Entrepreneurial Selling

Vincent Onyemah, Martha Rivera-Pesquera

• Publisher: Business Expert Press
• Year: 2017
• ISBN:
  9781631573224
• Topic: Business
• Subtopic: Sales
• Index: Business

"A must read for every aspiring entrepreneur. A clear guide to effective and realistic selling for those with a "big idea" who wish to achieve success for their products and to avoid costly and ineffective pitfalls in their quest. The framework balances entrepreneurs' creativity with a foundation of solid business principles." --Jim McCann, Founder, 1-800-FLOWERS

PART I

Sales—A Journey and a Destination

CHAPTER 1

Filling the Void in Entrepreneurial Discourse

If you want to be an entrepreneur, the first requirement is to know how to sell.

—Mayra Ortega, Lucas 5, Mexico City

Selling, or the art and science of convincing a party to accept an idea or agree to an exchange, is one of the world’s oldest professions and a vital component of any business venture. That said, the concept of selling continues to be plagued by negative stereotypes that often lead to ambivalence about or even avoidance of selling. To see evidence of this, one must look no further than the discourse and literature around entrepreneurship. Very limited space is devoted to the subject, despite the fact that the world of exchange would be inconceivable without selling. Perhaps even more surprising, the vast majority of business schools and colleges with business curricula do not offer courses in selling. Finally, over the many years we have been working with entrepreneurs we noticed that most do not have adequate materials on selling. Moreover, we realized that the existing sales models are inadequate for entrepreneurship because they are largely based on presumptions that are different from the realities faced by entrepreneurs. This book aims to fill this gap in those resources. Before we could do that, of course, we had to determine how large that gap was.

Our primary goal was to shed light on the experiences of entrepreneurs as they try to make a case for their ideas and products or both to various stakeholders (investors, partners, suppliers, channels, customers, talents, etc.). As we also wanted a comprehensive view, we conducted a study of how entrepreneurs in five continents—Asia, Africa, Europe, North America, and Latin America—obtained resources for their various ventures. Not surprisingly, their success and failure stories offer excellent insights into how best to navigate the road between the conceptualization of an idea and the first purchase order. This book seeks to utilize and build upon these insights in order to facilitate the ability of all entrepreneurs to create and deliver value to all relevant stakeholders.

All forms of entrepreneurship (business-to-business, business-to-consumers, business-to-business-to-consumers, products, services, and ideas) can benefit from the method proposed in this book. Let’s take, for example, a business-to-consumer setting, such as a retail store. Just because customers walk in does not mean they will necessarily spend money before they leave. They might have previously visited other stores and may be planning to visit more stores before making up their minds. In this process, the quality and variety of options, coupled with the quality of interaction with sales associates, affect what and where they buy. That same entrepreneur may need to apply selling principles in order to persuade suppliers and other collaborators to provide a relatively small quantity of quality product at favorable payment terms. This is particularly true when the size of the new venture does not meet the minimum requirement of suppliers and manufacturers. Persuading manufacturers in this context requires a solid sales process and selling skills. In the case of social entrepreneurship, the need to obtain resources and convince potential collaborators of the merit of an entrepreneurial idea calls for sales skills and methodology.

The following chapters will explore the various challenges faced by entrepreneurs when trying to gain support (i.e., commitments and buyins) for a new product or idea. The entrepreneurs we interviewed over the course of our study represent a myriad of industries and from every corner of the earth, and each has offered unique insights and strategies for handling such challenges. Our goal in sharing their experiences, as well as our own findings, is to balance support for entrepreneurs’ creativity and passion with solid business principles.

CHAPTER 2

Why Selling Is Vital to Entrepreneurship

I have never worked a day in my life without selling. If I believe in something, I sell it, and I sell it hard.

—Estee Lauder

There is a famous saying in the world of business: “Nothing happens until somebody sells something.” This oft-cited quote has been attributed to many thought leaders—Peter Drucker and Thomas J. Watson among them—but no matter who said it originally, its truth cannot be disputed. You don’t really have a company until you start selling.

Every entrepreneurial endeavor is about acquiring and using resources profitably. In this endeavor, the ability to sell is sine qua non, or “something that is absolutely needed.” Since selling is so fundamental, it should be treated as a mindset and not a function. A process that is so vital to the building and development of mutually beneficial relationships is a “must have,” not “nice to have.” These relationships are with parties that are either internal (e.g., partners and colleagues) or external (e.g., customers and suppliers) to the organization. Since a major goal of selling is to obtain buy-ins from these parties, the term “buyers” in subsequent sections is used to broadly refer to all parties from whom entrepreneurs may want to obtain buy-in. That said, selling is not just a simple exchange of goods for money. It is also a tool that provides numerous knowledge-acquisition platforms to minimize uncertainties, thereby enabling entrepreneurs to take further realistic steps toward realizing their dreams.

Selling to Know the Unknown

A major characteristic of successful entrepreneurs is their relatively low aversion to risk. Leaving a paid job in order to develop a new venture whose future is unknown is certainly risky. Selling is also an inherently risky endeavor because while it could potentially result in instant gratification; it can also lead to frustration, anxiety, and disillusionment. In the case of the latter, the bruise to one’s ego can be so humbling as to dissuade entrepreneurs from venturing out again. There is not an entrepreneur out there who has not had the proverbial door shut in his or her face; it is one’s attitude in the face of such setbacks that determines success or failure. Perseverance is key, as is learning from one’s mistakes.

“You have to try and differentiate yourself from the crowd,” says Fred Isichei of Edman Technology and Communication Limited, “[In Nigeria] you will also need contacts. You have to be persistent in everything you do. If you give up early you cannot make it … don’t get upset, just keep going forward.”

One of the ways that entrepreneurs have managed risk is by immediately engaging prospects so as to gauge the potential of their idea. Remember, the selling begins once you receive “no” for an answer.

According to John Goscha, who owns the Boston-based IdeaPaint,

…the best thing [entrepreneurs] can do is get in front of customers as soon as possible and try to sell the product, because you’ll learn more from talking to five customers and trying to sell the product than you will doing hours and hours of market research.

“My standard advice,” says Fontaine Richardson of Applicon, “is to talk to as many prospective customers as you can. Just show the product, show a demo of the product. You’ve got to have enough confidence in your ability to develop a product.” Richardson’s guidance is especially apropos when the company deals with technology that consumers may not be familiar with. Applicon, for example, specializes in computer-aided design and manufacturing systems.

Chris Regan, whose company RF Venue handles electronics, sound management, and entertainment, also uses selling skills to gain feedback and cultivate relationships.

The biggest threat to start-ups and start-up sales is not, not having enough venture capital money, or not having a big enough sales team—it’s having something that nobody wants to buy. So I’ve adopted this model, which is called customer development, not product development—where you go out right away and you do interviews with customers and with suppliers and with other people who would be in your company’s reach, and you get them to either commit or otherwise give you insurance that this is something they are going to pay you for. That is the biggest piece of advice that I could pass on.

Others believe the selling should begin even earlier. “Don’t make anything until you sell it,” said Seth Burstein of Events Services, a San Francisco-based Internet service provider, “Sell it on an idea, and if it’s actually something of value, then you should be able to have people fund it beforehand.”

One Hen in Needham, Massachusetts, specializes in elementary education services. “Get the customers first,” advised proprietor Amma Serwaa Latey,

I mean, conversations are free, so we got them and we wrote the curriculum. We have the advantage of having had resources when applying to turn into a company beforehand. You need to create the product with a user in mind.

“I’m not so sure it’s playing safe as opposed to smart,” said Joe Gustafson,

where you can get a dialog and you’ll hear feedback of what people like about it and what they don’t like … and that helps you refine the product, as opposed to trying to mass market it and not having any idea of what’s going on.

Gustafson’s company, Brainshark, is a software developer in Waltham, Massachusetts.

As these successful entrepreneurs point out, the seeds of selling can be traced all the way back to that “light bulb moment,” for that is when the entrepreneur must first begin to establish the merit of his or her idea. This means enlisting people who can provide “free” feedback; getting an audience with prospects; dispensing information and conducting demos; convincing potential investors; enrolling partners and hiring employees; appealing to suppliers and distributors; and persuading individuals with relevant knowledge and social capital to join an advisory board. Arguably, most entrepreneurs know that passion is a necessary component for such tasks; however, many do not connect them to the ability to sell. They still think selling is all about an exchange of good or services or both with the end-user. The reality is, however, that selling begins long before that first check is cashed.

“[We] knew we wanted to go into business together,” said Nate Garvis of ERN Designs and Make it Civic,

We both had side businesses and families to support … we didn’t just want to throw our money at something and say we’re in business. We went into business when we got our first client … a library. We created a design for the library, initial proposals … we put a lot of work into it without compensation until [they] said, “Yes, that’s cool. We’ll pay you guys to build that and launch it.”

Each entrepreneur has to determine the best time he or she should begin selling; this decision is based on a number of factors as the nature of their business, their target markets, and geographical location. That said, everyone, regardless of the type and size of their venture, must learn how to assess the resources at their disposal and figure out how to utilize them.

One of the dominant frameworks for understanding entrepreneurship rests on three pillars: opportunity, people, and capital (e.g., Acs and Audretsch, 2010) as depicted in Figure 2.1.

While most people would agree that people and capital are resources, the classification of opportunity as such is not as obvious. We contend, however, that each of these pillars is in fact equally valuable resources. We define opportunities as a latent value that an entrepreneur is hoping to bring to life and commercialize. Assuming anything that can deliver value is a resource, opportunity certainly fits into this category. It therefore stands to reason that when considering the three pillars of entrepreneurship, the important factor is not whether you have them, but how you use them to get more. Selling—the art and science of persuasion—should be at the center of every entrepreneurial discourse; all too often, however, this is not the case. This is because while entrepreneurs, by definition, are visionaries—people who are able to identify and cash in on opportunities—they also tend to underestimate selling and fail to recognize its importance in realizing their dreams. Oftentimes, selling begins close to home; this means tapping into your existing networks.

Figure 2.1 The three pillars of entrepreneurship

This was the strategy used by Steve Onyemah of S. Lloyd, an HR outsourcing company in Lagos:

[As soon as] the company was incorporated, I started speaking to my friends in the Nigerian setting—having been in the business world for a while and a member of the Ikoyi Club. I started canvassing … different environments, trying to let people know that I’m coming up with an outsourcing company that was going to provide contract staff to different companies. I was looking for my classmates in the Lagos Business School and friends I made while running the companies I had worked for. [Someone] told me about Gas Link (Nig.) Ltd., which provides gas to different manufacturing companies in Nigeria. Fortunately for me, the CEO of the company happens to be a family friend. This contact proved to be invaluable; after determining that Gas Link was thinking of outsourcing, Steve submitted a proposal and was given a trial run.

Hasnain Noorani of the Pride Inn also took a proactive approach to selling, and one well suited to his industry—hospitality and entertainment:

I had already planned my marketing strategy and I knew exactly what I was going to do. My hotel opened in September, so I started making my list in July because there were many companies in Kenya. It’s not only about [collecting] names, but also about finding out who the right people are. I would spend the next few days calling banks, then I listed down tour operators and in two to three days, I would spend time calling tourist operators on the phone and getting contact numbers. I was doing it on a daily basis. Once I had a database of a list of all clients, I then prepared the invitation cards. I knew that once the cocktails started, they would be following each other [closely] and I would not have the time to start doing these things. My timespan was one to two weeks. For example, if we were holding a cocktail party, then my cards would go out two weeks in advance. That would give people enough time to make room in their schedule. A week later, I would send everyone an email reminder.

The above examples illustrate that selling has a much broader role in entrepreneurship than it is credited with. One reason for this is the narrow view assigned to it by society. Selling is usually defined as the commercial exchange between sellers and buyers—when in truth this is just a subset of selling that delivers a particular type of capital—(i.e., operational cash flow). While achieving sales proceeds is critical to the life of any business venture, the role of selling is clearly much more encompassing. In fact, limiting the idea of selling to customer acquisition an...

Table of contents

• Cover
• Title
• Copyright
• Introduction
• Acknowledgments
• Part I: Sales—A Journey and a Destination
• Part II: The Selling Process
• Part III: Avoiding the Pitfalls
• Bibliography
• Index
• Adpage