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 abou…

Introducing Product Relationship Management - it's what customers want.

Most businesses these days have Customer Relationship Management (CRM) systems which store and process vasts amounts of information about us. They use this information to generate communications, amongst other things, which target us to buy their products and services. CRM is all about how a business relates to its customers: Past (keeping them loyal through aftersales and service), Present (helping them buy through bricks and clicks channels) and Future (prospecting).

Most businesses will at some stage have declared themselves 'customer-centric'. They will probably have drawn diagrams on whiteboards that look something like these:



But there's a problem with this whole approach of keeping the customer at the centre of your world and the focal point for everything you do.Is it what the customer wants? Of course companies who ignore their customers eventually go out of business. And those who treat their customers well, tend to thrive. But is it really in the best interests …

The Titus Trust Deceives British Parents to Brainwash their Kids

I have a son who went to a well known preparatory school (7-13) in Surrey. He came home one day clutching a leaflet for fun activity holidays that the school promoted every summer. The Titus Trust operate several camps around the UK where they organise fun outdoor activities for youngsters. Something caught my eye in the leaflet hidden in a paragraph in one of the sections describing the holidays. They used the word Christian. It was the only place in the whole leaflet that the word was used. My suspicions raised, I hunted around the leaflet for more clues and found the imprint which said something like 'A Titus Trust Charity' (the name of the camps was on the title of the leaflet). I dug deeper and found some disturbing evidence of who was behind these 'fun' camps. This is what I wrote at the time to the headmaster:
Dear Headmaster

XXXX came home the other day extremely excited about an outward bound camp next summer that he and his friends had been told about by a rep…