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Sales Strategy & Management

Asking For It

Collecting for a good cause may be the sales training your company needs.

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A number of years ago, I was asked to host a telethon to raise money for a charity organisation. Priding myself on being quite good at raising money from investors and customers, I accepted the position.

When the first part of the programme was over, the cameras were turned on the hostess and me, and we began asking viewers to donate money. We smiled, we talked and we tempted viewers with great bonuses. We did our best, but the phones sat silent.

Cold sweat began trickling down my back, and it wasn’t from the bright lights. It was from terror – a terror I had felt before in business and was feeling now because the phones were not ringing.

On the second pledge break, I abandoned my cockiness and began to speak heart-to-heart to the viewers. Slowly but surely, the phones began to ring, and by the third break, we had raised a small but respectable sum of money for the charity.

The ability to raise money is the best skill an entrepreneur can have. If a business is struggling, it’s often because the entrepreneur cannot sell or has stopped selling. It’s possible the entrepreneur has hired sales staff who claim they can sell, but can’t. As my rich dad often said: “Just because someone has the title ‘sales executive’ or ‘vice-president of marketing’ after their name, does not mean they can sell.”

When I was starting my career as an entrepreneur, my rich dad suggested I take a job in sales. When I asked him why, his reply was: “Because that is what entrepreneurs do. Never forget: An entrepreneur’s success is not measured in college degrees or corporate titles; an entrepreneur’s success is measured in OPM [other people’s money].”

In 1974, I took my first sales position with the Xerox Corporation. For two years, I could not sell. I asked my rich dad for advice. He suggested I volunteer to raise money for a non-profit group. For the next year, I worked at Xerox by day, and three nights a week, I dialled for dollars for a charity. Asking for OPM for a worthy cause was my best sales training. There was no exchange – I was asking for money without offering a product or service. I needed to become stronger in my sales and communications skills, and selling over the phone is tougher than selling face-to-face.

If you want to increase sales, donate your sales talents to a worthy cause. If you have salespeople who need to improve, suggest the same to them. After all, a business’s success is measured in OPM.

Robert Kiyosaki, author of the Rich Dad series of books, is an investor, entrepreneur and educator whose perspectives have challenged and changed the way people think about money and investing.

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Sales Strategy & Management

The Pros And Cons Of Selling To Your Friends And Family

Don’t ignore the first stages of engagement, just because they don’t result in immediate purchases.

Lisa Illingworth

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“When starting out in business, the first people that you rely on to test out a product and pricing are those closest to you or as we teach the kids in the FutureProof programmes, low hanging fruit. But what do you need to keep in mind when using this as your first customer set? The feedback loop from selling to these people will be skewed and if you know this, you can build a business that will survive outside of “easy targets”, says Lisa Illingworth.

Pros

1. Confidence Boosting

Starting a business is ridiculously hard. To take the plunge is often the scariest thing that we attempt and with the failure rates being heavily stacked against business survival, it should be the goal of every new entrepreneur to boost your confidence. And nothing boosts confidence like an eager customer.

Friends and family make great confidence boosters. It’s their mandated job to enthusiastically follow your business Facebook page and buy every product you have to sell, even if it is in early development phase.

2. Gentle Criticism

Intrinsically linked to the first pro, is the second pro that friends and family should deliver criticism in a gentle manner that will not break your fragile spirit. These people should be heavily invested in your personal growth and if this is true, they will be concerned about your infatuation with this business, and not breaking it.

And this may only be because they don’t want to field phone calls late at night after the idea tanks or pay your rent when the funds dry up.

3. Cash Flow

The life blood of any new business is the constant trickle of money coming into the business in the early days to keep yourself, the entrepreneur alive and fed. Don’t underestimate the necessity of keeping money flowing, even regular but small amounts. Friends and family are great sources of quick, regular purchases and they are more likely to choose your small business over a larger one because of the emotional investment in you.

Related: 7 Lessons For The New Entrepreneur To Take Into 2019

Cons

1. Inflated Expectations

Please don’t be fooled by the outright enthusiasm that your family and friends have for your new product or service as the general sentiment carried by those that have no idea who you are. You will be sorely disappointed when you find out that all that hype was based on a personal connection and investment in you, the entrepreneur.

When people outside of your personal network see the value at the price you’re charging, you are then quite literally, on the money. Until then, keep your expectations in check.

2. False Feedback Loop

I think like most of us who could just not bare the deflated façade creep across a friend’s face if you gave them cold, hard feedback that the homemade mix of spices they have randomly thrown together and called ‘Chai Tea’ is not a tasty as she thinks it is. And thus, we buy a jar and stick it in the back of the pantry hoping it gets forgotten.

This type of feedback loop, whilst protects the relationship, does not protect the young business person from the harsh reality that their product is just not that good. You may be concerned about how a friend will take the news and the impact it will have going forward, a customer will not be that forgiving. The false feedback loop sets an entrepreneur up to fall even farther when the real feedback starts coming in.

3. Market Exhaustion

If the only customers you actually have are those purchasing based on their investment with you this market will quickly become exhausted. If you have not devised a strategy to tell others outside of your network about your business, you will not be developing a continuous stream of new customers through a customer journey.

Related: How Taking Risks – And Failing – Can Lead To Business Success

In marketing, it is almost never that people buy on the first encounter with a business. There needs to be a ‘dating’ like process where customers get to know, like, trust and try before they make a purchase. If you have ignored growing these segments of your marketing and sales, you will eventually exhaust those in your network and be left with limited cash flow and little market awareness.

What then is the answer to this conundrum? By all means take the confidence boosters from those closest to you that will keep you afloat in the early stages of growth, but keep your expectations measured and seek out the harsh criticism from strangers to refine your offering so as to have real value at a palatable price point.

We teach the kids at Futureproof to find people to buy your service or product that are easy to get to without spending time or money but we don’t specify who they are rather to find the low hanging fruit in order to start but spend time marketing to a larger audience at the same time. Don’t ignore the first stages of engagement, just because they don’t result in immediate purchases.

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Sales Strategy & Management

The 7 Rules Of Pitching

If you want to build an investable business and land funding, you need to understand the landscape. Vusi Thembekwayo unpacks how smart businesses attract investors.

Nadine Todd

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In 2014, Zithande Mbala pitched his business idea, a smart toilet paper lubricating device, to the Dragons on SABC’s Dragon’s Den. It was a bizarre pitch, not least of all when Zithande valued the business to be worth northwards of $100 million in a few months’ time. He was offering a 10% stake in the company for an investment of R1 million.

The Dragons did not respond to Zithande’s pitch well. It made for entertaining television, but no one thought they were watching a great investment walk out the door when the Dragons collectively said, ‘I’m out’.

And then in 2018, one of those Dragons, Vusi Thembekwayo, saw a smart toilet paper lubricating device at OR Tambo International Airport. He gave Zithande a call, only to discover that the business was off the ground — and had some large contracts to boot.

“How did we miss it? All of us are entrepreneurs and we completely missed it,” says Vusi. “I’ve rewatched that clip a hundred times, trying to figure out why we all thought it was a terrible idea with no hope of making it in the real world.”

There are lessons to be learnt in Zithande’s pitch for both funders and entrepreneurs looking for funding. “We pre-judged him, which we shouldn’t have done. He had an accent that he said came from spending time in New York, but we knew he hadn’t. It’s a strong lesson for us not to pre-judge, but it’s also a lesson for entrepreneurs. We all put on personas — we wear suits to meetings when we wear jeans at the office — it’s a part of doing business, but you need to be careful not to come across as inauthentic. If you’re trying to be something that you’re not for a funder, it might backfire.

Rather be who you are and have confidence in yourself. Authentic, transparent entrepreneurs will be respected, even if you’re coming from a completely different space or background to the investors you’re approaching.”

The next lesson speaks to the nature of both entrepreneurship and finding funding: Always persevere. “If you believe it, do it,” says Vusi. “It’s a cliché, but clichés exist because they’re true. Don’t listen to negativity, don’t stop, and don’t in the moment let the bumps in the road shape your reality.

“There will always be hiccups. We make mistakes. We get rejected. If you let these derail you, you’ll never succeed. Most companies don’t get funding the first time round. Most entrepreneurs don’t succeed with their first ventures. You need to learn to push on, no matter what life throws at you.”

But perseverance is just a starting point. If you want to build an investable business and land funding, you need to understand the landscape. These are Vusi’s seven lessons in attracting a funder’s attention.

Related: Pitching in the Dragons’ Den

1. Put each ‘no’ to good use

According to Vusi, it’s almost immediately apparent whether entrepreneurs have pitched their business to investors before, and it works in their favour.

“They answer the questions we’re thinking in their presentations, before we need to ask them,” he says. “No meeting with a funder is a waste. You can either let the rejections wear you down, or you can learn something and perfect your deck.”

2. Record all meetings

“No funder will say anything in a meeting that you can’t hear, so ask if you can record the meeting,” advises Vusi. “When you play back the recording, you’re now a third-party listening in. You can hear yourself — wow, why did I stutter there? Why do I sound so nervous? Why didn’t I say this… There is so much you can learn and improve on just by re-living a meeting.”

In addition, when you’re recording a meeting, you don’t need to take a lot of notes and you can be completely present in the discussion.

3. Use the 10/20/30 Rule of PowerPoint

A few years ago, Guy Kawasaki evangelised the 10/20/30 Rule of PowerPoint. In a nutshell, a pitch should have ten slides, last no more than 20 minutes and contain no font smaller than 30 points.

“We’ve seen this combined with design thinking, and it makes for a compelling pitch,” says Vusi. “When I first saw it, it seemed so basic and even obvious, and yet so few entrepreneurs use this format. If you do though, you steer away from an executive summary and SWOT analysis and instead focus on the problem, how you’re solving it and where the commercial opportunity lies.

“What is the problem you’re solving? It’s such a basic question to ask, and yet so few businesses start there when they’re pitching. Instead, there’s a tendency towards, ‘This is me and my team, and our amazing clients, and the 15 000 products we offer… and the person you’re pitching to is thinking, ‘hold on, what’s the problem? Help me understand the problem. Because if I get the problem, you have my interest.”

4. The goal of the first meeting is to secure a second meeting

You need to grab an investor’s attention in the first meeting to secure a second meeting, and the way to achieve that is by piquing their interest with a problem that you can profitably solve. “I’ve learnt that a pitch has to grab me within the first seven minutes, or my attention starts moving to my emails, to-do list or other urgent matters,” admits Vusi.

“I’m present at the beginning of the meeting — that’s where you need to unpack the really important stuff. The rest can follow later. If you grab an investor’s attention, you will get the opportunity to discuss your team, products and clients. All of those things are important. But you don’t want them upfront, and then by the time you’re reaching the most crucial part of your presentation you’ve already lost everyone’s interest.”

As an entrepreneur, Vusi learnt this lesson the hard way. “We went on fundraising rounds ourselves, and I realised that I had eight slides of fluff upfront, because there were so many things I felt I just ‘had’ to let them know. The reality is that I needed to present our hook — follow-on questions and meetings will cover everything you need to unpack. But if you don’t have that hook, you’ll never reach that point.”

Related: Pitching To Lenders – How To Get It Right, First Time

5. Practice, practice, practice

“Iteration is important. Deliver your pitch as many times as possible. Practice on business associates, friends, family — anyone who will listen. But make sure some of them are strangers, or at least people who will give you the unvarnished truth. You don’t want to feel good and get a pat on your shoulder — you want to perfect your pitch.

“Ideally, what you need is someone who will ask questions from an outsider’s perspective. See what they latch onto, or what they don’t understand. How long does it take to explain what you do, or the problem you’re solving? We all make assumptions and we all understand our businesses and industries, but don’t assume the person you’re speaking to has the same perspective or knowledge.”

6. Don’t treat every potential investor as the same

There are a number of key things to understand about the funding landscape. First, venture capital and private equity firms raise money from partners. They have shareholders that they are answerable to, and to whom they need to show returns. They need to grow the capital they invest. Therefore, if there isn’t a growth opportunity, there isn’t an investment opportunity.

“You need to show how the investment will help you grow the business,” says Vusi. “This is a key element — if I put in x, I will be able to get y out. Yes, there’s a risk that it won’t work, but you need to have a growth story; you need to be able to demonstrate how you plan to get there.”

In addition, each fund has a mandate. Approaching an FMCG and Agri investment fund for a tech venture is pointless. Similarly, approaching an eco-fund with a plastic bottled-water concept will not work. Understand the fund, the individual investors and how your business suits their mandate.

6. Know your numbers

If you’re a subject matter expert and not a finance person, speak to someone who is. “Tap into your network and find someone in that space. They will understand the money and ask you the questions that relate to that part of the pitch and business. This will give you an idea of what investors will ask so that you can come prepared to answer their questions. Too many entrepreneurs walk into an investment meeting and don’t have all the numbers they need at their fingertips. This is a red flag for investors — how will you grow their investment and your business if you don’t have a handle on the numbers?”

Pitch to a taxi driver

This is a simple lesson that Vusi himself figured out while taking a ride in a taxi. “We were waiting for passengers and started chatting, first about how the local music industry is changing and then moving on to my business,” says Vusi.

“It was an incredible experience. Here was the stranger, asking me questions about my business that I knew the answers to, but had never considered including in my pitch.

“Taxi drivers have a short attention span because of what they do. They also run high-volume, low-margin businesses and work under immense pressure. They understand exactly how to think about their businesses in terms of how much return their vehicles are giving them. Think about it. A taxi driver will charge a passenger R2,50 for a ride, but owes R250 000 on his taxi, so he understands all about capital returns and depreciation cycles. He’s an excellent resource — and he’s free. You need to get to the point and see if your pitch makes sense.”

The 10/20/30 Rule of PowerPoint

Guy Kawasaki’s 10/20/30 Rule of PowerPoint is made up of ten slides.

  1. Title: Provide company name, your name and title, address, email and cell number
  2. Problem/Opportunity: Describe the pain that you’re alleviating or the pleasure you’re providing
  3. Value Proposition: Explain the value of the pain you alleviate or pleasure you provide
  4. Underlying Magic: Describe the technology, secret sauce or magic behind your product. The less text and the more diagrams, schematics and flowcharts the better. If you have a prototype or demo, now is the time to transition to it. If a picture is worth 1 000 words, a prototype is worth 10 000 slides.
  5. Business Model: Explain who has your money temporarily in their pocket and how you’re going to get it into yours.
  6. Go-to-Market Plan: Explain how you are going to reach your customer without breaking the bank.
  7. Competitive Analysis: Provide a complete view of the competitive landscape. Too much is better than too little.
  8. Management Team: Describe the key players of your management team, board of directors and board of advisors, as well as your major investors. It’s okay if you have a less than perfect team. If your team was perfect, you wouldn’t need to be pitching.
  9. Financial Projections and Key Metrics: Provide a three-year forecast containing not only rands but also key metrics, such as number of customers and conversion rates. Do a bottom-up forecast, not top-down.
  10. Current Status, Accomplishments to Date, Timeline and Use of Funds: Explain the current status of your product, what the near future looks like and how you’ll use the money you’re trying to raise.

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Sales Strategy & Management

Know Your Value As A Business

Do you have a unique selling point?

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Developing your unique selling point and value as a business often become the cornerstone of your competitive advantage and growth strategy.

Your competitive advantage is that what makes your business different from the rest. It is so important that Jack Welch, past chairman and CEO of General Electric said:

“If you don’t have competitive advantage, don’t compete.”

There are two types of competitive advantages:

  1. Cost advantage
  2. Differentiation advantage.

Cost advantage means you provide reasonable value at a lower price. This is achieved by continuous improvement of operational efficiencies and using economies of scale. The low-cost strategy requires a close watch on profit margins and monitoring your competition for price changes.

Your competitive advantage may be easier and more effectively achieved for long-term success, by differentiation. A business with a differentiation strategy can charge better prices with higher profit margins.

Related: Here’s How To Value Your Business

How to achieve value through a unique selling point in your business:

  • Bend over backwards: Go out of your way to impress and assist your customers. Focus on their needs, making their experience a pleasant one.
  • Be the best: Provide a unique or high-quality product or service.
  • Be innovative and bold: Meet your customers’ needs in a new way. Strive to be the first to offer new products or services to attract them and keep them coming back.
  • Specialise, specialise, specialise: Instead of aiming to meet the needs of an entire market, rather specialise in one aspect. Establish yourself as an expert in your field and carve out your own growth path for a niche market.

“Don’t try to be all things to all people. Concentrate on selling something unique that you know there is a need for, offer competitive pricing and good customer service.” – This is the advice of Lilian Vernon, a U.S. businesswoman whose company was the first women-found company to trade on the American Stock Exchange.

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