Skip to main content

Tough Love. Dealing with failing businesses

Business is risky. It has to be so we aren't overwhelmed with an infinite number of businesses all demanding their right to flourish. It's pure Darwinian capitalism. Only the fittest survive, so businesses that don't attract enough revenue or capital to pay their costs, will fold. Cease trading and liquidate what's left. The founders, shareholders, directors, staff, suppliers, creditors and customers need to take a deep breath and move on.

Easy to say, enormously hard to do.

When you've poured you life, soul and probably your house, marriage and family's future into something, deciding when it's time to call it a day is massively difficult. Usually there are still reasons to be hopeful. An order about to drop; New product around the corner; New strategy to test; New advertising in the pipeline; New management; Competitors failing. Endless reasons to be optimistic, except one. You're running out of money and the risk of the business failing is increasing.

Hope springs eternal. You see a cashflow hole that looks 'doable'. If only that order comes in next month. You think the bank might fund the shortfall and the shareholders have always been supportive. You grasp at every straw to keep your baby alive.

But you're avoiding one massive and crucial truth. You're not selling enough. Nothing else matters in the long run. If people or businesses aren't buying your stuff, you don't have a business.

Fiddling with the spec of the product, its message or the packaging is unlikely to save the day. There's something more fundamental going wrong that no amount of alteration to the product, logo, website and ads is going to fix. And in my experience it usually boils down to one thing...

S A L E S

I've met many hundreds of start-ups over the years. Some have been highly imaginative ventures, some have been bog-standard. The one thing all the survivors share in common is that they are led by great sales people who understand that is the priority. They get out into the market, and they sell.

It never ceases to amaze me how many people are either scared of selling or think it's a skill you need to be taught. You can certainly do courses to improve your technique, and you do need to have a certain amount of confidence in the first place, but the components of every sale are simple:

  1. QUALIFY THE CUSTOMER. Are they in the market for what you're offering? Are you solving a problem they've got? Can they afford it? What else might they need? When do they want it? etc
  2. COUNTER THEIR OBJECTIONS. "I don't like the colour"... "So if I can get it in another colour, would you be interested?"; "It's too expensive"... "What can you afford per month?"; "I've already got one"... "Is it as good as this one?". etc
  3. ALWAYS BE CLOSING. "How many can I put you down for?". "Do we have a deal?".
    And then say NOTHING. Let them say the next words even if there's an awkward pause. If you speak next, you've blown it.
I've met so many businesses where the business plan relies on crossed fingers. How many times have I heard "if we only had a decent marketing budget". There's no point in marketing if the product doesn't sell. No amount of clever words, animations, videos, social media likes etc will force a product into life. It might stimulate interest and create awareness, but nothing substitutes for good old fashioned selling. In person (ideally) or by phone (annoying but it works if carefully targeted and well timed by pleasant 'smilers and diallers' who speak your language).

So my plea to all those businesses who are about to apply for more loans or approach their shareholders for further support, is to look hard at your sales activity. Ask yourself "Is more money really going to solve your sales problem, or are you driving yourself deeper into dept? Are you avoiding a reality that the market doesn't want to buy your products, or that you haven't really tried to sell it to them?" And if you decide that the problem is that you've not tried hard enough to sell - GET OFF YOUR ARSE AND DO SOMETHING ABOUT IT.

Comments

Popular posts from this blog

Phillips screws - yes I'm angry about them too

Don't get me wrong. They're a brilliant invention to assist automation and prevent screwdrivers from slipping off screw heads - damaging furniture, paintwork and fingers in the process. Interestingly they weren't invented by Mr Phillips at all, but by a John P Thompson who sold Mr P the idea after failing to commercialise it. Mr P, on the otherhand, quickly succeeded where Mr T had failed. Incredible isn't it. You don't just need a good idea, you need a great salesman and, more importantly, perfect timing to make a success out of something new. Actually, it would seem, he did two clever things (apart from buying the rights). He gave the invention to GM to trial. No-brainer #1. After it was adopted by the great GM, instead of trying to become their sole supplier of Phillips screws, he sold licenses to every other screw manufacturer in the world. A little of a lot is worth a great deal more than a lot of a little + vulnerability (watch out Apple!). My gromble is abo

Norman's Autobiography

The following is an unfinished autobiography written by my father who passed away earlier this week at the age of 93. Cheerbye Dad (you were the only person I knew to use this expression). You were a huge influence on my life. Thanks for taking the time to record so much that I never knew about your own life and those of our immigrant ancestors. Dad's the one in the middle ;-) The HorBraJacSac Saga by Norman Horwood  9th June 1926 (or possibly earlier!) - 27th June 2019 The Families' Backgrounds. We have four families; Abrahams/Horowitz/Horwood; Bralofsky/Braley; Jacobs and Tchaikofsky/Sacof. Taking my pair, the (Abrahams) Horowitzs/Horwood and the (Bralofskys) Braleys. They escaped from different parts of "Mittel Europe" at different times. Abraham and Rachel Abrahams, nee Gess, (Horowitz), had been in England longer than the Bralofskys, having come here from Lithuania in about 1897 as a married couple without children. It is certain that Abraham

Prepare for Alien Contact

I've not gone barking mad or joined some weird religious cult (aren't they all?). But I do predict that we will make contact with intelligences from other planets soon. Here's my reasoning: There are approximately 100,000,000,000 stars in our galaxy (easy way to remember this order of magnitude is it's one hundred, thousand, million). Usefully there are also approximately the same number of galaxies in the universe. And assuming every star has about the same number of planets orbiting it as our Sun, and that the Milky Way is an average size of galaxy, that means there are around 100,000,000,000,000,000,000,000 planets in the universe. A lot. Scientists have long debated the probability of life, as we would recognise it - reproducing, eating, etc - existing outside Earth. Most agree mathematically that it's a certainty. What they did was take all the components they believed were required for life to have evolved on Earth and then extrapolate what they know about