Selling the idea to the bank
The first port of call is often your bank. If you require financial support - an overdraft facility or a loan - the bank will want to know more about your business. The normal way of providing this is through a business plan. This is an important document - and one you need to prepare even if you don't require help from the bank. It maps out what your business will do, who its customers will be, your qualifications and experience to make it successful, and your future plans and anticipated financial needs and targets.
People tend to have a love affair with their own voice. Communication, however, must be a two-way process. People should be encouraged to ask questions - rather than the obligatory 'any questions?' invitation at the very end. Listening is critical to communicating effectively. Let people have their say - but make sure you have yours.
Use face-to-face communication
Even in the technical age, face-to-face communication remains a key business skill. People may be able to communicate through modems and the like, but the impact of a personal meeting can never be underestimated.
Preparing a business plan
A common mistake is to assume that the business plan must be a large document with copious charts and information to impress. In fact, bankers and venture capitalists are unlikely to be impressed by a meandering book-sized plan. They want to see and hear that you have thought about your idea and why you believe the business will be successful. The business plan should, therefore, be less than ten pages - though you should have other documents and information to back it up if necessary.
The business plan should include:
- The business: what it will do and the people involved
- The market: an overview of the market you wish to compete in
- Customers: identification of who the likely customers are and how you will market your product or service to them
- Competitive advantage: why your proposition is different and will attract customers
- Long-term plans: what are your aims and targets over the first few years (up to five years). This should include detailed projections of profits, market share, sales and investment needs
Making selling work
What are you selling? It may be a mass-produced part for a machine which appears inconsequential when it is fitted to the multi-million pound machines of your customers. But it is more than that. The minute part you make in batches of 250,000 is crucial to making your customer's machine work. Consultant Ken Langdon explains: 'Customers do not buy a tie because it has bright colors, is made of silk or is washable at 40 degrees. They do so because they imagine how people will think of them when they are wearing it. They do not buy a computer because it has a fast processor, a color screen or an adjustable keyboard. They buy a computer because it is going to reduce the amount of finished goods stock they are holding and thereby improve their profitability. Neither can it be forgotten that customers have a choice. They can always buy someone else's product.'
Selling revolves around clearly defining the benefits to the customer of buying your particular product or service. You are not selling a small inconsequential part, but something which is essential for the smooth running of your customer's business. Selling must be based round the needs and aspirations of customers. If you forget the customer, you can forget the sale. You can sell customers things they don't really want or need, but you can do so only for a very short time. If you continue, you will soon run out of customers. If the customer doesn't trust you, he or she will simply not buy. If you have tried to sell them something which they don't need or which doesn't work, their trust is liable to be extremely limited. Sales people aren't - or shouldn't be - irritants or bullies. In fact, research shows that in 83 per cent of cases, customers actually like the sales person.
Talk to the right person
Making contact with the right person is essential. It may be that your existing contacts allow you direct access to the person or people who will be buying your product. But for many people, finding the right person with the buying power is hard work and involves persistence as you negotiate the maze of a large organization's hierarchy and telephone system. In the desperate search for positive responses, it is tempting to talk to someone whose views don't really matter, but who is interested and positive. This wastes time and money. You have to find the right person - the one who commands the purse strings.
In achieving the right level of contact, you need a deep knowledge of the marketplace and of customers, and have to be able to talk at the right level - whether it is easy or not. At different levels, places and companies you will need to adopt different approaches. The chairman of a large company requires a different approach from a stationery buyer because they will be looking for different things from you, your business and the product or service.