11 Sales Tips for Entrepreneurs
Sales is the heart of a startup.
Once sales stops, a business fails. Sales is the most important activity in a startup coming a close second to product development and design.
Therefore, once the product has been developed, you must allocate 50% to 80% of your time and effort in developing sales.
Here are a few tips on sales, which will make your entrepreneur selling easier and more effective.
First do it yourself
[Tweet -Sales Tip for Startups: Never hire someone to do your initial sales.]
In fact you should acquire your first hundred customers yourself.
You may have more than one product. If so, make sure you sell each product to the first fifty to hundred customers yourself.
This is to ensure that your product is bought for the right reasons and that the customers who buy your product understand all its features and uses correctly and make optimum use of it.
When you sell it yourself, you ensure there can be no mis-selling which often happens when you entrust the selling to sales people hired for the purpose.
A wrong perception of the product or wrong understanding of the uses of a product can cause customer dissatisfaction which can affect the image of the product and the company.
When you do the initial sales yourself you not only win the respect and trust of your customers, but also get a better understanding of the challenges in selling the product and the revenue inflow.
Travelling across the country, meeting potential customers, understanding their needs and requirements, acquainting them with your product ,it is a fantastic learning experience rivaled by none other.
Additionally it can give you insight in improving your product’s features.
Identify your core team
[Tweet -Sales Tip for Startups: Identify your core team as soon as you acquire your first 100 customers.]
Once you have acquired your fist hundred customers, you should lose no time in identifying your core team members to whom you can now delegate the sales role.
This is a very critical juncture and you should not dilute the job and hire people who have indifferent skills or not enough commitment, even though they may come cheap and you do not have a very good fund position.
It is better that they are people who are known to you and whom you can trust. The best people to whom you can entrust this responsibility will be those who worked with you in developing the product.
Their qualifications may be much more than what a sales job requires, they may be highly qualified engineers and software professionals but because they know the product well, they are the best people to be in charge of the sales.
Measure usage/value based sales
[Tweet -Sales Tips for Startups: The best way to go about is to measure results at every point]
Usually entrepreneurship means innovation. So you will be selling concept based products. You will be introducing a completely new product or service which is not familiar to its intended end user.
So it can be a pleasurable and challenging task. The challenge lies in selling a concept to a customer. The best way to go about it is to measure it at every point.
Having a dashboard that tells you who are the customers who are actually using the product, the trial users who are using the product etc can be very useful.
So you can base your sales on the usage and utility of the product and not on sales skills of any salesman. These value base sales mechanisms make sales more effective and easy.
Do not base sales on discount offers
[Tweet -Sales Tips for Startups: Do not base sales on discount offers.]
Usually many people do sales through discount offers. Sales is also done by offering major incentives to sales personnel. This is the wrong way to go about selling your products.
This technique is more suited to selling unbranded apparels and for stock clearance in shops. Explaining your product’s features and uses and how it can add value for your customer is the right way of selling your product.
Never devalue your product by offering discounts especially when selling to consumers.
Also when you accommodate requests for discounts, the sales will be further delayed by haggling on the part of the customer for greater quantum of discount.
Give trial or demo of your product
[Tweet -Sales Tips for Startups: The best way of convincing a is to allow a trial]
The best way of convincing a customer of your product’s worth, is to allow him a trial or giving a good demonstration of the product functioning.
When a customer buys a product after a demo it vindicates the products usefulness and efficacy, because the sale has not taken place due to salesmanship but due to the product’s worth.
Also you get an idea of the mechanism of the sale and then you can apply it repeatedly to make more sales happen.
Make sales commandments
[Tweet -Sales Tips for Startups: Form sales commandments to introduce right practices.]
Introduce right practices and methods of sales by forming sales commandments which have to be strictly followed by the sales personnel.
One such commandment could be,”Give no discounts”.
Another could be, “Educate the client on right use of the product”. A third could be, “Always give a trial or thorough demo of the product before a sale is made”.
Expand beyond home location
[Tweet -Sales Tips for Startups: Your startup gets the next edge when you expand it to other cities.]
Most startups bootstrap to get the business going.
They manage in the initial days with their own funds.
But as the business grows you have to look to expand. Many people who have a good flourishing business are, in spite of it, hesitant to expand out of the home location.
This is not a healthy attitude.
India is a large country with many towns and cities which offer a huge opportunity to expand and proliferate your business.
Be it south north east or west, cities like Bombay Pune, Ahmedabad, Delhi , Kolkotta, Cochin Chennai Coimbatore and numerous others offer many avenues of opportunity and growth.
It gives your startup the next edge when you expand it to other cities.
The initial pinch is only initial
[Tweet -Sales Tips for Startups: As you progress, the journey becomes less arduous.]
The first stage of a startup is the most difficult and that is what is meant by the initial pinch. You will find that the going is uphill initially but as you progress, the journey becomes less arduous.
To illustrate this, let’s take the example of Practo’s setting up its first thousand centres. It took Practo twenty one months to set up its first thousand centres.
The next thousand centres was achieved in six months the third in three months and thereafter, it has become a lot more easier adding every thousand centres in less than thirty days.
From this illustration it is clear that as you progress along the road, you achieve each milestone with lesser effort and lesser time.
So the advice is, do not be disheartened by the initial time lag in achieving a major breakthrough.
The pace quickens rapidly as you go on. This is because once the concept is understood and appreciated by the target market, its reputation is as good as made and its demand rises accordingly.
Right science of sales
[Tweet -Sales Tips for Startups: The initial entrepreneurial selling is not about volumes.]
The initial entrepreneurial selling is not about volumes. It’s about ensuring that the concept is right. Once the science behind the selling is correctly understood, you will find that it makes further sales easy.
But if the initial sales have been made by enticing the wrong set of customers with fancy offers and discounts, you will find that the numbers gradually decline.
This is because the sales personnel have neglected to explain the product or acquaint the users with all its features or educate them on how it is to be used.
Therefore, the users do not use the product in the right way or make optimum use of it to get the best out of it, and so the product is not of much use to them after the initial fascination and novelty wears off.
Typically after the initial high, the sales will fall off.
Scaling at the right moment
[Tweet -Sales Tips for Startups: Do not think of scaling your business without external capital. ]
Since most startups are bootstrapped in the initial days, due to paucity in funds, many entrepreneurs fail to scale up their business at the right moment.
Once the product is launched and a fair size market for the product is assured, it is important that you scale up your business. Otherwise you will be unable to meet the rising demand and this may affect further growth.
Since capital is required to scale up your business you have to raise funds by applying to Venture capitalists. In fact Venture Capital is primarily meant for scaling sales.
When you have serviced the initial hundred customers yourself, you will find an increased demand for your product which can help you in convincing Venture Capitalists to fund your business.
Do not think of scaling your business without Venture Capital aid.
SME market and enterprise market
[Tweet -Sales Tips for Startups: If you are an inexperienced entrepreneur, start with B2C.]
Sales has two aspects:
1. The B2C aspect and 2.The B2B aspect.
When you sell your product directly to the end user or consumer, it is B2C sales or business to consumer sales.
This is typically less complicated and the common type of sales.
Now B2B sales is when you sell products to other businesses.
In the B2B segment, there are two types of markets-the SME or Small and Medium Enterprises market and the Enterprise market.
The SME is the common small scale businesses that are seen everywhere and there are many lakhs of such businesses in India. The Enterprise market are much larger organizations.
The definition of an SME is any business which has a turnover between one lakh and ten crores annually. Any organization which has an annual turnover of more than ten crores is classified as belonging to the Enterprise segment.
Selling to an enterprise is a very difficult, uphill and laborious undertaking.
It requires specialized skills and knowledge as also perseverance and management skills.
For an inexperienced entrepreneur, it would be more advisable to target the B2C market or the currently fastest growing SME market segment.
Summing it Up
You will find that entrepreneurial selling is not such an uphill task as you feared, if you keep these tips and hints in mind and act upon them.
In fact if you learn to enjoy sales and take it as a challenge to your ability and skills, you will find this aspect of your entrepreneurship as rewarding, satisfying and exhilarating as any other.