February Business Project: Create a Sales Process

How many prospects do you need to make create a contact?

How many contacts do you need to make a sales presentation?

How many presentations does it take to close a sale?

What’s my next step after I close the sale?

When asked these questions, many entrepreneurs have no idea what the answers are because the answer often varies from client to client.  However, this knowledge is essential to your success if you rely on sales to achieve your revenue goals (that’s everyone, right?).  Sadly, the reason many business owners don’t have a solid answer is because they don’t have a defined sales process nor do they track their statistics.  Rather than take the time to craft a process that works for their business, they opt to do whatever it takes to get a client.  This is dangerous for several reasons…

  1. It is difficult to hire someone to operate as a sales professional or business developer because you have no process for them to go by
  2. You cannot measure your effectiveness at any stage therefore you don’t know which area you need to improve
  3. You cannot guarantee that each client is getting the same level of great service

February Business Project: Create a Sales Process for your business

Step One:  Identify prospects – prospects are also known  as leads.  They can be Hot (someone who is ready to make a sale), Warm (someone interested in learning more about what you do) or Cold (someone you will be contacting to inform about your product and/or service)

Step Two: Make contact – Sending out mass emails or mass letters to your contact list is only effective if you have a means of following up on the communications.  Delivery of a mass communication is the step between identifying the prospect and creating a contact.  I suggest that my clients contact Hot leads directly via telephone, contact a Warm lead by email or telephone (depending on the preference of the prospect) and a Cold lead with a letter or email then phone call.

The point of your contact should be to schedule a face-to-face appointment to make your sales presentation.  If your business does not require, face to face presentations, you should make contact for the purpose of getting business from the contact.  Cold leads often take time to become warm leads so do not become discouraged if it requires more than one or two “touches” to warm the prospect.

Step Three: Make a sales presentation – regardless of what rhetoric you use, how fancy your materials or how good you look; I don’t consider this step complete until you ask for the business.  In many instances, we inform the contact about our product/service and wait for them to decide to do business with us.  We leave the door open and the money on the table for someone else to come and get.  Once you have informed the contact about your business, determined their need and addressed their objections; the next logical step should be for them to want to do business with you.  Obviously, we have to be realistic and understand that not every contact will become a client, however, the goal of the sales game is to convert as many contacts into clients as possible.  Otherwise, you are working harder and not smarter.

If you find yourself making a lot of presentations, but not generating very much business, you may want to evaluate the product/service that you are offering.  Is there actually a need in the market for it?  Is your sales presentation effective at creating a need within your contact and filling it? Are you convincing when asking for the business or do you give the contact the option not to do business with you?  Having a process and using it with each contact allows you to see what is working well and where you could improve.

Step Four: Deliver – a major part of your sales process is the actual delivery of the product/service.  Although you may be straining to see the correlation, consider this: it is cheaper to keep a client than to market and attain a new client.  Wouldn’t it be easier to continue selling to someone who is already familiar with your business rather than having to go to the sales presentation again with someone not familiar with your company.  By delivering what you promised to the client, you have a better chance of getting recurring business.

Step Five – Follow Up – once you have delivered the product/service, don’t forget to follow-up with the client.  Contact them quarterly, through a short visit, industry newsletter or holiday acknowledgement to stay in the forefront of their mind.  You may have done a great job thus far but most people are so busy that they sometimes forget about a need, unless it is recurrent or critical.  Make the time to follow-up with your clients to evaluate opportunities for improvement, additional service offerings or to get referrals.

Each business will have a different sales process because it has to be tailored to fit your industry and the personality of the person making the sale.  However, some variation of these five steps should be incorporated.

Spend this month creating a written sales process for yourself and/or for your (future) sales representative.

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Make your business idea a reality (Part 3)

So far, you have played the name game and thought about the big idea.  You should have also done a little research to create a mission statement for your business and made some decisions about its legal structure.  This week we are going to continue working on taking your business idea from paper to reality.

5.  What do you have?  What is the product or service that you plan to offer to the world?  What is this great thing that will help you to become successful?  Not only must you consider what is but also why would people want to get it from you rather than someone who already offers the same product/service?  How much will you charge?  On what terms will you provide it and who will be in charge of satisfying your customers?  These are serious questions to consider because often small businesses start out by thinking about what they have and what they want to give to their customer but they sometimes leave the customer’s feelings out of the equation.  A good product/service may get you one customer but great customer service will keep them coming back.  Take a hard look at your business idea and start to consider how it will translate in reality for your customers.  Every decision that you make about your business should have “how will this effect my customers” at the forefront of your thought process, not just how much money can I make.

6.  Don’t forget about Uncle Sam!  When you start to prepare for the reality of business ownership, you have to prepare to pay business taxes.  It is imperative that you seek professional guidance to make sure you are fulfilling your financial obligations to the government.  Contact your State Department of Revenue for guidance on calculating, collecting and paying sales tax as well as the Internal Revenue Service about payroll taxes and other business taxes.

One very serious tip:  Don’t try to make it look like your business is not making money to avoid paying taxes.  This will come back and bite you in the rear if you ever decide to apply for any time of financing for your business.  If it looks like your business is consistently losing money or not making a profit, why would someone want to invest in your sinking ship.  It is best to do the right thing, report your revenues honestly and pay the taxes.  You will reap the rewards in the long run.

These are two very important steps toward becoming a successful business owner.  You have to understand your product/service and what your customers expect from you and you MUST have a good system in place to manage your business taxes.

As always, feel free to share your experiences with making your business idea a reality and come back next week to keep the process going.  You will be an established business before you know it.