’m asked about all the time in my role as a business coach, and it’s also a practical question I’ve had to take on more than a few times as an entrepreneur.
At the core of all this discussion and confusion is a surprisingly simple question: How much should I pay for sales? Continue reading
Even cats appreciate a high-quality cat-hair sweater. (Image: https://www.flickr.com/photos/thetopaz/)
You’ve figured out your average sale. You’ve nailed down your expenses. You’ve worked out your gross margin, operating expenses and net profit. But there’s one piece left to go before you have a clear picture of your sales performance: How long does it actually take to make an average sale?
This is called the “sales cycle,” and it measures the time span between making the first meaningful contact with a prospect to a finalized sale. The sales cycle provides you with that final piece of information you need to fully understand your sales performance, allowing you to create accurate sales predictions into the future. This is especially useful for companies that haven’t yet reached a profitable stage, allowing them to accurately estimate their capital needs as they approach profitability.
Let’s take a look at how this works by way of example. On the Success In Business Podcast, co-host Jason Pyles and I have created a purely fictional company called “Kickass Cat Sweaters.” Continue reading
The second “P” in my “Four Ps of Sales” is “Performance.” In a sales context, performance represents the number of sales you need to make in order to meet your goals. To accurately gauge your performance, you first need to know what those sales goals are.
This means getting a firm grip on your expenses and your revenue needs. A surprising number of people find this part of the sales process intimidating, as it involves a little number crunching. It’s not that this math is complex — it’s pretty basic stuff, actually — but any time you have to break out a calculator, a certain percentage of people’s eyes start to glaze over.
It’s not always easy to make financial projections seem lively. You might not be on the edge of your seat as you read this post, but I’ll do my best to keep this part as painless as possible. Continue reading
One of my stranger pastimes is to take a look at all the different sales training methodologies out there. I consume sales books, breaking them down chapter by chapter to glean any new insights I can. I’ve also been through most of the major sales programs out there, and I’ve attended countless workshops and seminars on the topic. It’s safe to say that I’m a lifelong student of sales.
One of the biggest criticisms I have of what’s often called “sales training” is that it’s not focused on the fundamentals. Instead, they focus on the “tips and tricks” of sales technique. Some of these things can be useful from time to time, but without a firm grounding in the core principals of sales, they tend to come across as pretty desperate.
You’ve probably encountered this “magic bean” approach to sales. There are a lot of people selling the idea that you can make millions of dollars by “just asking this one simple question.” That’s utter B.S., as any experienced salesperson will tell you. If you want to see real results, you have do to the real work of sales. Continue reading
Process is the cornerstone of truly professionalized sales. With the right sale process in place, optimizing your sales performance becomes much easier. A great process will help you find and retain the right sales people, and even help them meet their goals.
There’s no one-size-fits-all method for building a sustainable, predictable sales process. Every company is different, as is every market. To be successful, your sales process needs to fit the needs of your business, your customers, and your industry. The better the fit, more consistent your results.
To help you find the right fit for your sales process, I’ve written a list of 10 essential questions you need to answer. Continue reading
It’s no surprise that entrepreneurs and business owners are intimidated by sales. Few subjects have been more discussed, dissected, theorized about, and lectured upon than the most profitable process for selling things. Countless books, workshops, video series and training seminars are devoted to every aspect of the sales process, from the most broad generalizations of sales philosophy to the most obscure minutiae of process.
That’s always bugged me. Why does the business of sales have to seem so complicated? As entrepreneurs, why don’t we have something simple that explains the core concepts? Why isn’t there a “Four Ps of Marketing” for the sales process?
After some thought, I decided it was high time to create one. I call it the “Four Ps of Sales.” Sure, it’s a little on the derivative side, but it works. Continue reading
In my last post, I explained the concept of “highest and best use,” and how it applies to running a business. It’s an easy concept to wrap your head around, but how do you apply it to your business in a practical way? As an entrepreneur, how can you discover what your highest and best use actually is?
To help, I’ve developed a simple, three-question approach to help you identify those tasks that simply don’t represent the best use of your time and mental energies. Continue reading
In the real estate world, there’s a concept called “highest and best use.” It’s a principle appraisers use to determine the optimal value of a piece of property. The basic idea is that a property’s use and its value are strongly connected. When a property is being used in the best way possible — taking advantage of its location, utilizing available parking, being in good shape with modern upgrades, and complementing other nearby properties — then it should also have its optimal value. When a property is being used poorly, on the other hand, its value suffers.
You might be thinking “That’s great, Tom, But what does this have to do with entrepreneurship?” Everything. Continue reading
What are the personality traits, core values and motivations that make for a great entrepreneur? It’s a tricky question to answer, because the best entrepreneurs come from wildly different backgrounds, started businesses for a wide variety of reasons, and often have deeply personal missions driving their work. Steve Jobs and Bill Gates couldn’t have been more different in terms of personality and their approaches to fostering the personal computer revolution, for instance, but both were clearly exceptional entrepreneurs.
To gain a better understanding of what makes a great entrepreneur, it might help to think about the topic from another perspective. Let’s put the role of the entrepreneur into a format most of us are familiar with. What would the job description for an exceptional entrepreneur say? Continue reading
We’ve all heard the stats about business failure. According to some fairly reliable sources, as many as 8 in 10 businesses will fail within the first 18 months. But that statistic doesn’t tell the whole story. Many of those businesses were doomed to fail long before they ever opened their doors. Why? Their founders had no idea how the business was actually going to make a profit.
In my last post, I stressed just how important the financials are when planning a new business. The better your understanding of your path-to-profitability, the easier it is to both communicate and implement that plan. Continue reading