Well, you have a startup and you’re thinking a sale of the company is likely. So, how can you get the best outcome in the current environment?
Tips to Start Sales for your Startup –
Basically, when your business grows to a considerable size, you will need to think about a little more sophistication, like customer relations management systems, sales management, and territories. But at the start, all you need is to surely have a sales strategy in mind.
Hence, here are some points that you need to consider to get the sales boost for your startup.
Tip 1) Have a vision and know the Buyers
“Selling on existing EBITDA can only get you a valuation based on today,” said Jack Berlin, who is the CEO of Accusoft, “but if you can make the acquirer believe in the potential of your startup, you can sell for a much higher valuation. Think about what your startup can do for the acquirer and start creating a product/integration plan for post-acquisition. Any acquirer would be interested to know where you can take your company in the next five years without any investment. ”
So, if you want to drive the best valuation, you need to be convincing about the growth opportunity. Hence, you must have a Compelling Vision.
Also, Marius Moscovici, who is the founder and CEO of Metric Insights, once told that “If you want to sell your business, ideally you should be thinking about acquirers at least 18 months in advance of the sale. Identify a list of potential buyers and start building relationships early so that when it is time to do the acquisition dance, you have multiple suitors who are interested in taking you to the ball.”
Tip 2) Listen and Make Them Understand
One must understand the logic that if you wanted to move mass quantities of goods, then you need mass quantities of people. And to get mass people you must make sure to know your buyers as well as listen to them.
The customer may at times defy logic, but they are always right and they must remain as your first priority. Hence, be a good listener and the result will be, you as the largest, most powerful brick and mortar retailer in the world.
Also, anyone who has started sales will know that customers reject products/services that they don’t understand. When you are new to this field, and you start to have inquiries related to your services, you focus on grabbing more and more clients. But, You cannot afford to make mistakes. This is the time where you have to focus on building trust and not just the clients.
So, get to know more about what the client wants and how does he want it. Don’t jump straight towards making a quotation and sending it over to your client. First, understand your client’s requirements and only when you’re sure about it, then ask your client about the budget. Because it might happen that you pitch a budget which is too low or too high and you might lose the client.
Tip 3) Clean the Workplace with Minimum Viable Offer
Most startups are complete messes. So, it’s obvious that this creates plenty of doubt when buyers are considering a deal. Thus, you really need to get your books in order, your contracts in order, your IP in order, your cap table in order and so on.
In fact, you should set up a data room, such as Dropbox. This basically means organizing your company’s information in folders, which can make the due diligence process much faster. Basically, you would require a Complete Corporate Cleanup. And this in return will impress potential buyers.
Also, your team needs to be on the same page, such as on the valuation parameters and other key terms, like: What if the buyer shuts down the product? What if the buyer only wants to keep certain employees? Will your company be run independently?
Hence, you require a Minimum Viable Offer as well.
Tip 4) Sell the benefit, not a Comparison
How you market yourself is all about highlighting what makes you different. There are three major ways to do that.
- Cost (you know how to price a product better than the competition)
- Quality (you’re better)
- A combination thereof (you offer the better value)
But how you sell yourself is different than how you market yourself.
You can tell someone that you provide a product or service that is cheaper or more effective than that of another business, but that doesn’t say how much better you are going to make the customer’s life. Selling is about the benefit. A comparison may highlight the features you offer, but you are always selling benefit.
Competitive startups fail to understand that people not caring enough about your product is your true competition, not some other startup.When you’re thinking about how to position yourself, look at the complementary products, not the competitive ones. Ask yourself two questions: How much value can I create for my customer? And how much value are they getting from the other products they use?
Tip 5) The Art of ‘Word of Mouth'(WOM)
Word of mouth marketing makes use of many media. It is not just a matter of telling your neighbors. More than three-quarters of buyers trust WOM compared to any other medium. Basically, there are 2 methods of WOM –
The direct methods, it includes :
- Typical neighbor talks and sales calls.
- Public speaking at conferences, local associations, client events.
- Customer referrals.
- User conferences, where you seek to engage your customers and link them to one another.
- Training events, ones you arrange or ones in which you participate elsewhere.
- Demonstrations at trade shows, on client premises or for client staff.
The indirect methods, it includes :
- Podcasts, that you post on your website or Youtube.
- Online forums and live chat in its many forms.
- Consumer reports and user information sites.
- Aggregates of consumer reviews, especially in local marketplaces.
- Company grading sites that capture the wisdom of measure against criteria.
- Blogs/articles, yours or other people’s (where you post comments).
- Email newsletters and e-blasts to your mailing lists.
Tip 6) Be Human
This might be a very obvious point and also I’ve mentioned this point in few of my previous articles as well. But the reason why this point is very important is that many startup companies tend to follow templates. It might make your work easier but people hate templates!
The proposal must be one-to-one. Robotic content is always dry. It lacks that spirit and responsibility to it. Your writing will reflect how well you have digested their requirements and their wants. There are supposed to be creative sequences in your way of presenting. It must be crisp, straight and to-the-point.
Thus, write like you’re just some friend writing an email to another friend. Basically, write like a human being! This way you could create a very good bond between the buyer and yourself.
Hence, remember, the faster you learn to write like a normal human being, the faster will your product reach the other human being.
Tip 7) Every Customer Counts
Want to know the best way to reduce the valuation on the sale of your startup? The answer is simple: actively seek a buyer! No doubt, this only looks like a desperation move but you would never know which customer is your next buyer.
Even though no one customer should define your business model, you should leave yourself the flexibility to cater to each individual customers in specific ways. The most likely way to get customers to close the deal is to spend a little time on each individual target. You need to personalize the correspondence as much as possible. Figure out why they’re successful, what their hobbies are, and what conferences they like going to. The more you can understand them the more likely you are to speak in their language.
Basically, it takes time to prepare and learn about every target. But as you get more customers you’ll quickly learn what similarities and differences your customers have. It becomes easier to figure out where to focus and how to craft your message.
Tip 8) Market your product before it’s ready
Some businesses wait until their product is perfect before they do any marketing or awareness campaigning. That can be a costly mistake. Many businesses expect to sell their product as soon as it’s ready. But if no one knows about it, then demand will start at zero until you undergo a marketing campaign to build brand awareness for potential customers.
It’s better to do preemptive awareness campaigning, even if it’s minimal, to let potential customers know your product is coming. You can sell the benefit before the product has arrived. This way, when the product is ready, so our customers!
Also, one must realize to Deliver quality over quantity. A product can sustain the quality it delivers no matter how many features it delivers. If there is one product that has only ten features and delivers the quality, and another product which has 20 features but is poor in quality, the first product will always win and make wonderful sales. If your product is not promising, you can’t make a good name for your company.
Tip 9) Advisers, Support, and Referrals
For a startup, you really do not need an investment banker as an adviser (such an adviser is usually too expensive anyway). But you definitely need an experienced attorney.
Also, now that you have made good sales, earned the trust of your customers. So, what next? Well, now comes the point where your product is in use, and there will be problems or difficulties that your customers might be facing while using your service or product. So, when they need your help, don’t make them wait, set quick and easy support. It is very important to make them realize and feel that you were not just a mere stereotypical salesman who sold some shit to them, but rather a guy who sold something that was worth their money and hope.
One must also realize that Money never sleeps. i.e. Referrals are important as well. 80% people never ask for a referral. It is a good practice to ask for referrals because when people don’t know your product but they know someone who uses it and whom they trust and believe in, they might come to you. It is the easiest way to crack great good deals.
Tip 10) Work hard, Earn it and Never Give Up
For the most part, you need to have a poker face when it comes to positioning your company for a sale. Actually, a good strategy is to talk about a partnership or alliance with a potential buyer.
But the hardest part of bootstrapping your sales is sticking with the process. It can take a very long time to get your first deal. But each deal comes faster with practice and more information. Hence, just go for it!
Your initial hit rate will probably be terrible. If it isn’t, you’re doing something right. You might come across many hurdles and obstacles in your way but just have an aim to make your hard work worth it. So, you could have a pattern, happy customers, a model that looks like it could scale, and real tangible revenue.
Remember, not giving up is the most important part of your sales startup strategy. So, give yourself time to build yourself a business model. Once you’ve done that, no one can stop from being successful.
Hence, your passion, your product knowledge and your understanding of customer needs are essential to the startup from the get-go. You may not have direct selling experience, but do not underestimate yourself. It is likely that you are what is called as an unconscious competent. So, use these tips wisely and grow the sales revenue of your startup to a huge extent.