I would like to touch upon three points that I consider critical to the success or failure of a New Business Venture. Its difficult to create a business from scratch , to turn your ideas into a “Salable” product that satisfies customer needs amidst a very competitive B2B environment however if you have decided that 2020 is your year to Business stardom you may want to pay attention to the below common mistakes.
Chasing investors rather than chasing clients.
To understand this we need to go back to the basic purpose of every business which is to generate revenue and profit.
This process has two major pillars a) your business and b) the client. Without clients, your business will not generate profits and revenue and will ultimately fail. By investing the greatest deal of your time and brain activity pitching to investors instead of pitching your business to potential clients, thereby helping create Brand Awareness, shifts your attention from your number goal which is not to secure huge funding round but to Acquire New Customers.
For some reason, young entrepreneurs believe that securing external funding is their elevator to success. Remember that funding through any source equals either debt or equity. In first you need to repay someone with an interest rate and in the latter, you need to allot your rights and ultimately decision-making process to a third party. One of the safest ways to ensure survival for your startup is to have a business model that lets the product pay for itself. Just because you have a great idea, this doesn’t mean that you’ll get funding.
And then?
Lack of Sales Focus.
As the first step in this process, you should consider establishing criteria for what kinds of companies you are targeting their geography, industry, and size. Then decide if you want to target other Starts ups or Established brands. Once you have identified your ideal company types, break it down to an individual level. What roles and titles are involved in engaging your business? Who are the Key Decision Makers? You want to be talking to the people that can take decisions and control budgets.
Decide if you want to target other Starts ups or Established brands. Established brands have big budgets but longer sales cycles and are more difficult to acquire. Next to this their payment terms may vary from one to up to 3 months or longer in some cases with all the latter entails.
Startups lack big budgets and are by nature, volatile, making them unpredictable customers however their Sales Cycles are shorter and are easier to approach.
Understanding how to deal with Long and Short Sales Cycles can have a huge impact on your cash flow and ultimately to the viability of your business especially if you are not relying on external funding.
Not hiring the right people.
The quality of the people you hire or work with will determine up to a great extent the outcome of your efforts. The caliber of the people you work with, in-house or outsourced, should correspond to your vision of your Brand in 10 years down the road.
I understand that you need to fight your urge to control every aspect of the business yourself, including hiring because you are after all the owner or founder, nonetheless when hiring Salespeople make sure you are asking the right questions.
Can you help us achieve or even exceed our goals? How will you do this? How are you going to turn leads into New Partnerships / Revenue? Can you identify the SP's or USP's of our product / brand / service ?
If one can not provide clear answers to the above he/she is , most probably, not the right person since he can not grasp a) what your business is about b) how to turn your business concept into a “Salable” product.
Do not look for people that fit the description look for people that have the caliber and are able to deliver.