Tag Archives: Business

How Do You Revamp Your Sales Team? Seven Solutions

Situation: A company is faced with the imminent departure or retirement of several key sales personnel. This presents the opportunity to rethink and rebuild the sales team. What is the best way to take advantage of this opportunity? How do you revamp your sales team?

Advice from the CEOs:

  • The timing is good. Take advantage of this opportunity!
    • You’ve identified the next generation of sales leadership. Now determine their role building the future.
    • This is an opportunity to reset your vision for the next 3-5 years.
  • The task of the new sales leaders is to learn the products, customers, and processes. One of the best ways to do this is in the role of sales engineer.
    • Be the listener first – become the solutions person.
    • Use existing company personnel as resources to develop closer relationships with key people within the company.
    • Have existing staff can introduce them to current customers and point them toward new opportunities. Focus on impeccable customer service.
  • What are the immediate priorities for the new sales leaders?
    • Do what must be done.
    • Observe experts on the job.
    • Listen and learn.
    • Ask lots of questions.
    • It’s scary, but don’t worry – just do it!
    • Let others assist.
    • They will make mistakes – it’s called learning.
  • Be sure to build an approach and team that can support both your existing core business and build new opportunities.
  • You need to replace the capabilities of those who will be retiring, and at the same time bring in new opportunities for future growth. This includes sales hunters who are good at finding new customers and helping them define their unique needs.
  • What fears or concerns do you see in the new leaders?
    • Fear and concerns regarding short and long-term roles.
    • Focus on the near term. The President is focused on the long term. Focus now on visiting customers, being introduced to them, and learning about them.
  • Are you fully focused on marketing of your services?
    • What is your Sandbox? What is your Value Proposition? What is your Brand Promise?
    • Define these and let the definitions guide your development of the sales leadership as well as the search for additional personnel.

How Do You Build a Young Company? Four Perspectives

Situation: An early stage company is positioning itself for growth. The CEO believes that they need to adopt a new model to grow. She is focused on a new channel – an affiliate model using the web. How do you build a young company?

Advice from the CEOs:

  • Introducing a new product to a new market is very difficult, especially for an early stage business that is still establishing itself. Shifting from direct sales to ancillary services presents a new challenge and a new demographic. In addition, in your market there are low barriers to entry so it may be too early to diversify. You are more likely to be successful marketing to your core.
  • Evaluate and decide whether there is growth in your core business. If so, stick with your core plan. If not, then you either must change or decide that your core market is not what you thought it would be.
  • You offer a valuable, important service. The issue is branding and a clear vision of what you want to be. Start by identifying your revenue stream. Then assess ways that you can move from one-time sales to an annuity revenue stream without major adjustments to your model.
  • Is it feasible to build a revenue share model for ancillary services with your core business partners? Here are the steps:
    • Develop a model.
    • Talk to both your business partners and customers – test the concept. See how they respond.
    • There are two things to look for: does it turn out that that the model is easy to sell and implement, with little effort or distraction from our core business, or does it compliment your core business. If either or both is the case, you may want to pursue it.

What Incentives Do You Offer Your #2? Six Thoughts

Situation: A CEO’s “Number 2” is returning from maternity leave. He sees a role for her helping him grow the business and wants to give her an incentive for taking on that role. What is an appropriate incentive? What incentives do you offer your #2?

Advice from the CEOs:

  • Remember, first, that your #2 is a person with a new baby. Remember what it was like when you and your wife had your first child. How did your priorities change? How did your wife’s priorities change?
  • Never make her choose between child and job – you will lose. Offer her lots of flexibility. For example, allow her flexibility in hours to accommodate the needs of her child. This will mean a lot to her.
  • Find out what is important to her – what does she see as her role and goals. Be sensitive to the possibility that the birth of her first baby may have changed her priorities.
  • Here’s the message: “You’re valuable and I want you on my team. I appreciate your responsibilities with a newborn. How can we make this work for both of us?” Build a role around this – not an incentive program.
  • Many Silicon Valley and other urban families need two incomes. Work out something that works for her.
  • Have a Plan B in case it turns out that her priorities no longer align with yours.

How Do You Develop a Sales Organization? Four Points

Situation: A small company’s business is increasing and they need to build a sales organization. To date all sales have been conducted by the founder CEO and a single employee salesperson. Should they build inside or outside sales first? Are there trigger points at which one or both should be increased? How do you develop a sales organization?

Advice from the CEOs:

  • Right now you have first mover advantage in your market space. You have a unique offering and no existing competition. The immediate objective is to maximize early market share. Borrow if necessary to ramp sales. There is no trigger point.
  • Hire an outside salesperson now. You want an individual who is knowledgeable about your market and who has a large set of contacts. Make at least 50% of this individual’s compensation variable (commissions) to start and escalate the percentage of variable compensation as sales grow. Hire at current market rates.
  • Supplement your existing marketing with an investment in social media marketing and SEO (search engine optimization). Don’t try to do this yourself on the cheap – hire a pro. Invest in Pay-Per-Click to push your visibility.
  • To sell this plan to your existing salesperson and the rest of the team, it’s time for a Come to Jesus talk.
    • Make a strong business case for your program.
    • The trade-off is either invest now to rapidly build sales or become insignificant.
    • Once you’ve made your pitch and received consent, let the plan work before you ask for more.

How Do You Create Values, Mission and Vision? Four Ideas

Situation: An early stage company wants to create core values, vision, mission, and a BHAG (Big Hairy Audacious Goal) to guide the company and inspire employees for the next five years. What are the most important aspects of this process? How have other companies done it? How do you create core values, mission and vision?

Advice from the CEOs:

  • As the founding CEO of an early stage company, define yourself first. What are your skill sets and talents? Start from the beginning: why did you start your company? What motivates you and what do you want to build or accomplish? What are you passionate about? What really turns you on? You are the individual who, in an early stage company, must inspire your employees. What inspires you and what has attracted your employees to the opportunity presented by your company?
  • Create your business plan around your dream. If creating something exciting and new or making money is important, how can you make creating something exciting or making money living your dream? If the most important factor is something else, how can you achieve this living your dream?
  • The US Government is desperate for export opportunities involving high tech products which will employ Americans. The opportunities are in new innovations, not commodities. For example, solar panels are high tech but they have become commodities at least in their current configurations. Look for something that is unique and new – for example software that helps to increase the efficiency and security of the grid.
  • Entrepreneurship is not about having a steady income. It’s about creating something new. If what you develop works, you will make money. However, if you want a steady income – go get a job.

How Do You Raise Cash Short Term? Seven Suggestions

Situation: A CEO has identified a new business opportunity that looks promising but will require raising additional cash short term. What are good sources of short term cash, and what will simplify access to these resources? How do you raise cash short term?

Advice from the CEOs:

  • You must be the biggest critic of this opportunity. If it doesn’t fly to your critical eye, it will be hard to sell to others. As a reality check, ask yourself whether the opportunity is something on which you’d bet your house.
  • Build the new capability around a web distribution system that compliments your other capabilities. This broadens the appeal of the offer.
  • Generate an investment proforma and revenue stream. Most investors or debt financers will want to see this. You can position it as an immature business plan backed by your best estimate of the numbers.
  • You’ll need a business plan unless you’re lucky enough to find someone who believes that you can turn any opportunity into gold.
  • Presell subscriptions to target clients to prove the value of the offer – both to you and for investors.
  • Assure that any payments due from you go into an escrow account, to be released on a quarterly or other phased basis pending performance from the other parties within this deal.
  • This is not a venture capital story. Angel investors will seek a lower return for lower risk than VCs. Set some milestones for the Angels that will help them to see that you are monitoring their risk.

Is It Time To Change Horses? Four Suggestions

Situation: A company has a business relationship with another firm. The relationship involves co-development of technology as well as marketing and other support. Portions of the relationship have worked, however, the other firm has not kept its part of the bargain in terms of marketing and support promised. What is the best way to approach the other firm to resolve this situation? Is it time to change horses?

Advice from the CEOs:

  • Have you have clearly communicated to the firm both what you are pleased with about the relationship as well as your level of dissatisfaction regarding lack of marketing and other support promise? To whom has this been communicated? Are you sure that your message has gone all of the way to the top?
  • Do a SWOT (strengths, weaknesses, opportunities, threats) analysis on the current arrangement and alternatives available to you to support your trade-off analysis before taking action.
  • Present a marketing option that will address the situation and ask whether the firm will support it as previously agreed.
    • If they say yes, have a contract ready for them to sign.
    • Negotiate other key items at same time.
    • Be sure to involve all parties on your side in the preparation, including the individual(s) who made the introductions that led to the relationship. Additional heads can bring more insight into the options that the firm and relationship offers. Bring the key parties involved to the negotiation, and be sure to prep them in advance.
  • Business relationships should be based on clearly stated deliverables and timelines. If deliverables are missed then it is time to make a business decision – either repair the situation or part ways.

Is It Wrong to Hire Family Members? Six Considerations

Situation: A small but very profitable business was founded and has been run for two generations as a family-owned and operated business. To boost performance, the CEO hired a general manager with a good background who is not a family member. The general manager has told the CEO that he feels that there are too many family members in the business. The CEO likes hiring people she trusts, particularly friends and family that she has known for a long time. Is it wrong to hire family members?

Advice from the CEOs:

  • Don’t try to change what you’ve already done – plan for the future.
  • Acknowledge the GM’s idea. Tell him that you appreciate his suggestions. Suggest that he test hiring more non-family members to cover one of your low risk market segments. Measure the performance of this team versus the other teams within the business.
  • The challenge with family members is accountability and objectivity. The question for the family owners is whether they have the freedom to act in the interests of the company. Can they put family ties aside when someone is not serving the interests of the company?
  • The essential question for the family that owns the business is – what do you want to maximize? If it’s loyalty and longevity – keeping the family together, employed and in harmony – they can be good. If it’s profits and performance – family and friends can be difficult if emotional ties cloud business objectivity.
  • The upside to family is loyalty and trust. That said, family and extended family friends are different. The latter don’t have the same ties or sense of loyalty.
  • Can you keep employees for too long? Yes. Make sure that you evaluate all employees every year. Establish job and performance standards and make sure that all employees – family and non-family – are held to the same performance expectations.

When Does It Make Sense to Buy a Company? Three Guidelines

Situation: A Company has a key customer that wants to upgrade the Company’s status as an approved supplier. This comes with a catch – the customer demands that the Company reduce the amount of its total revenue represented by its business with the customer. The customer doesn’t want the Company to be overly dependent upon them or their business. One option that the Company may explore is purchasing another business. When does it make sense to buy a company?

Advice from the CEOs:

  • The Company may be working under a false premise.
    • If the Company is truly a critical supplier, the customer is not likely to go away just because they don’t like a single ratio on how the Company runs its business.
    • The risk that the Company takes on buying another business is that this distracts the Company and ends up jeopardizing current business both from thus customer and others.
    • It makes more sense to explore acquiring another company if the Company’s broader goal is to become more diversified, or if new business commitments are forthcoming from this or other current customers.
  • What about this strategy makes sense?
    • Provided that the purchase of another company makes strategic sense, it may be feasible to finance the purchase of that company through a leveraged buy-out.
    • Be sure to build an earn-out with incentives contingent upon the seller staying on and helping to maximize long-term value of business.
  • As an alternative to buying another business, it may be possible to build a new lower cost/price version of the Company’s current product or service and build a new customer base for the lower cost version. This is how automobile companies use the same or similar frames, engines and many of the same components to create different cars for different markets.

How Do You Cut Excessive Overtime? Five Suggestions

Situation: A family-owned business has a family member on hourly pay who puts in excessive overtime. The cost of overtime significantly cuts into company profits. The CEO wants to cut back these overtime hours and get the employee to work more efficiently. At the same time, she feels that maintaining peace within the extended family is important. How do you cut excessive overtime for a single employee?

Advice from the CEOs:

  • Situations like this within a family business are delicate because of relationships beyond the work place. Treat this individual respectfully, but make it clear that you have to act in the best interests of the company and all employees.
  • Develop a job description with this employee that will help to get their overtime under control.
    • Communicate to the employee: “I don’t want to take advantage of you by requiring this much overtime.”
    • Let the individual know that you are looking for additional talent and want to more tightly define the roles.
  • Develop a company policy on overtime that limits the amount of overtime that any one individual can accrue. If anyone starts to approach this limit, then have a process in place that shifts additional overtime to others.
  • This is a serious problem for the company. It calls for company transformation. Enlist the employee as a champion for the cause of transforming the company. Keep this a positive vision.
  • If the individual is not a keeper: start controlling hours, but don’t give a raise. Let them leave on their own time.
  • If the individual is a keeper: give them raise, while cutting overtime hours.