I’ve got a lot of experience now working with small business owners, that are building a business, who get to the point of selling, only to tell them, I’m sorry, what you have is not worth anything.
This is quite an important topic that most small business owners will face.
So, let’s start at the beginning.
We go into business for three reasons.
- We want more time.
- We want more money.
- And we want more freedom.
Yet, how many small business owners have created this?
The reality is, not many, if any.
After working as a business broker, I saw firsthand why nearly 80% of small businesses are unsellable. They are not worth anything.
And the reason for that is because, most small business owners are leaving so much unrealised profit on the table.
Then, the truth is, many small business owners, regardless of what they think, can’t sell, or they’re too scared to sell, don’t know how to sell, and further to that, don’t have the right systems, processes and procedures in place to maximize that whole end to end sales process.
And because of this, to get more sales, they ultimately compete on price, which is the fastest way to the bottom.
Price wars can never help any business owner make profit.
To survive, you first need to understand the business landscape has changed.
I speak a lot about the industrial age of business, which is where most small businesses exist, the transactional world, is ending.
It is no longer going to serve you any purpose moving forward if you are 100% transactional.
Those who will succeed in business, particularly if we have a recession, or not, are the ones that move away from that and move into the new age, relationship selling.
The difference is staggering.
We move away from selling to our leads, to allowing our prospects to buy!
Going are the days where you can just grab something, promote it cold, and sell it.
If people aren’t looking for what you are flogging, they’re not going to buy.
More importantly, our consumers these days are far much more educated than ever before.
Thanks to technology, thanks to social media, thanks to all the information at our fingertips, people are so well educated because we can do our research before, we’re ready to buy.
Selling to your clients reduces your ability for profit.
Having them buy from you increases your ability for profit. And that is the bottom line for business ownership.
To many business owners focus on sales, not profit.
The hunt for the next sale has now cost you the ability for long term client retention.
Did you know that if you have a great business model, and you provide excellent service, that the average client retention is three years?
Now, if you don’t have clients sticking with you for three years, you have a serious problem in your sales systems, skills, and processes.
What many business owners don’t know, is that it costs you five times as much to get a new client, then it does to service an existing client.
So, if our focus is on more sales, or the next sale, not on client retention, you have another massive problem.
What I see then, is, instead of businesses backing themselves and their ability to create results, they attempt to lock their clients into long-term contracts, only to have them leave at the end, disappointed. People hate lock-in long-term contracts. And if you don’t get them results, poor reviews and zero referrals.
But, if our focus is on results, and the results that you will get for your clients (not us) so they win BIG, they will stay with you longer, want to spend more money with you, and ultimately begin referring their friends, families, and clients to us! They become your raving fan model.
To do that, simply focus on how the buyers want to purchase. Understand your buyer’s journey.
Our clients want to feel empowered to buy.
They want to feel encouraged to buy.
They want to feel like our products, our services will make a difference to their lives.
And they want to know we appreciate them!
When you get that right, you will make so much more money and profit.
So, moving away from the industrial age, moving into the relationship age is where you will build, wider and deeper foundations in your business.
Your referral sales will go through the roof. Your cold attraction marketing will begin to decrease, meaning you marketing expenses will reduce, instantly increasing profit on sales.
At the end of the day, if we are in business for more time, more money, more freedom, one simple way to get that is reducing expenses. Part of those expenses include time spent prospecting and negotiating etc..
Then, when it comes time to sell, your incoming buyers look at three things.
One, how duplicatable are your systems, processes, and skills.
Two, what profit is there after tax and expenses EBITDA.
Three, how easy is it for them to scale that business to new greater levels.
Change the model of operation, improve your skills, systems, processes and procedures to maximise all opportunities, then once you have removed yourself from the equation, you now have something seriously worth selling.