The Entrepreneur's Mentor

Making Your Organization a Sales Organization

Every business sells a product or service, hopefully one that is desired by the buying public. How they sell varies from industry to industry, profession to profession and business to business.But in order to achieve long term success, businesses must become sales driven. They must recognize that their sole purpose is to satisfy customer needs and desires on an ongoing, continuous, time after time basis. How do they achieve that purpose?

In theory, it is not hard at all. In practice, it takes focus and determination and strength of character and convictions. The first step is to have a clear vision of what you want to be as a business, what you want to achieve. As part of this an owner must clearly and consistently communicate that vision to the employees. Owners have to paint a clear picture of a believable future. And the future must be one that employees desire and believe in.

Part of what creates that belief is the values of the organization. They are the road the owner chooses, the path to completion of the vision. They say as much about what the organization stands for as anything else. And they are a major part of the brand. The values tell the employees, the vendors, the suppliers, the customers and the public where the organization's head and heart reside.

Do we want to achieve our success by trashing the competition, cheating our suppliers and scamming our customers? Or do we want to treat everyone with dignity, respect, honesty and fairness? Do we love nature and want to do what we can to preserve our environment or do we not care?  Our values as an organization speak to things like that.

Having great, strong values is very important but it does not end there. An organization must consistently exhibit behaviors consistent with those values. This means from the top down, not once in a while but every day. Employees look at their leaders and either believe or disbelieve in the values of the organization by the behaviors of the leaders. They must "walk the walk."

If the leaders model the right behaviors, employees will believe. And then they will be engaged. They will take pride in what they do and what the company does. They will be enthusiastic and they will be great representatives of the company in dealing with customers, suppliers and the public. They will be part of the company's brand, a very positive part.

Engaged employees lead to loyal customers. There is significant data to back this up. And to go one step further, they lead to more positive financial results.

So, step one in becoming a true sales organization is not to hire that "monster" salesperson. It is to build the foundation within your organization that makes good people believe in you and your company and want to work for you and serve your customers.

You can start that process today and begin paving the way for change.

The Art of the Deal

Some entrepreneurs love making deals. To them, doing business is boring- it is doing deals that is exciting. The high is in buying and selling. I know one entrepreneur that used to walk into my office and basically say "You buy me or I'll buy you. It doesn't matter. Let's do a deal." To him it was a big, fun game, and he was pretty good at it. Not everyone is.

Transactions are full of pitfalls. While some entrepreneurs feel they have a sixth sense about reading people and sensing when a deal is right for them, they still need a team of experts around them to make sure all goes well. Taking the time to build such a team is hard for some who are "can do" folk and who believe in the Nike philosophy of "just do it." They view lawyers and accountants as obstacles rather than a support team.

Rather than the professionals being the obstacle, the entrepreneur's thought process is the real barrier. There is risk everywhere and it takes experts to steer around it or eliminate it. Great business sense does not make up for a lack of legal or accounting or tax or human resource or ERISA knowledge. Thousands or even millions of dollars can be involved in some key pre-purchase decisions. A transaction that "feels" right and looks superficially like a home run can turn into a disaster of huge proportion if all key areas are not explored. Proper due diligence can make or break a deal.

I bought one company without sufficient due diligence and with the wrong supprt team. What looked like a cheap deal on paper turned into a million dollar fiasco with far-reaching consequences. Those of us that can see opportunity everywhere need to re-orient ourselves. Instead of opportunity we should be thinking about our capabilities. We need not just our eyes on the deal but the eyes of those paid to protect us. These folks needn't be viewed as obstacles. Think instead of navigators, who will help us find a safe course through difficult waters.

Satisfy your deal urge. It is a great high. Just do it smartly- with the right guidance. Your team, your posse is worth every penny you pay them if you choose them well.

Six Month Review

For some, the key landmark at this time of year is the summer solstice, which just passed; or the first day of summer. To others, it is the end of the 2nd quarter of the business cycle. Either way, the year is just about one half over. What can we learn from the first half?

What did we do right? What could we do better? And what are the critical success factors for the next six months? We are still in the depths of a bad economy, so we cannot expect external factors to be of assistance. Consumer confidence has not picked up, so we can't count on euphoria.

We can only count on ourselves. We have to do the right things. We have to examine what it is that keeps our existing customers or clients coming back and make sure we keep doing those things. If we are not doing enough, we have to do more. It is not just price. Service and quality are critical. Reliability is necessary. Flexibility counts. What else?

We have to remember that our employees are the ones that are responsible for our customer relations. Happy, engaged employees contribute hugely to customer loyalty. Even in the age of layoffs and benefit cutbacks, we can work hard to keep our employees as happy as possible under the circumstances. We can work to inspire them, to earn points for credibility, transparency, honesty and integrity. How we treat our employees is part of our brand- don't forget that.

We can cut cost and lay off employees, but it is rarely enough. We have to keep business coming in the door. We have to pay our suppliers. We have to ask for everyone's contributions- effort, ideas, teamwork and sacrifice.

Entrepreneurs need to ask of themselves what they are asking of their employees. If there is a general wage freeze or cut, the owner should be doing the same to his own wages. If he is asking additional hours from others, he should be putting them in himself.

If something is taken away from employees, they ought to be given an incentive of some sort to get it back. Employees ought to be able to earn back what they gave up if certain benchmarks are hit. This builds teamwork, morale, employee engagement and employee loyalty and gives the employer credibility if he ever has to ask something of the employees again.

Use the midpoint of the year to measure your accomplishments and your opportunities for improvement. Then do something with the information.

Keep That Thinking Cap On

Word is that the recession is slowly winding down. Even if this is true, do not expect to see a quick turnaround. The  economy did not crash overnight and it will not recover overnight. And it is certainly not clear what a "recovered" economy will look like. But do not expect it to soar to the heady heights of two years ago.  There will be a new "normal."

So, we cannot pop out of our bunkers like hurricane survivors and just go about our business. We have to be wary of jumping into old patterns. We cannot spend in anticipation of improved sales. We can't ease restrictions we have put in place. In fact, for many businesses, it is still going to get worse before it gets better. Not everyone got slammed in the same manner at the same time to the same degree. Our economy was hit in waves and it will recover in waves. That recovery may take years.

Many business owners who feel they may have escaped with just mild bruising may still be in for a beating- especially if they lose their focus.

It is important to recognize and remember those factors that are critical to the ongoing success of the organization. If there are ratios or other metrics that tell you the crucial facts, keep your eye on them. If you need 100% effort from everyone, stay intent on making sure you communicate clearly and credibly and you work hard to maintain employee engagement. Employee engagement can be the difference between succeeding or not, staying alive or shutting your doors. There is a direct correlation between employee engagement and customer loyalty; and ultimately to profitability. Don't leave your employees hanging or guessing. Let them know what is going on and inspire them to align themselves with the company goals and objectives.

Stay in touch with your customers and your suppliers. You need to understand their situations. You need to know if their capabilities have changed in the downturn. You need to know on who you can count.

Catalogue your good habits and make sure they stay habitual. Follow the behaviors that are positive and abandon those that take you down the wrong path. Remember, everything has to be geared toward survival.

When the economy does turn, some companies will be in position to take advantage of it, and some won't. You know in which group you want to be.

Cash is King

Many businesses are struggling to stay alive in these uncertain times. The problem is that they don't really have a plan of attack. They are reactive rather than proactive. If you have been lucky enough to be in a strong position up until now, it doesn't mean that you are in the clear. You need to be looking at the data and "reading the tea leaves" on a regular basis.

You need to know what is going on with your customers, your suppliers, your geographic market and any national trends in analogous businesses. Most importantly, you need to be salting away cash that will be there if things slow down for you. Could you survive for six months with no business coming in?

The most optimistic analysts are saying that the economy will begin an upswing in the fall, 6 months from now. What will it take for you to survive for six months? Have you planned for a worst case scenario?

If you don't presently have the cash, how will you get it?  There are basically three places from which cash can be developed. The first is from working capital. You get this cash from your inventory (selling it) and your receivables (collecting them), operations, and, if necessary, the sale of assets.

Operations can provide cash if you can streamline them, cut down on expenses and on time and make your operation more efficient. This can be accomplished by downsizing, assuming you perform that operation with a strategy and a plan that acknowledges the relative value of each position as far as producing cash for the organization. It can be accomplished by shutting down product or service lines that have low margins or long term paybacks. Remember, cash is king.

You have to keep in mind that you need to have the cash to keep your business open. Nothing else is of more relevance in the short term.

In a small business the owner must think like the CEO in having a cash accumulation strategy; the CFO in actually managing the cash, doing the constantly revised budget and projections; the COO in scaling the operations; the VP of Sales in making decisions on which sales are profitable and which aren't and in coming up with a pricing strategy; and the head of HR in deciding about layoffs, furloughs, benefit cuts, deferring compensation, etc.

Big business or small, cash is king. In a crisis it does not matter that you are set up for long term sustainability. It doesn't matter if you have a brilliant marketing plan or a sales team full of "sales animals." All that matters is that you have the cash to get through the crisis.

If you manage your cash strategically and maintain your values and act consistently with them, you will end up in a stronger position that your competitors and you will probably be in a stronger market position than you were before the recession.