How do I handle the off seasons?

Monday, January 26th, 2009

Dear Norm,
I have a three-year-old company that produces job fairs, and we’re riding a roller-coaster. Business is great for three or four months in the spring and again for two or three months in the fall. In between, there’s nothing. Our cash flow falls to zero. Meanwhile, we still have to pay our employees. We’ve tried attracting customers by offering off-season discounts—to no avail. The cash crunch gets so bad that we spend most of the good months just recovering. This problem is crippling the business and my emotional stability.

Dear Kent,
First of all, off-season discounts usually don’t work and may undermine the profitable part of your business. Instead you should look for ways to diversify. Are there other types of shows you could produce in the down months? Could you do consulting during those times? You have to be creative, but diversification is generally the best solution to seasonal fluctuations. Meanwhile, deal with the cash-flow problems directly. Can you negotiate to pay your leases during the months when you have more money in the bank? Can you speed up your collections when cash is tight? Also try explaining the problem to your employees and asking for their suggestions. They may well come up with ideas you’d never think of.
Yours truly, Norm

Permalink  |  Posted in Business Success, Sales

Should I give up on a sale?

Monday, January 19th, 2009

Dear Norm,
I am a fledgling neckwear designer, and I’ve finally gotten all my ducks in a row. I contacted a local menswear chain and persuaded the buyer to take a look. I sent him tie samples, fabric swatches, photos, everything. Two months ago he assured me he was going to place an order. Since then I’ve called him repeatedly, and he always tells me he’s about to fax the order, but he never does. I’m having second thoughts about doing business with someone whose word doesn’t mean anything. Should I keep pestering him?

Dear Pam,
I’d bill him for the ties with a tongue-in-cheek note. Say something like, “I’m sure you loved my ties so much, you’re probably wearing them, but as a small-business person, I have to get paid for my services. If you are not satisfied with the ties for any reason, you can always return them. Otherwise please send me a check.”
Yours truly, Norm

Permalink  |  Posted in Customers, Sales

How do I hire the right salesperson?

Monday, January 12th, 2009

Dear Norm,
My partner, Jon, and I have a two-year-old technology start-up. Our problem is that neither one of us is a salesperson. Jon is an engineer, and I’m a systems analyst. I’d rather have dental surgery without Novocain than go out and sell. So we need a salesperson, but I’m worried about hiring someone who will give away the store. We offer a one-year, complete-satisfaction-or-your-money-back guarantee. If we wind up buying too much back, we’ll go out of business. With our reputation at stake, we can’t afford to go the gold-chains-red-sports-car route. How can we make sure we get the right type of salesperson?

Dear Eric,
You need to begin by recognizing that you are, in fact, the best salesperson for your product. You know it better than anyone else, and you have a passion for it. You probably have trouble making the initial contact with prospective customers. Fine. Hire someone to do that for you. Look for a personable individual who is good at cold-calling, turning up leads, and identifying prospects—and who can deal with the hardest part of selling, namely, rejection. Let that person bring you prospects who are pre-qualified and ready to buy. You’ll become the closer. That way, you’ll have control over their expectations.
Yours truly, Norm

Permalink  |  Posted in Hiring, Sales, Startups

What should I do about an unethical competitor?

Monday, January 5th, 2009

Dear Norm,
What should I do about an unethical competitor? I recently opened a service business that has been very successful, but our success has drawn the attention of a large established company in town, which is taking aim at us with marketing materials that misrepresent our service and professionalism. These people have played dirty before. I’d like to think their practices would catch up with them, but that hasn’t happened yet, and I’m afraid they have so much cash they can outlast the rest of us. Any advice?

Dear Rob,
Yes. Don’t lose your focus. Provide great service at competitive prices and develop a reputation as the class act in town. Give prospects the names of customers they can call to check you out. Above all, don’t badmouth your competitor, even if it’s badmouthing you. Customers will think less of you if you do. That’s an iron rule in my company. If I’m asked about a competitor I consider unethical, I say only, “I don’t think they can provide the type of service you want.” People get the message. If your competitor doesn’t mend its ways, it will be the loser in the long run.
Yours truly, Norm

Permalink  |  Posted in Competitors, Customers, Ethics