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The bottom level of the BHN (Business Hierarchy of needs) is Sales. Businesses can not exist without sales. I know that start-ups can exist on Venture Capitalist; however, eventually even that will dry up if we don’t start to generate sales.
Level 1 – Sales – Core needs are: Lifestyle Congruence, Prospect Attraction, Client Conversion, Delivering on Commitment and Collection on Commitments.
Lifestyle Congruence – Have you taken the time to really understand how much you need your business to pay you? I’m not talking your dream income or the “I can get by with this” income. I’m talking a middle of the road, I’m comfortable and not stressed over money income. Life has taken me down several paths and the answer to this question has changed over the 15 years I’ve been in business. The answer for this question for me is, I need the business to be supporting me and my husband when he retires in 10 years. We want to prolong taking from his retirement funds until I’m retired. This gives me a clear goal of what I need my business to do in the next 10 years. This is a measurable goal.
Prospecting Attraction – If you have been in business for any length of time, you have learned that not everyone is your ideal client. We can not be everything to everyone and we do not get the same pleasure out of serving the wrong kind of client like we do when serving the right client for us. When I started working with this concept, I backed into it. I found it easier to list out what I didn’t want in a client. I was then able to create a picture of my ideal client. For instants, I do not know enough about restaurants to do their bookkeeping. I know their margins are small and that they need someone that can help them understand their Cost of Goods Sold. If the books are wrong, they can really be hurt. I, therefore, do not serve restaurants.
Client Conversion – You may be converting sales but are they your ideal customers. This isn’t about selling to everyone rather it’s about selling to the right customer. How many of your ideal customers are you converting? That might be an entirely different number and should be the number you are tracking. There were two nuggets of information I gleamed from this section of the book. Customers don’t buy features; they buy benefits. Are you rewarding your sales team for closing clients or rewarding them for longevity and quality of clients? I read this shortly after having chatting with a business owner that is finally delegating sales. She and I were brainstorming on how to pay the person. We were going back and forth about a commission structure. When I read this, I remember thinking… yes… this is what we were missing. We need to reward the right sale not just any sale.
Delivering on Commitment – There is a fine balance between the sales team and the delivery team – even if that’s the same person. We’ve been told not to stop selling. We always need to have a full pipeline; however, if you can not deliver on your promises it will not matter if you have a full pipeline. Your reputation will be in the dirt. I loved the example in the book on how a dog walking service had a reputation for being late. They redefined what “on-time” was and within a few months their customers were happy. It’s all about how you set the expectations. For me, I must check in frequently with my team of bookkeepers. They help me to set the timelines for projects that we take on. In this way, I don’t over promise something we can not deliver.
Collection on Commitments – Sales and delivery on commitment are all great but the sales cycle does end until you’ve been paid. This is an area that I’ve seen some of the successful business owners fail at. I’ve worked with Law Firms that bill out $300-500 an hour – sounds impressive until you see their accounts receivable report and find they have a collection process. Get creative here and don’t be afraid of merchant service fees. It may be a cost to you but having the cash in hand when you need it is a beautiful thing my friends.
There you have it. The five core needs of the first level in the hierarchy. Do any one of these needs resonate with you? Which one do you need to fix next?
I’d love to hear your creative ideas on how you solve these issues in your business.