Businesses mainly fail because of a decline in their activity of winning new customers and selling, and failing to get paid on time. To sustain momentum achieved in good times, in recessionary times it is essential that businesses become more proactive with the selling process. This means being in contact with every current customer, every past customer and every past inquiry, and giving them compelling reasons to trade with you.
This might seem easy enough, but the biggest mistake people make when they set up or start a new business is failing to understand their customers. There is only one culture that works for successful businesses and that is to be customer-led and sales driven.
One must think from the customer’s perspective what can I do for my customer, as opposed to, what can my customer do for me? The modern entrepreneur has to help their customers make the right decisions, rather than trying to persuade them to buy something they may not need or necessarily want.
Selling has changed dramatically and customers and clients today are extremely savvy. Watching BBC’s Dragon’s Den, I find the mistake so many of these young budding entrepreneurs make is trying to get the dragons enthusiastic about their product or service.
Instead, they should demonstrate what sort of return the dragons’ investment will get and in what time frame. Similarly, the professional giving advice must ensure that the selling is not about telling. Instead, build relationships of trust and confidence, demonstrate how you can add value and ask questions.
Rather than hear about your business, your customers/clients want to know what you can do for them and that can only be achieved by asking questions about their business. Once you know what your clients and customers want, you can demonstrate how you can achieve this in other words, you can then sell the si zzle, not the steak.
Effective communication is also essential. Professional organisations like accountancy firms, for example often fail to properly communicate their offerings to existing clients or new prospects. Assuming your customers know what you can offer can lead to lost opportunities. Rather than sending out leaflets and brochures that will hardly ever be read talk to people this doesn’t imply pressure, it shows care and courtesy.
Now we come to the second major reason why businesses fail. As chairman of four companies, the most important activity I stress on my financial directors is the raising of invoices. Many companies raise their invoices monthly, or get around to doing so only when ‘convenient’. This is a formula for disaster. Invoices should be raised immediately. For businesses to ensure they remain solvent and successful, they should strictly manage their debts and payment terms. If a payment is on 30 days, and you don’t receive the funds on time, a reminder must go out.
If the funds are still not paid within seven days, pick up the phone.If you still don’t get the money, then get in a car and collect it in person. There’s little point resorting to a small claims or county court, as these are very expensive and you’re unlikely to get your money.
It’s difficult to make a business succeed no matter how enthusiastic or passionate you might be about your product or services. Here are five quick tips to help your client’s business in a difficult economic climate:
- Play to win and stop playing to lose do this by setting definite goals and going for them
- Make one extra contact every day that you might not do ‘normally’
- Motivate your people and give lots of praise for anybody who brings in new business
- Lead by example in other words, get out and go meet people
- Invest in and train your people
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