How to Have an Effective Sales Force

In business, nothing happens unless there is a sale. With the advent of the internet, websites have reduced the need of a sales force. However, for the foreseeable future, you are still going to need an individual go to your customers and ask for the sale.

Finding individuals that know your products and has the ability to get the customer to agree to purchase your product is absolutely critical to the success of your business.

How do you find these individuals? Unfortunately, there is a large subset of folks that try working in sales when they cannot figure out what they want to do for a living. They will go on until they are fired or decide it is not for them and move on to their next profession. They are a waste of your most valuable resource, your time. As a business owner, how do you find the 'good ones'? The answer is you look for them wherever you can find them.

A business owner I know goes into restaurants, bars and other service related business to find his sales force. If he finds a server giving excellent customer service, he watches them for a while seeing how they handle all types of customers. If the server is very good at what they do, he approaches them and offers them an extremely good dales position. He knows he can teach an individual his product line and techniques on how to sell. However, he has found out the hard way that he can't teach the desire to see to the customers needs and the ability to be 'nice'.

How do you motivate these individuals? First off you need someone that is motivated by both money and customer service. It is very possible for the right individual wit the right product to become wealth. You want to encourage this because if they are making money, so are you. A 'commission only' salesperson are only paid on performance. If they do well, they do very well. If they don't they starve. So they will be more aggressive in making the sale.

A salaried or hourly employees with no commission arrangement are generally the least motivated and effective. They are going to be paid on Friday, no matter how much they sell.

The following links contain more information on finding and managing sales personnel:

http://www.ehow.com/how_5709768_recruit-sales-force.html

http://www.gaebler.com/Hiring-Sales-People.htm

http://www.ehow.com/how_7528855_build-successful-sales-force.html

>http://www.customerthink.com/article/hire_great_sales_reps_avoid_personality_myth

Alternative Financing: Is it right for you?

These days getting a bank loan is very difficult. What is a business to do? There are other alternatives than the standard model of going to the bank for a loan.

Some financing alternatives are difficult but possible, others are extremely expensive but possible and some are not suggested but possible. With the current economic situation, a business must look at all of its possibilities.

Don't Borrow Any Money, Ever! - This is extremely difficult but possible. You plow earnings back into your business. It is slower, but gives you a solid foundation for true growth of your business. Too may people equate wealth with profit, it is not. Wealth is equity. It is what you actually own after everything else is paid.

"Love Money"- The people that love you (friends and family) lend you the money. there are pitfalls to this however. To quote Dave Ramsey, "whenever you borrow money from your family, somehow the Thanksgiving turkey tastes different". This is generally not a business transaction, it is a relationship transaction. Therefore, unexpected business problems could damage you relationship with the people who love you. Is it worth it?

Home Equity Funding - This involves taking a second mortgage on your home to raise money for your business. This method was very common in the past but with the real estate crisis this method has virtually dried up as a method of raising funds. It may still be an option in the future but less so now.

Trade Credit - To keep your business, some suppliers will give you terms for the things you buy from them. To example, you buy a piece of inventory from a supplier and they will give you terms of 30 days. This is a way of stretching your dollars buy by buying on things on credit. the downside to this is if you don't pay on time, a valuable supplier can cut you off or insist on COD.

Credit Cards - This is a highly dangerous way of financing because of the very high interest rates. I know of very successful multi-million businesses that have started with credit cards, however due to the risks it is not suggested.

Factoring Your Invoices - A factoring company buys your accounts receivable. They will give you a discounted amount immediately and they will do the collections. There are two general types of factoring: with recourse and without recourse. With recourse means that if you accounts receivable is not paid by a certain time they will give it back to you and they will want their money back. without recourse means that you just sell it to them. The downside is that they will discount (pay less than the face value) of the accounts receivable. You will be receiving immediate cash but the cost is very high.

Sell a Percentage of Your Business - Another money of raising money is to sell a percentage of the business for cash. In doing so, you are taking on partner. This is a viable way of raising cash but you are slicing up the pie.

Have Your Customers Pre-Pay - Let's say for example, you are a manufacturing company and an order comes in to build one of your products. You can ask for a percentage up-front before starting the manufacturing process. This is a way of bringing in some cash and assuring payment.

Private Placement Loan - This is becoming more common, especially with the advent of the Internet and very low interest rates available for savings. this entails borrowing money from an individual (non-family) at set terms. At this time, this is a small niche of the lending market but growing.

Non-Bank Lenders-Some non-profit economic development organization will lend money much in the same way a bank will. there may be special lending criteria and limits depending on the non-profit group, but funding is available.

You Have Started Your Business, Now What?

As you load up your sparkling new shelves with brand new inventory you wonder, now what? You finish up that last piece of code to open your software business, now what? You have been dreaming about starting a business for years and you have finally done it, now what?

Starting off, a new business will have only one goal: SURVIVAL. If the business sells enough, it can stay in business and make a profit. If not, it will close down, lose money for the owners or even force the entrepreneur into bankruptcy. A practical strategy for the the next stage of your business must be quickly formulated. Here are three ways to help.

First, target your market and let your target market know you exist and what you do. This is done by marketing your business to your potential customers. A business can spend a lot of money on advertising and marketing, but is it reaching its pool of potential customers? If you target market is upper middle class 35-50 year old women it would be a waste of money advertising on a TV show that targets 18 to 35 year old male NASCAR racing fans. You must know who your target market is and aim your entire marketing effort towards that target. It is not rocket science.

Second, set an appropriate price point. This can be a tricky task as it is mixed up with psychology, basic human nature and perceived product value. for example, Tiffany & Co. and Wal-Mart both sell watches. Tiffany & Co. profitably sells watches at price points of $20,000 or more, Wal-Mart profitably sells watches with prices starting at about twenty dollars.

A watch is just a mechanical device that divides time into hours, minutes and seconds. So why is there such a huge difference in price? Well a watch is not just a watch. Tiffany & Co. has targeted its market and positioned itself as a provider of very elegant, high-end jewelry. In this segment of the market, price and even mechanical accuracy are less important than design of the watch and the status of the brand. At Wal-Mart you can buy an inexpensive watch that may need replacing in a few years but could be a more accurate time piece. Both companies make money selling watches at different price points because they target very different markets.

Third, find ways to make it easy for your customers to purchase the products or services of your business. This seems straight forward, but it is not. Customers tend to buy more (20 - 50 percent more) if they can use a credit card than if they use cash or a check. Somehow when people use credit cards it does not feel like they are spending 'real money' and therefore spend more. Also consider using companies like PayPal for the ease of use by your customer.

From the moment you open and every moment from that point forward, understand who your customers are, set price points to attract your targeted customers into your business, know the tricks that will keep them interested in your business and coming back.

There is never a straight and simple answer to these questions as the marketplace is a moving target, dependant on the changing wants and needs of the customer. If you need in determining the 'what now' or next steps to building your successful business contact your local University of Georgia's Small Business Development Center at Dalton@georgiasbdc.org for advice and suggestions.