Photo by American Advisors Group

I am writing a blog series on how to start a business.  If you’d like to review previous posts on this series, you can find them here:

So You Want to Start a Business
Revenues, Direct Costs and Expenses… Oh My!
Hourly Rates
How Can You Earn More Revenue without Spending More Time
Direct Costs and Gross Margin
Keep Expenses LOW!
Profit is NOT an Ugly Word
Creating a Financial Forecast
Sanity Check – Does your Business Make Money?
Market Research… it’s about the Questions!
Do Free-Samples Work?
Marketing is the Key to Starting a Thriving Small Business


We have covered the challenging topic of Marketing.  If you market successfully, you will have prospective customers interested in doing business with your company.  Once you have these new prospects, you are challenged with converting them into clients.  The process of converting a prospect into a client is called SALES.

Most new business owners freak out about selling something.  They went into business to provide a technical service to clients… not to sell.  They have flashbacks of the days they had to sell something door-to-door for a school project and are petrified of asking someone for money in exchange for their service.  Sales shouldn’t be that scary.  In order to make sales less scary, it is important to believe that prospective clients need your product; but they still need convincing.

The Sales/Buying Cycle

Every different type of service or product has its own sales cycle.  Like marketing, a sales cycle needs to mimic a prospective client’s buying cycle.  I want to focus on selling service as opposed to retail sales in this post.

5-Priorities of a Buyer

In service sales, the client will make a buying decision in the following order: 1) Person; 2) Company; 3) Product; 4) Price; 5) Timing.  Let’s break these down a little further:

Person:  People buy from people.  If your prospective client knows you from a positive previous relationship, you probably don’t need to convince this client that you are trustworthy.  This is the advantage of networking.  Whether you are networking in your personal life or business life, people will get to know you so they can either refer you to their friends or will buy from you directly.  If you don’t have a previous relationship, cannot be introduced by someone, then you need to convince your prospective client that you can be trusted to provide a great service or product to your client.  If your product is somewhat complicated, this trust is even more important because your prospective client will not understand the product and/or service, so they will need to trust your character and your expertise.

Company: Once a prospect is happy with the sales person, they will consider many factors about the company.  Be careful with this one.  Many sales people will think that because their company is large and well-established, they can coast through this one.  However, you need to be able to translate characteristics of your company into real benefits for the buyer.  For instance, a smaller client may feel more comfortable with a smaller company because of similar cultures.  There are advantages and disadvantages of several company characteristics.  As a sales person, you need to understand the advantages your company has over its competition and be able to articulate these advantages in client benefits.

Product:   The third buying criteria for a prospective client is the features and functions of the product you are selling.  If you are selling a commodity, then this element has less value.  However, if you offer something different than your competition, you need to explain why this difference matters to your prospective client.  If you know that your price is higher than your competitors, you especially need to educate your prospective client on why your product is better than your competitor’s product.

Price: Most buyers and sellers think that price is one of the most important considerations when making a buying decision.  However, price is only a measuring stick that most buyers use to calculate value.  If you have failed to be successful in the first three elements of the sale, you will most likely fall flat on your face when it comes to price.  A buyer is thinking about two things when it comes to price: 1) can they afford it; and 2) is your price going to result in the best value for them.  There’s not a whole lot you can do about #1; but there is a lot you can do about #2… And you will have conveyed most of this information in the first three items.  If you are losing sales due to price, you really need to re-think your business model and get your prices inline with what your market will bear.

Timing:  Timing is the amount of time a prospective client will need to wait for your product or service.  In our busy world, more consumers are becoming hyper-sensitive to timing.  If you can get a product overnight from vendor #1; when you have to wait a week for vendor #2, you are more likely to go with vendor #1, all other considerations being equal.

Sales Process Example

It may be helpful to see how this buying process works in real life.  Let’s consider the example of a home owner named Karen whose furnace has just failed as the weather is getting cooler.  Karen has completed an internet search and has found three companies she feels can do a good job.  Karen invites each company to give her a price to repair or replace her furnace.

Vendor #1: ACME Furnace Repair sends Kevin over to Karen’s house to look at her furnace replacement job.  Kevin is running 10-minutes late and didn’t call Karen to let her know he’d  be late.  When he shows up, he looks disheveled in filthy technician’s coveralls.  He looks at Karen’s furnace and exclaims, “You’ll need to get this replaced right away, or you’re screwed.  I’d say this’ll cost you $2,000.  When can we start?”  A grimace covers Karen’s face as she replies, “I am considering a few other companies to do this work.  I will let you know once I’ve gotten their proposals.”  Kevin tries to convince Karen to move fast, but she is undeterred in hearing what the other companies have to offer.

Vendor #2: Corporate Giant sends Jane over to Karen’s house to give her a quote on her furnace replacement job.  Jane is on time and is dressed in a professional business suit.  Jane wants to look at Karen’s furnace and then talk with her about what Corporate Giant can do for her.  After Jane is done looking at Karen’s furnace repair, she sits down with Karen at her dining room table and shows her a slide presentation on her laptop computer.  Jane describes how Corporate Giant is a very large company and they dominate the world of furnace replacement projects.  Jane talks about how their products are the best in the land and describes features and functions in jargon that Karen can’t understand.  After an hour in her house, Karen finally asks Jane what the furnace replacement will cost.  Jane punches a few more keys on her laptop and says, “You can get the services of our great company for a mere $6,000.  We will replace your furnace with our top model and you will be super happy.”  Karen smiles and tells Jane the same thing she told Kevin, “I am considering a few other companies to do this work.  I will let you know once I’ve gotten their proposals.”  Jane tries to convince Karen that all of the other furnace replacement companies are small and unreliable, but Karen decides to hear from the third company.

Vendor #3: Joe’s HVAC Services sends Frank to Karen’s house.  Frank was 5-minutes late, but he called to let Karen know he was running late.  Once he arrives, he apologizes for being late.  Frank is dressed in a Joe’s HVAC Services uniform which is clean and ironed.  Frank takes off his shoes at Karen’s front door.  Frank says that he’d like to look at the furnace before he talks about different replacement options.  After Frank is done looking at Karen’s furnace repair, he sits down with her at the dining room table.  Frank starts off indicating that Karen has three options: 1) he can repair Karen’s current furnace, but because her furnace is old, it will probably only last another 2-years with the repair;  2) he can replace the furnace with a low-cost model that has an average energy efficiency for $5,000; or 3) he can replace the furnace with a high-efficiency model for $7,000.  Frank explains that if Karen goes with option #3, the utility company will provide her with a $1,000 rebate; and the savings with the higher-efficiency model will pay for itself in 3-years.  After describing the furnace replacement options, Frank slips across a green sheet of paper and indicates that there are several home owners Karen can call to check on the services that Joe’s HVAC Services has provided other happy clients.  Frank prints out a formal quote with the three options along with the time required for each option.  After Karen has had a chance to look at the quote, Frank asks, “So, I’d like to know.  Do any of these options look viable to you?”  Karen replies, “I really like how thorough you’ve been, but I need to consider your proposal with others we have received before I make a final decision.”  Frank follows up, “I encourage you to call our references, and would be glad to answer any other questions you may have before you make your final decision.”

The Decision:  After Karen reflects on her three different experiences with three different companies, she decides to use Joe’s HVAC Services and buy their high-efficiency furnace option.  Karen makes this decision because she likes Frank and was impressed with courtesy and his knowledge of her specific situation.  Karen also heard great reviews from the references Frank gave her.  Karen liked the low-price that she got from Kevin, but you questioned whether ACME could actually deliver on this low price.  Karen never received a formal quote; and the Kevin didn’t seem like he could deliver on what he claimed.   Karen was impressed with Jane’s professionalism and the stability of such a large company like Corporate Giant.  However, Karen was not convinced that Jane understood as much about her furnace situation as Frank.

As a small business owner, I hope that you can understand why the sales-person matters so much in winning business for your company.  You can also understand how your prospective clients will make buying decisions.  The example I used was intended to show a very simple sales cycle.  Each furnace sales-person had a short time to make an impression to win Karen’s business.  In more complicated sales, the education process can take longer.  However, the buying criteria is often still the same.

What Can You Do?

As a small business owner, it is imperative that you map out the buying process of your prospective client.  It is also important that you train people that you put in front of prospective clients on how to follow your process.  As you can also imagine, it is very critical that you screen personalities of sales people to make sure you are assigning the right people to talk with your clients.  It is often the case that small business owners are their own sales people until they feel like they can hire a sales person.  If this is the case, you still need to establish and follow a winning sales process.

What is a Sales Process?

While our furnace replacement project was somewhat simple, each company followed a sales process; whether consciously or unconsciously.  Here were the processes:

Vendor #1:

Step #1: Don’t worry about dress; and show up at the appointed time give or take 15-minutes;
Step #2: Look at the furnace;
Step #3: Convince the client the world will end if they don’t replace their furnace right away;
Step #4: Throw out a low-ball price to get the client to sign on the dotted line; and
Step #5: Pressure the client to buy-now, if they don’t sign on the bottom line.

Vendor #2:

Step #1: Dress to impress and be punctual;
Step #2: Look at the furnace;
Step #3: Deliver impressive presentation about your company’s qualifications;
Step #4: Don’t give a price unless asked;
Step #5: Convince client they are an idiot if they don’t use your large company.

Vendor #3:

Step #1: Dress professionally;
Step #2: If you are late, call to let your client know;
Step #3: Take shoes off at front door;
Step #4: Look at furnace to understand various options;
Step #5: Educate client on furnace replacement/repair options with prices;
Step #6: Give client list of references;
Step #7: Print formal quote with all options;
Step #8: Ask for the order.

As a small business owner, you can either document a winning sales process; or trust your sales people to do the right thing.

Basic Sales Process Template

For those of you who want a generic sales process, here is one that you can modify to suit almost any sales situation.

Step #1: Follow up promptly with prospective client on request for service;
Step #2: Show up punctually with appropriate dress (often match client’s dress expectations – not too formal and not too informal)
Step #3: Be courteous and kind (smile).
Step #4: Ask open-ended questions or investigate to understand prospective client’s problems.
Step #5: Discuss details about prospective client’s specific problems and possible solutions.
Step #6: Describe benefits of your company and products in a way that reflects your prospective client’s specific situation.
Step #7: Ask for client’s feedback on your proposed solutions.
Step #8: Ask for the order.

Acuity Small Business Consulting has developed sales cycles for service-based and solutions-based projects for its clients.  Each industry’s sales cycle is somewhat different.  We’d be glad to help you with your sales cycle.  You can schedule a free consultation to learn more about what we can do for your business.