Tag: CEO

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When Do You Create a Board of Advisors

iStock_000005458028XSmallThere comes a time when assembling a group of experts to help grow your business is considered smart leadership and a business best practice. When you reach a stage in your business where you have exhausted the collective internal experience, knowledge and skill to achieve your next phase of growth — create a Board of Advisors.

Every purpose of creating a board will differ for each organization. A business owner may be faced with great opportunity for rapid growth or significant challenges from conquering the next ascent in revenue, market or product expansion. The appropriate time to consider assembling a board is when the business path forward is less clear or cluttered with obstacles that could derail you from achieving your business goals. You have reached that period in your business when their is more “unknown” and you fear what you don’t know.

A Board of Advisors is different from local peer groups, leadership councils, service providers and executive mentors. Your board is a committed team of individuals working on your business. Advisors should have congruent skills that compliment your leadership. As an example, you may find that by adding a distinguished industry expert or technical guru best serves the next phase of your business  Adding market or sales expertise can open new doors, while a finance or legal expert can provide insight to reduce risk.

Experienced executives want to help entrepreneurs, startups and leaders that seek advice to grow their business.  It validates their business “wear and tear”, while providing meaning and value to their experience. The board should round out your executive court, as these advisors are typically not available to hire as full-time employees and can be “unaffordable” for smaller businesses. They also may be those exclusive experts that will always be in a role of advising and never work for a single entity.

The reason you bring experts together as board members is to increase effectiveness and efficiency in decision-making and strategic planning. A board will perform best when there is an exchange of ideas in an organized environment, centered around a single business issue. The board format is designed to solve problems. Each board member brings a different set of experiences, viewpoints and resources. Having a board working together with you to assess challenges and discuss opportunities, gives you invaluable advise that can save you significant time and money versus the “learn as you go” approach.

Board of Advisors are not in a role of governance. They do not have fiduciary responsibility to protect shareholders or investors, though they should be very responsible in providing any guidance related to financials or spending company money. Only an elected Board of Directors for a public corporation or non-profit have governance over a company. The Board of Advisors is a non-binding group of mentors and experts that work collectively with company leadership to achieve your business goals.

Advisors should be completely aligned with your goal and mission and also be able to challenge you by providing recommendations and views that will differ from your own. You do not want a board that agrees with all your ideas or thinks as one. Why waste your time.  They should differ in expertise and have the ability to assess short-term and long-term strategies, out loud in a group discussion, without fear of reprisal.

A board is typically five to six members, excluding the CEO or business owner.  A Board of Advisors should consist of experienced and skilled individuals in varied areas where your business is lacking in comparable talent. In the early stage of a business, Board of Advisors are typically unpaid and may or may not have a long-term financial commitment through future equity.  As a business leader, be cautious of giving away ownership in your company early, this could be a note of contention with future financing.

The commitment of an advisor should be a minimum of two years.  It is valuable to set a term limit in reviewing board members, as you company is expected to grow and you need to be able to add new board members with different skills during later stages of your business.  Board members must also be committed to attend meetings.  A small business will typically meet with the entire board every 8-12 weeks.  If a board member misses more than two meetings a year, consider replacing the advisor.

Board members should not be family members, employees, contractors or service providers you pay for other functions in your business. It creates conflict of interests. Though a board of advisors are not employees, you should treat your advisors as accountable members of your C-suite. Set expectations, ask for help and use your board to help you achieve your goals.  If you simply assemble your Board and provide an update report on the business, you are wasting valuable resources and time.

Board of Advisors are trusted members of your inner circle. You can share with them confidential information and discuss highly sensitive matters that are not open for discussion with anyone else in your company. Your board should consist of credible experts that will provide insights you can not gain from any other resource. They should open doors, help you gain new customers or strategic partners and provide actionable ideas to help you achieve success. If you want to grow, create a Board of Advisors.

“You sit at the board and suddenly your heart leaps. Your hand trembles to pick up the piece and move it. But what chess teaches you is that you must sit there calmly and think about whether it’s really a good idea and whether there are other, better ideas.” – Stanley Kubrick

Jamie Glass, President and CMO at Artful Thinkers @jglass8

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Investing in Co-Selling Partnerships to Grow

iStock_000022899520_ExtraSmallSmall businesses and entrepreneurs can greatly benefit by selecting co-selling partners to drive revenues. Utilizing another company’s sales and marketing resources may be a great channel to aggressively extend reach and acquire new customers.

Co-selling partnerships with businesses selling complimentary products and services to your target customer can be smart business. These partnerships can cut existing sales costs and even accelerate growth in market share. The best sales partners create a synergy between respective offerings. There should be a “natural fit” of how the products and services add value for the customer. The buyer should inherently understand why you would partner, not question as to why you did or if there is any benefit in buying from a single vendor.

Co-selling partnerships can reduce sales costs. There is a required investment in sales and marketing to grow a business. The costs of a sales team can be crippling for a new venture or small business.The overhead expenses that enable a sales person to be trained, productive, and armed with the right marketing tools, technology and product support can be onerous in the earlier stages of an organization.  Lack of initial investment often produces lack luster results and can actually cost the business even more with unexpected turnover or lengthy sales cycles. Businesses need a specific budget and defined cost of sales to properly staff, train and equip a sales organization to get results.

Time-to-market and time-to-close can be reduced through co-selling partnerships. A new sales hire ramp-up time can be 3-12 months, depending on price of goods to be sold and anticipated sales cycles. Ramp-up requires an “blind faith” investment of time and resources. A business has to invest in sales with nothing more than the anticipation and belief that something is going to be sold. It is a huge price to pay and has great risk. Utilizing a trained and experienced sales team through a co-selling partnership can help you bring revenues in while you invest in building your own sales team.

Co-selling is not free. There are costs of co-selling partnerships. A strong partnership requires investment in training and account management resources to keep top-of-mind awareness with your co-oped sales team. You also need to provide sales and marketing tools to properly equip the team to sell your goods and services. You need to be available when they have questions and to support them throughout the entire sales process.

You also need to create an incentive as to why a sales person in another organization should throw your offering into the mix. Higher commissions, faster time-to-close and value-add to the customer, are all good reasons; however, remember — sales people need to be sold too. If you extend the deal time or complicate the sales process, it will never work. Make it easy and valuable for the sales team through your co-selling partnership.

Incentives matter in co-selling. If the paired companies benefit but not the people selling, the partnership will fail. You need to set up a partner agreement for commissions and shared revenues.  A typical commission in a co-selling relationship starts at 10% of net revenue on the deal for a qualified lead pass. This type of agreement puts the burden back on you to close the deal. You are basically paying for marketing and an introduction. If the partner does all the work, including closing the deal, you may provide an incentive of 20% or more just to get that customer on your books. The structure of the agreement and commission rates should be based on your financial projections and cost of goods and associated expenses in managing the customer post-sale.

What doesn’t work? Relying on commission-only sales teams and partnerships that are by name only. There are business owners that believe they can get a motivated, committed sales person to work for free. The odds of making this type of relationship work are close to nil. The relationship between a company and it’s sales team, whether a direct hire or partner, is measured by the commitment from both sides. Small businesses may have to tier commission levels based on the ramp-up of sales or find ways to create early non-cash incentives; however, no one should be expected to go out and sell without a financial commitment. The words “you get what you pay for” should ring loudly if you are thinking about commission-only or finding people to sell for you because they like you.  Sales people that are really good at closing deals are expensive because they have a huge ROI.

Attributes of great co-selling partners to consider are the size of the partner’s sales team, market reach, relationships with your customer and available support the sales team receives in training for new products. The partner must have the means, connections and existing relationships to introduce your products to market. Co-selling means they will take an active role in selling. Again, partners by name only often produce little value.

If you choose to use co-selling partnerships, embrace the model and build support for the partnership. Show your loyalty through your commitment to make the partnership last and benefit everyone including the customer, the sales person and the partners. Create value by talking about the partnership and promoting the relationship. The results you get from this co-selling will be directly tied to the amount of time and resources invested in the partnership. You have to give to make it work and really pay off.

“In reality, the only way a relationship will last is if you see your relationship as a place that you go to give, and not a place that you go to take.” – Anthony Robbins

Jamie Glass, President and CMO at Artful Thinkers @jglass8

Related to a series of posts on partnering.  Also read: Sales Referral Partners Lead to New Customers

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Good Business Leaders Use Intuition to Make Decisions

IntuitionDecision making is constant in business. Advancing products, engaging employees, responding to customers are top priorities, all while keeping a careful eye on the bottom line. It is the basic function of a leader to be continuously selecting priorities and taking action. Multitasking and constant awareness come with the territory of being in charge. The only stop to the ongoing process is shut-eye. Not resting, deep sleep.

Every person, whether in a leadership role or not, confronts hundreds, thousands even tens of thousands instinctual decisions throughout a given day. Some are instantaneous, or as we classify “automatic”, while others require in-depth analysis.

We all have an internal analytic engine, taking everything we know, we collect and can reference based on experience to churn out a decision. We are the greatest sources of our own big data!

As technologists find ways to host, gather and exploit bytes by the billions and trillions of data from others, our own brain functions as the largest processor of data. Enabling us to act quickly or deliberately, at the speed of which best suits the need for a decision. Not everyone utilizes their “big data” engine in the best way, whether from a lack experience or knowledge, impairment or perhaps ignorance to what the data shows. The result, bad decisions.

In business, some can be plagued by the constant role as Decider-in-Chief. This often results in procrastination or delayed decisions. The common impact is action taken “too late”. The organization depends on a leader to make impromptu decisions, while also taking deliberate actions to lead to the “best” decision given a certain set of facts. Organizations need deciders to execute plans, activate programs and assign activities that drive results.

Good leaders often have a good sense of intuition. They use gut check analysis and set plans into action, without the noticeable analysis that others might use in trying to determine the path forward.  Where did they acquire such skill?  Repetitive decision making. Leaders know they have to make decisions, they are accustomed to their role and have the experience of accepting fault and risk with taking action. This training builds confidence and a strong basis for intuition. Making decisions over and over again in practice builds an intuitive leader.

Some researchers claim that intuition results in a physical experience, a shiver, an image or the often unexplained deja vu.  Others may use the intuitive nature of a dream to set a plan into action. The remembrance seems to create a comfort in the decision, having the sense of knowing the outcome. Beyond the intangible means from which confidence results, the facts are that when decisions are needed, strong leaders will act. Knowing inaction often results in increased pressure, stress and potential problems, making a decision, right or wrong, seems to give a sense of relief.  Decisions invoke power and progress.

There is no magic in intuition, it’s brain power. It is knowledge. Intuition is using information, filtering and making a judgment based on experience. The continuous practice of using intuition creates a platform to control quality of decisions and use of perception or quick insight, without compromising confidence.

Intuition is not “inherent”, it is learned.  The origin of the word dates back to the 1400′s as a reference to contemplation. There are many times that intuition will lead to proven conclusions; however, a leader will not always use it quickly and without process. There is often a misnomer that intuition means instant, without regard for facts or experience. It does not. It means using your better judgement and trusting your thoughts, your ideas and your role as a decision maker. It is using your intuition to move forward.

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.” – Steve Jobs

Jamie Glass, President and CMO at Artful Thinkers @jglass8

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What is the Real Value in Free

freeFree is zero, nada, zilch, nothing. In the mind of the consumer, free means whatever you give away for free has no cost to you. The same applies to your time. If you are giving away your time for free, how do others adjust to understanding your “real” value? Do they realize your true worth?

Most people are very leery of free offers. Based on experience, we are trained to look for the fine print, the exceptions and qualifications.  Our better judgement tells us that there is usually a “catch” to getting something for free.  A free day at the spa comes with the catch of attending a vacation rental sales pitch. A free juicer included with a top priced refrigerator comes with the catch of spending more on a product just to get a small appliance you may never use. A free soft drink when you buy the big meal comes with the catch you have to super-size your entire meal. If we are always suspect to the catch, how does that reflect on the perception of you giving away your time for free? Maybe there is a catch.

We are all very susceptible to the attraction of a free offer. Free works. We often all like to take advantage of free! Significant purchases are emotional. Free sparks our interest, it draws attraction to possibilities. Free also plays on the strong emotion of fear. The fear of losing out on the free.  Will someone else get our free?

What is not often measured is the “buyer” remorse of a free offer.  Why?  Well, you didn’t pay for your free, how can you be remorseful. You got what you paid for – zero, nada, nothing. You can’t return “nothing”. Your stuck with your free.  The cycle continues, giving and getting for free and then we are left wondering was it worth our time as the giver or receiver. It might be easier to leave the emotions behind and get to the real offer of people paying for your services. Paying for your valuable time without an emotional gimmick.

Free feels like it should have value. We perceive that whatever we get will be of greater value than what we have to give to get it.  It is very difficult in business as a service provider and solopreneur to not give away your time. We often justify this as a “marketing and sales” expense.  Unfortunately, the expense is not something you can list on your expense records as a tax deduction. You can not expense your hourly rate as a cost of sales. It’s lost time or to put in a more feel good term, an investment.

When you give away your time, what you do and who you are is represented as free.  It may appear to be a good idea. If you give your time away regularly others will soon see that your time has no value and what you perceive to be a great gift often goes unused or disregarded. Are you creating the perception that you are “free” for the taking?

The best advice for giving away time for free is to set a specific free time budget.  How many hours can your afford to give away each week?  Also, keep your “power of negotiation” at your central point of where you do business.  Meeting at coffee shops and for lunch may seem like a convenient way to give away your free services; however, you are no longer in a business setting, which demonstrates that your business is the priority.

We all desire to help others, pay it forward and do good. The best good you can do is to make sure that you get value for what you do. Free is a teaser, a sample. Maybe it is required to build a relationship and establish an opportunity for a transaction.  Then again, maybe if what you give away for free is so valuable people will actually pay you for it. Limiting your exposure and risk, means you have limited availability to always give away your time and services for free. Use your time wisely.

“If you were to offer a thirsty man all wisdom, you would not please him more than if you gave him a drink.” – Sophocles

Jamie Glass, President and CMO at Artful Thinkers @jglass8

Additional read:  Nothing in Business is Free 

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Patience is a Vice and Virtue in Business

iStock_000017171991XSmallPatience is virtuous when it empowers you to use good judgement. Patience is a vice when it is used as an excuse or method of procrastination.

Patience has a role in every aspect of business. Patience can be a virtue when leaders need time to evaluate and research the benefits and risks associated with critical business decisions. Patience can also be a vice when it hinders progress or is used by leaders to stall or delay difficult decisions.

In business, leaders gain respect when patience is used as a sensible guide. It can help define practical goals and set realistic expectations on performance. Patience is valuable in strategic planning, negotiations and critical thinking exercises that have significant impact on the future of a business. Patience also defines a business reality and sets a tone of perseverance.

Leaders can immediately lose respect if they show little or no patience. Rushing to judgement can sabotage activities or blur facts. Charging forward on key decisions regardless of the cost or potential dangers, can result in missed opportunities and less-than desirable outcomes.  Leaders that employ too much patience may be deemed as lacking confidence in their own decisions or lacking confidence in others.  It can spark insecurities and even instability in the business. No patience creates a perception of erratic and unstable leadership.

Patience needs balance. When patience is part of the decision-making process, be certain that there is substantiated purpose. For example, use patience in planning when you need to acquire experience, research facts, test an outcome or survey others for input. Patience used to delay a decision because of a lack of experience or knowledge can create a false roadblock. Set a timeline. Using patience to gather feedback is a good use of the virtue.  Patience becomes a vice when it drives you to continually seek consensus on all decisions.

Patience as a virtue gives you capacity to endure waiting. Patience as a vice is not setting a deadline, allowing difficult decisions or unexpected outcomes to linger and potentially harm the business. Patience, used correctly, is part of your business ethics. It helps in governance.

Patience gives you the fortitude to make decisions. The right amount of patience enables leaders to use levelheadedness and detach from emotions in the decision and use logic and facts. Patience is a vice when it is used so frequently that it creates an emotional detachment to any decisions or prevents you from personally engaging or taking responsibility for your decisions and commitments.

Patience in business needs to be modulated. It is a guide, a compass. It is never absolute. There are times you have to make immediate decisions. There are many times you need to trust your gut, your instincts, you inner voice and just go. True leaders have the courage to accept associated risk with making a immediate decisions, as well as knowing when it is important to deploy patience at the right time to get the best results.

“Patience is bitter, but its fruit is sweet.” ― Aristotle

Jamie Glass, President and CMO at Artful Thinkers @jglass8

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What is Your Business IQ?

Fresh ideas, concept wordsThe question is not related to your personal or business intelligence, it is your business Innovation Quotient (IQ).  Your business IQ is connected to how you manage change and performance improvements in all facets of your organization, from operations to product. The origin of the word innovate goes as far back as the 16th century. It is simply introducing something new or different.

There are some companies that are perceived to “own” innovation and are frequently on lists of the most innovative companies. Expected and recognized mainstream mega brand companies like Apple, Google, Amazon, Nike, Target, Coca-Cola recently topped Fast Company’s 2013 Most Innovative list, along with newer innovators like Pinterest, Sodastream, Tesla, and Yelp. They all have visible innovations and a high “product” IQ.  We come to expect they are doing something new and different all the time.  What we do not see is how these businesses innovative internally. How they get on these lists takes more than smart, cool products. We don’t know how often they change employee policies, management teams, adopt new software programs or retire practices that no longer get results – unless you are Melissa Mayer of Yahoo!

What is your business IQ?  How often are you “innovating” the 4 P’s: product, people, processes and policies?  If you were to rate how innovative your company is today, on a scale of one to 100, with 100 being the most innovative, where do you rank?  If you are never changing, you probably have a low business IQ.  If you are always changing, your business IQ should be close to 100.  The most realistic place to be, without completely disrupting or killing your business, is to aim for above 50.

If you are an innovative trailblazer with a high IQ, congratulations and press on!  It is difficult to stay on the forefront and constantly introduce “new” into a business. Trailblazers make change and as a result, often make money. They innovate, pivot and innovate again. Maverick companies with high business IQ are in a continuous cycle of innovation and change.

If your business is lacking in the innovation department, it may be time to set new company standards.  If you asked everyone on your executive team to provide you a recommendation of an old idea or way of doing something that needs to be retired, without measure of cost or risk to the business, what do you think would be on the list?  Perhaps it is time to find out.  Innovation begins by identification.  Where there is opportunity in your business to innovative, there is opportunity to improve.

Old or young, businesses need to always be monitoring their business IQ.  Innovation takes place within companies as well as in products and services.  Being an innovative company requires a constant and systematic evaluation of how the company will stay competitive and continue to grow or maintain sustainable profits.  The lack of innovation is a one-way ticket to performance doldrums.

Not all innovation is good and there are certainly small and big failures to note.  One point is certain, if your business is low on IQ, it is probably not maximizing the potential of products, people, processes or policies.  Start by asking the questions first. What needs to go? What is holding your business back?  Identify where you can improve your business IQ and then go — innovate!

“If you want something new, you have to stop doing something old.” – Peter F. Drucker

Jamie Glass, President and CMO of Artful Thinkers

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Racing to Close the Sale

iStock_000003423890MediumThe sales process provides a road map to follow when you are driving toward winning new business. The course begins with identifying a prospect and traverses through a series of events to the finish line. The intended destination on the map is the “close”. The place where you complete the sale, where you can declare you have won the race!

All sales people desire the race to be short from start to finish. Sales people hope to navigate around a few laps versus taking a long and winding road trip with many starts and stops. Experienced sales people have the endurance for the longer trek; where as, new sales people often lack patience and the will to stay seated for the extensive ride.

Most “starts” in the race never make it to the finish line. They breakdown somewhere in the process. The early racers may believe they are driving a qualified opportunity, yet fail to make the needs analysis turn or drive off the road at negotiation. By laws of averages and experience, more than 90% of opportunities that start will fail to get all the way to close. No matter the product or service, for every 10 qualified starts only one winner will result.  In other words, nine out of 10 deals will never make it to the close.

Winning or losing creates great anxiety in sales. The race to closing is arduous. Gripping the wheel, staying on course, focusing ahead requires concentration, skill and patience. The better drivers know they need to use their road map and not veer off course. The effort to get to the finish line can be months and even years with large deals. The pressure to close can drive sales people to make some simple driving mistakes.They take shortcuts to get to the finish line, avoiding key road signs that tell you whether you are approaching the finish or have miles and miles to go. Worst, they give up and quit the race.

One of the best indications for assessing how close you are to the finish line is to ask for agreement at every turn. “Are we there yet?”  It is true, the repetitive process of asking “are we there” can get annoying for some; however, you need to identify your road markers.  You need to know how close you are to the end of the race. The only way to know is to ask if you and your prospect are in agreement. You don’t want to end up at the finish line and find out your paying passenger jumped out long ago.

Every turn you make in the sales process requires a pit stop. Stop. Check to make sure the prospect is still engaged, agreeing to the journey and willing to go the distance.  If you fail to engage at the check points, you will mostly run out of gas and never see the checkered flag. You successfully end the race when you cross the finish line with your new customer seated next to you and you both are headed to the winners circle.

“The winner ain’t the one with the fastest car, it’s the one who refuses to lose.” – Dale Earnhardt

Jamie Glass, President and CMO at Artful Thinkers @jglass8

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Wishing, Wanting and Hoping Does Not Work in Business

What works in business is “doing”. Executing the plan requires effort. It is the muscle, the labor and the heavy lifting that gets the job done.

If you are wishing a prospect calls you to buy something, the wait is long. If you are wanting people to respond to your awesome tweet, the anticipation is agonizing. If you are hoping a great venture capitalist recognizes your incredible invention, your desires can go unfulfilled.

The message is not harsh or meant to burst your bubble. It is a direct call to action. Your wish, want and hope strategy needs reconsideration. It is not time to give up. It is time to change your strategy. Winners get rewarded for hard work. They do what others won’t do and that is how they win.

The sales person that makes the most calls, nurtures the most relationships and asks for the close multiple times, makes the sale. The marketing person that gets their message out through multiple channels using frequency and smart engagement tactics sees return on their marketing investment. Business leaders who knock on many doors to showcase their compelling business models that are producing multiple returns with predictable growth get the call backs from the investor community. Those that are putting their nose to the grindstone are realizing the rewards. The rewards of hard work.

Ambition needs to be equally measured by production. In a recent board meeting, the discussion soon centered on what we want to accomplish in the next five years. A boisterous board member remarked that the question was not relevant. The room became silent. Finally, someone asked him why would we not want to focus on our goals and define our strategy. He starkly replied, “You don’t have anyone to do the work.”

Every business needs leadership, directing activities and measuring accomplishments. Great leaders inspire others to believe they will be winners and thus hard work will pay off. The fact remains that without the “doers”, leaders are really a figure head. A strategy without anyone executing the tactics is a failed strategy. Labor is what drives businesses forward. Those that execute in the business are those that bring in the revenue, open new markets, and create innovative products.

The amount of time defining the mission, vision and strategy of your business needs to be matched exponentially by the hours of “doing”. Plans without the work tethered to tactics are simply great ideas. Goals are achieved through sweat. A vision is actualized through production.

Wishing, wanting and hoping are great for daydreaming. Put your dreams into action. The performance of you, your business and your teams are visible in hard evidence. Facts. Results. Failures. Accomplishments.

As you analyze the hours in your day spent on strategy and planning; multiple that amount of time by 10 and that is the minimum time you need to apply to working in your business. In other words, every hour of strategy and planning needs to be matched by 10 hours of laborious action. Match your planning time with a report card of hours worked on your to do list. The outcomes are a result of the effort. Measure your business success by the achievements, the outcomes, the results.

Wishing, wanting and hoping in business creates a crisis in confidence. Wishing is obscure. Wanting is desirous. Hoping is improbable. Doing is concrete. Working is absolute. A commitment in confidence is defined by action. Execution moves a business forward. Nike reminds us all the time to “Just Do It”. The simple motto is one that all businesses and leaders need to follow. Do it. Get it done. Then start again and just keep doing!

“The three great essentials to achieve anything worthwhile are, first, hard work; second, stick-to-itiveness; third, common sense.” – Thomas A. Edison

Jamie Glass, President and CMO at Artful Thinkers @jglass8

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Sales Referral Partners Lead to New Customers

Coins and plant, isolated on white backgroundUsing partnerships to grow your business is smart business. Partnering drives market awareness, aligns your brand with other credible brands, opens doors to new customers and can even provide value-added products and services to increase your average sale.

There are different types of partners, which are defined by the level of engagement and the agreements each party enters into to manage the relationship.

Sales Referral Partners are the entry level of business development partnerships. This type of partnership has little accountability and responsibility for performance. The value of this strategy is often used to grow market credibility or to align with a partner that has strong relationships with your prospective customers.

Entering into a partnership for referrals is a first step to test the waters in a relationship. It allows both entities to measure the commitment, willingness and effort required in working together to develop business. A sales referral partnership gives you the ability to determine if this is simply a PR initiative or will actually grow revenues. You can also monitor the organizational support in sales and marketing required to get deals closed.

The relationship can be a one-way lead pass or a two-way referral agreement. Both parties need to determine the best opportunity to refer business by passing on leads, receiving referrals or both.

Sales Referral Partners can be “handshake” in nature if you do not plan to hold anyone accountable for the outcome. It is commonplace for business service professionals who network together to develop non-binding relationships to help open doors and extend value by making credible introductions to other service providers or their respective clients.

If you plan to use compensation as an incentive to drive referrals you need a legal agreement, signed and executed between both entities. Compensation is a way to show appreciation for the referral and is an incentive to work together. If your partner offers to pay you for referrals, you also want to make sure it is in writing.

There are two ways you can determine the referral compensation.  Referrals can be compensated at the same rate as your sales commission.  For example, you can offer a set figure between 5-10% of the net proceeds of any closed deal.  You can also set the commission rate at the percentage of your average marketing spend to acquire a new customer. No matter the rate chosen, it should be perceived by your partner as rewarding and drive the expected behavior. Make it worthwhile for someone to act as your front-line sales person and help find you new customers. If the rate is not worthy of the effort, you can expect to pay few or no commissions, as you will likely not drive the behaviors needed to get a referral.

If you do choose to enter into a binding agreement that includes compensation for referrals, you need to set rules just as you do for your own employees. Specifically outline in your agreement how payments will be made and when the partner will be paid. For example, will you pay when the sale is made or when you are paid by the new customer? Be sure you state in your referral agreements if the referral fee will be paid over the lifetime of the relationship or for only the first sale.

It is critical that you track all your sales referrals, whether you enter into a formal agreement or simply take an email of a lead pass from a trusted business partner in your network. Enter the lead into your CRM with the proper tag to identify who gave you the lead. Enter when you receive the lead and monitor the progress of the lead as it moves through your sales pipeline. Measure all your partners quarterly to see how they are helping you grow revenues. It will provide you intelligence in how to manage the relationship for maximum profitability.

If you do enter into a sales partnership where the other entity is representing you on the front-line, you need to equip your partner with the same tools and resources you provide to your own sales team. You need to give them the ability to introduce you, what you do, the problems you solve and the value proposition of your products and services. Spend time providing regular updates about your business and services to keep your partners informed and engaged.

Top of mind awareness in this type of partnership is essential to getting value from your relationship. When you provide value, you will get value in return.  A partnership requires efforts by the giver and the receiver. Be persistent in developing good partnerships, measure activities and reward the efforts of those that help grow your business.

“Try not to become a person of success, but rather to become a person of value.”
– Albert Einstein

Other types of partnerships that will be discussed in future posts include Co-Selling Partners, Channel Partners, Strategic Partners and Investment Partners.

Jamie Glass, Founder, President and CMO of Artful Thinkers

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Think with Yes in Mind

iStock_000020490072_ExtraSmallOne of the biggest challenges business leaders and entrepreneurs face is to keep an open mind to new ideas and other people’s suggestions. Employees, advisers and sales people all seem to have a new and improved way for growing, building, doing or fixing something.

Emails flood your inbox while proposals stack high on your desk. The company suggestion box stays filled with endless brainstorms.  You solve one problem and then there are dozens of better, faster, cheaper ways you could solve the next.  You can not ignore the influx.  Nor should you.

Great leaders thrive on contributions of others, no matter the format or context.  There is always the opportunity that one recommendation could save or make the company millions of dollars.  A customer satisfaction survey could help you enhance your product.  An employee recommendation could help you reduce cost on your next infrastructure project.  A shareholder could enlighten you about a rewarding strategic partner opportunity.

Staying in a “yes” state of mind requires great skill and discipline.  It requires you to be approachable, literally operating with an open door for easy access to anyone and everyone.  You have to be focused and an expert listener.  The presentation of a suggestion may be masked within a complaint or shared by someone that doesn’t regularly get an audience with the ultimate decision maker.  You have to be able to decipher the hidden meaning.  You have to be thinking yes this idea or information could make a difference.

When approached, if you are thinking yes you are open to possibilities.  If you are thinking no, you are closed to suggestions and in the mindset of  impossibilities.  It is a dangerous position for the person at the helm to be closed to new approaches and ways of doing business.  You will soon be on an island as others are discouraged from sharing information or guidance.  You eliminate contact with those that can help you the most.

How do we get into thinking no all the time?  It requires time to be in a “yes” mindset.  Time is a precious commodity for leaders. We also have been trained to say no before we say yes.  In fact, good salespeople are trained to overcome your no.  Showing resistance when you are approached by a sales person is only a challenge.  Sales people learn early in their careers that it is often seven no’s to get to the yes.  Saying no only makes them more persistent.  It is far easier to say yes!  Yes, send me some information.  Yes, tell me why you would recommend we adopt this idea.

Always thinking yes before no does not mean that you implement every suggestion.  In fact, with being so open and approachable, it will be easier to discern what should be put on the list of possibilities.

Never limit what you can accomplish by thinking no before you think yes.  Maybe, just maybe, it will change how you and your business accomplishes all your goals and objectives in the coming year.

“Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I may end by really becoming incapable of doing it. On the contrary, if I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.” ― Gandhi

Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

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How May I Help You?

If you provide service as part of your value, the first opportunity you have to learn about your customer’s needs is to ask one very simple question, “How May I Help You?”.  These five words will enable you to define the pain and opportunity. Carefully listening to the response opens the door for how you can provide the greatest value, how you might actually help!

Asking someone how you can help them may be viewed as a conversation opener. It does provide a moment to engage. Engagement is critical in moving a target to a potential buyer or consumer of your goods and services.  What better way to get the dialogue started by asking how you might fulfill a request or need.

Asking someone how you can help them is different than using professional etiquette to ask, “How are you today?”.  Though this is a nice sentiment, it doesn’t require you to stop and listen. In fact, most people use this as a long form hello or welcome.  Many will respond with a trite and unemotional “good”, when in fact it may not be how they are at all. It limits your engagement.

The better way to open up a dialogue with a potential customer is to ask how to help them.  It requires you to pay attention.  It means you have to participate in a conversation that will have to use your perception skills, your listening skills and your problem solving skills.  A much higher demand upon your brain than a rehearsed canned response of “good”.

A person skilled in the art of providing outstanding service will anticipate the potential requests that will ensue from the question of how you can help.  The proposition of providing outstanding service also demands that the response demonstrates how you plan to deliver the help or better qualify the type of help that will best serve the customer’s needs.

Expectations of your engagement will be defined when you ask how you can help someone.  It is up to you then to determine how you can deliver that help or point them in the right direction.  The first impression is set by your willingness to open the door, invite someone in and learn of their requirements.

Here are some easy ways to remember how to create the greatest value of HELP:

H = HOW the person defines their need when you ask how you can help them. It is your opportunity to determine HOW you can be the best in serving them when you ask the question.

E = EXPECTATIONS are set when a person is asked how you can help them.  Knowing exactly what is expected gives you the opportunity to WOW them with your determination to provide outstanding service.

L = LISTEN carefully when you ask someone how you can help them, as they will assume you will hear and understand their needs.  Your first response will be their first impression of how good you will be in helping them resolve their problem or attain their goal.

P = PREPARE to deliver when you ask how to help.  Every request may be unique; however, you have standard services that will fit the needs with or without some customization.  Know your responses and the value that you will provide in helping them.

Most important, when asking someone how you can help them, is to respond with honesty.  If you cannot help, tell the person you are not able to help.  It is a measure of your integrity.  If you can extend yourself by giving them a referral to others that can help or pointing them to another resource, you will be a better service provider.  Your value to help does not require you to actually provide the help, only yield to a pathway to gets the person to where they can get the help they need.  Then you are truly a great service provider.

Service to others is the rent you pay for your room here on earth.  ~Mohammed Ali

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

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Prepare to Hire a Sales Person

It is the time of year that businesses start to look at their anticipated revenues and question if they can increase the top line with additional sales resources.  A sales person is an investment in your business. Preparing for the role within your organization is as equally important as hiring the right person.

Before you hire anyone, have you created a sales plan?  The sales plan is where you define your revenue goals for the year, the budget for required headcount and support resources, and the tactics you will employ to achieve your goals.  At a minimum, you must define what you are willing to invest into the selling of your products and services for every expected new dollar of revenue.  Once you make this calculation, set your budget based on your investment requirements and expected returns with new sales.

Now that you have your sales plan outlined, here are some steps to help you get ready for hiring a new sales person:

  • Sales Role: Will your new hire be a direct, field sales person or an inside sales person?  A direct sales person will have a larger budget for travel and expenses, in addition to higher compensation.  The expense of a direct sales person can be offset by a putting in place a higher quota.  A direct sales person is expected to negotiate larger contracts and develop profitable long-term relationships over the phone and in person.  An inside sales person will conduct all of their selling over the phone. They will be qualifying opportunities, making online presentations, negotiating and asking for the business over the phone.  Inside sales people will have a smaller quota and also typically sell smaller priced products and services that do not require face-to-face presentation and negotiation.
  • Job Description:  Create a job description that clearly defines the requirements for the role, responsibilities and expectations of what the sales person must deliver.  Be specific. State the sales goals, types of customers they need to sell and how they will engage with prospects.  Will they be a “hunter” or a closer or both?  Will they need to have existing relationships?  How much experience in your industry?  Note how your sales person will be measured and how you view success.
  • Quota and Territory:  Generally inside sales quotas will start at $100,000 to $250,000 in new business revenue per year.  The defined quota will always depend on the sales price.  A direct sales person can be expected to have a quota of $500,000 to $1,000,000 a year in sales.  Again price of product will help set the quota, along with experience of the sales hire.  If you hire someone with no experience in achieving a million dollars in sales, they probably won’t hit a million dollar quota no matter how much they sell you on the prospects.
  • Comp Plan and Incentives:  Detail how the sales person will be compensated.  Typically there are three factors in sales compensation:  sales commissions on new business, incentives to exceed quotas and bonuses for quality or quantity.  Define your compensation and commission rules.  When will the sales person be paid?  You can set different commissions for different products, based on profitability.  The average sales commission is 4-8% of top line sales revenue.  One word of advice, the easier the plan is to follow, the more focused your sales person will be on achieving plan instead of trying to figure out when and how they get paid.
  • Sales Process:  The sales process defines the steps a sales person will engage to find, qualify, present, negotiate and close a deal.  If you know the process, you can better hold a sales person accountable to how they manage their sales funnel.  It will also provide you data on how many leads you need to support the number of deals you expect to close each year.  Data is your friend in sales.
  • Marketing and Sales Support:  Sales people will typically work independently; however, you can shorten the sales cycle by providing sales tools and marketing support to help educate the customer, drive the process forward and substantiate the value propositions of your products.  Prepare a training plan to educate the new hire on what they will sell.  A minimum requirement for any sales person is a CRM tool.  Your prospects and clients are a company asset.  Track and manage the data and make sure it is stored in a company repository.
  • Measurable Success:  Before you make the hire, know exactly how you will measure their success.  A sales person, no matter the level of experience, will have a ramp up before they start closing deals.  Your sales cycle can range from weeks to years.  The more complex the sale, the higher price of your products and the more consultative the sales process, the more likely it will take six months or more before you see traction with even the most experienced sales person.  Your only exception will be to hire a person that already has relationships with your targeted customers.  The ramp-up will decrease with selling experience; however, you will pay a lot more for this type of sales person in base and expected overall compensation.  Do the math.  Can you invest more early on to increase odds of higher returns with a shorter sales cycle?

An investment in sales is one of the most important decision an owner makes in the life cycle of a business.  Making a bad sales hire can crush your business.  Prepare and plan for success.  Set reasonable expectations and measure performance.  Sales is a numbers game.  Know the numbers, inside and out.  Know what you spend.  Know what you want in return. Know how the sales person will achieve the sales goals.  Prepare your plan so you know what success looks like and then execute your plan.

“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

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Return on Marketing Requires an Investment

One of the most important decisions a business owner or CEO will make is establishing a budget for marketing. Like talent, product and infrastructure, marketing must be viewed as a necessity in business.  Marketing expenditures are essential investments for growth.

An average SMB (small-to-medium size business) will typically set a marketing budget at 4% to 6% of sales revenues.  There are several factors that can impact this budget.  As an example, a well-funded startup may invest 20% of revenues for aggressive consumer acquisition programs and advertising.  Notice, the “well-funded” qualifier.  Likewise, there is always difficulty in setting a budget for a pre-revenue company. Entrepreneurs will often spend most of their investments in product and then struggle to bring in sales. Startup costs must include marketing.  For every dollar invested in product, people and infrastructure, an equal dollar should be set aside for investment in sales and marketing.

Here are three simplified phases for marketing investment planning:

1.  Brand Awareness:  Your marketing investment should start with focus in reach and awareness including brand identity, a website, company advertising and direct and social marketing.

2.  Engagement: The second phase invests in additional marketing programs that support your sales efforts including lead generation, publicity, web marketing (SEO and SEM), market validation, events, advertising, presentations and customer case studies.

3.  Nurture:  Finally, maximize your marketing investments with customer communications, CRM services, loyalty initiatives and nurturing programs to maintain the valuable potential and existing customer relationships.  Once you have them engaged, use your marketing spend wisely to develop and grow your relationship.

After your marketing budget is defined, you will want to establish how you will measure the success of your investment.  ROMI is the acronym for Return on Marketing Investment.  The calculation is total revenue divided by marketing spend.  ROMI = Revenue ($) / Marketing Spend ($).

Some marketing activities such as branding, advertising, PR and social media are harder to track impact and influence. As a rule of thumb, the simple ROMI equation gives you a thumbnail sketch of your return on your marketing investment.  ROMI is a good KPI (key performance indicator) for leaders to use in the business dashboard.

If you are a startup or pre-revenue, the marketing spend will be set as your budget for purposes of forecasting. Some may argue that there should be other factors added or subtracted, such as attributable revenues; however, most businesses have a difficult time tracking every dollar spent on activities such as advertising. Start with the broadest “buckets” and as you increase your marketing reporting and tracking sophistication, you can scrutinize spending with finer analysis.

Marketing is an investment.  Success in ROMI requires budgeting, reporting and analysis in order to fully actualize the benefits.

In lean times, business owners have a tendency to cut marketing spend. Lost time and lack of investment, even during challenging periods, impacts long-term growth. The result may not be felt right away. It is an illusion. Prolonged periods of reduced marketing spend can dramatically reduce sales opportunities. The fewer dollars you put into a marketing budget the greater the exponential impact on future revenues.

Similar to an investment savings account, the more you put into your “growth” marketing account, the higher potential return on your investment. The more dollars spent on high risk marketing activities, the greater risk to returns. Any sound investment advisor, marketing or financial, will counsel a business owner and CEO to invest based on the organization’s risk tolerance.  Marketing investments should be treated like any financial investment.  Know your risk tolerance, invest accordingly.  If the business has low tolerance for risk, eliminate marketing spend in expensive tactics that are difficult to measure. Always diversify your investment to mitigate risk.

In order to qualify for a return, it requires an investment.  Failing to set aside funds to market is failing to invest in business sustainability.  Expectations of sales without an adequate marketing budget is a business built on luck. Though we would all like to be lucky, if you plan to sell something, invest in marketing to create the sale.

“I have a problem with too much money. I can’t reinvest it fast enough, and because I reinvest it, more money comes in. Yes, the rich do get richer.” -Robert Kiyosaki

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

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Capitalize on the Dog Days of Summer

There is a constant drum beat in business circles that summers are difficult for getting anything done. There are a variety of excuses that justify this belief, including, “everyone is on vacation“, “people don’t work when kids are out of school“, “buyers are not engaged“, and of course “decision makers are unreachable“.

The hard reality is these excuses are self-fulling prophecies.  We are more wired, more connected, more engaged today.  Business is not done during the hottest months of the year because we assume we will get a no before we ask for the yes.

The facts prove people are working all summer.  Monthly average work week data shows that we work the same amount in the summer as we do all year round.  Decision makers average 49 hours per week.  We are more productive than ever.  So, why are you not capitalizing on the hottest months of the year?

The Dog Days of Summer are the best time of the year to build up prospects, qualify leads, refresh your marketing strategies and compete for mind share.  While everyone else falls into the excuse trap, you have an opportunity to make noise and get noticed.

Laying back until September to heat it up your marketing and selling efforts only pushes you into the most distracting time of the year.  Right after Labor Day, decision makers are budgeting for 2013 and events are abundant.  Daily sales calls peak and we are all flooded with competitors emails and advertisements trying to capture top of mind awareness.  Simply, your odds are much better to get noticed during the summer months.

Here are some suggestions on how to capitalize on the final dog days of summer:

1.  Reach out to current customers.  Estimates are that it is 7x less expensive to get business from a current customer than a new customer.  Update your current customers on your latest business activities and see if they are ready to buy more.

2.  Prospect for opportunities.  Run reports from your contact database to see who has not been reached in the past six months.  Put them on your priority contact list and create a campaign to heat up some buying interest.  Activity creates action.

3.  Build sales plans for key accounts.  Spend time to craft detailed sales plans for your top prospects.  Identify decision makers, buying cycles, budgets and key influencers at your top target companies.  Read up on their latest news and research their business to identify critical needs.  Use your sales plan to carefully craft the value proposition for doing business with you and then set the appointment to make the pitch.

4.  Promote, promote, promote.  As others hold back until after Labor Day, you have the opportunity to use public relations and social media campaigns to gain attention.  Take advantage of the slower news cycles and go for the headline.  Do whatever you can to get the attention of those seeking your products and services.

5.  Summer close out sales. There is a very strategic reason why Christmas in July sales dominate the dog days of summers.  Retail outlets and online storefronts are looking to clear out inventories.  The other reason is June, July and August sales are the time people will typically start shopping for school and holidays.  Consumers expect a deal.

6.  Refresh your sales and marketing strategies.  Review your strategic plans. What has worked, what is not working and what market opportunities exist for the business in the next 18 months. Tactics follow strategy.  If you are only doing the work and not evaluating the impact on your strategy, you could be heading in the wrong direction.

7.  Pivot now.  Review your key performance indicators and adjust if you are are going to miss your mark.  Making a change now can benefit you in the last quarter of the year.  Don’t wait, start executing your changes and new strategies to achieve your business goals this year.

It is time to heat it up!  You have fewer people competing for attention and business right now.  Take advantage of it.  People receive fewer emails, fewer calls, so use this as an opportunity to make a direct connection today and set the wheels in motion to capitalize this year.

Jamie Glass, Outsourced CMO and President of Artful Thinkers, a strategic sales and marketing consulting company and Sales & Marketing Services Managing Director at CKS Advisors. 

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Ready to Hand Over the Keys to Your Business?

Who is Ready to Drive Your Business Forward?

Business owners can easily be consumed by the short term activities of day-to-day operations.  Sole focus on immediate outcomes exposes any business to long-term financial risks.

Every business leader needs to mitigate risks associated to being the one in charge.  The value of a business is built upon the sustainability of the operating plan, with or without it’s leader.  As an owner or CEO, have you asked yourself the “what if” question?  Are you fully prepared to hand over the keys to your business today?

You may have imagined that some day you will be transitioning your leadership to a partner, an investor, the next in line or even family member.  You may see your fabulous retirement life through the eyes of selling your business in multiples above your investment. In order to realize your dream, you need to spend time and commit resources to adequately prepare for a favorable transition. When? Now.

Succession planning is critical to an effective transition.  Achieving optimal outcomes in transitioning a sustainable business requires years of preparation.  How confident are you in handing over control of your business to your successors today?  A successful transition plan gives the new leaders a complete operating manual.  They need to be adequately prepared to operate the business day one.  They need to be able to take your business forward to protect your investment and to benefit your employees, stakeholders, customers and partners.

Some owners avoid planning for the end of the business because of the time it takes away from working “in” the business right now.   The lack of preparedness puts your business value at risk. It is never too early to prepare for an exit.  Whether you are a small owner-operated business, mid-market company or family-owned enterprise, you need a definitive succession plan.  It should be part of your standard business.

Here are some tips on how to start your succession planning:

1.  Document company processes and procedures.  Everyone is not replaceable. Unfortunately, when a person leaves the business they take institutional knowledge.  Key personnel that do not document their knowledge or share it with their direct reports, cost your business long-term and expose you to great risk.  This includes the owners and founders.  You can mitigate that risk by making sure every employee documents their processes and procedures.  Start with key roles.  This is not a job description, it is a “how to” operating manual for every role in your company.

2.  Review your wealth preservation strategies with your advisors.  Meet regularly with your personal and professional financial team members to analyze your current situation and review your short and long term goals.  Be “in the know” at all times of where your business stands financially.  Use strategy and growth advisors to help you pivot the business, so that you can exceed your goals.  Update your business evaluations annually.

3.  Build a culture of knowledge sharing.  Create internal social exchanges and information sharing networks.  Use your company meetings to have one department or key player provide a highlight of their role and what it means to the business.  Reward employees for creatives ways they educate others.  Commit one hour a week per employee for education and cross-training.

4.  Host quarterly strategy updates with key personnel. Spend time with your “next generation” of leaders to share business plans, KPIs, lessons learned and company strategies.  They are the future leaders of your business and they may be executing your business plan.  Keep no secrets.  Share your wealth of knowledge.  Sharing keeps people engaged and actively participating in achieving business goals.

5.  Reward excellence in execution.  Find opportunities to reward performance for those that take initiative and demonstrate they are prepared to lead.  A business full of up and coming leaders, results in sustainability.

Exit planning helps you increase the value of your business today and in the future.  Investors and bankers should ask to see your succession plan.  As you plan your beginning, you need to plan for the end.  Make your investment of time and energy pay off more than you imagined.  Plan today to realize a profitable, rewarding and fulfilling end.

Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

 

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A Bad Sales Hire Can Crush a Small Business

The decision to bring a sales person into your business is the most important decision you make as a business owner. Financially, it can be very rewarding or it can be devastating to your bottom-line.  The reality is that your hiring decision can propel you to mega-success, crush your business or land you somewhere in the middle.

There is no absolute science in making good hiring decisions.  Know your associated real and opportunity costs of making a bad hire.  Calculate the risks of the person not working out before you sign the offer letter.  Will your business survive making a bad hire?  How soon will you need to pivot if performance is substandard?

Based on the financial risk assessment, you can qualify whether you should invest in a professional resource or hiring profile tool to reduce the risk.  In other words, decide if you will pay now or potentially pay later.

What else can you do to protect your long-term financial security as a business owner and make an informed decision about hiring a sales person?

Ask candidates questions related to sales activities.  Don’t focus on their industry knowledge.  Industry knowledge is trainable.  You don’t need a nurturer or relationships person.  You need a sales person that will ask for money!  It is the secret skill that will bring revenue in the door.  There are two types of sales people:  hunters and closers.  In the beginning, you will need someone who is good at both.  They will cold call, with or without leads, and they will ask for the close.  These are “rare birds”.  Ask questions about the candidates history with sales cycles, average size of deal, average daily cold calls, number of customers sold each year, and presentation-to-close ratios.  These are all indicators of past performance and predictors of future success.  When a resume lists awards for exceeding quota, that does not tell you what they sold in the past is going to translate.  You want to know what they did to exceed quota.  What activities made them successful?

Invest in training and sales support materials.  Basic training materials should be product feature and benefit lists, industry keyword definitions, product overviews, competitive analysis, market positioning statements and scripts of common objections and how to overcome them. Utilize your team of in-house experts to train your sales people.  Set up daily Q&A sessions with product engineers, marketers, customer service personnel and anyone else that touches the customer.  Share all the secrets, good and bad.  The more knowledge and access to experts the sales person has the better prepared they will be to overcome objections.  The first two weeks of any new sales hire should include at least two hours a day training and practice calls.

Set sales quotes and activities quotas. An experienced sales person may only close 1-2 deals per year, with an average deal size of $2 million.  You need to clearly outline your expectations and what you will inspect regarding number of calls, meetings, presentations, proposals and closes.  Assigning the closing numbers without understanding how many calls that might take will cost you severely.  You must know, for example, 500 calls or 20 face-to-face meetings may result in five closed deals at an average sale of $10,000.  If this doesn’t meet your expectations, adjust accordingly.  Then measure the number of calls to see if you are on pace each week.  Early indicators will provide you the opportunity to pivot quickly.

Know your exit strategy.  What is the maximum time you can invest in a bad hire?  The answer can not be zero, because every hire has inherent risk.  If it is 90 days, then have a very specific plan with measurable key performance indicators (KPIs) that you can inspect every week.  You only have 13 weeks to determine if you will terminate employment or keep on staff.  Sales people are used to 90-day probationary periods.  You should have inspection points with planned exit strategies at 6 weeks, 90 days and 180 days.  Cut sooner and learn from your mistakes.  A year-long bad hire could close down your business if you are not well capitalized and depend on this new hire’s revenue to sustain your business.

Identify the characteristics that could be a threat or high risk to your business.  Character matters as much as sales skills.  You need to adequately assess the “fit” of this person in your business.  You are handing over the keys to your future.  Can you trust this person? Is this a person you would take with you to all your important meetings?  Does this person dream big?  Are they kind, friendly and positive?  Will your customers like this person?  If you can afford a hiring assessment by a professional, with tools that can define their character and skills, it will be worth the investment and potentially save you from making a big mistake.

Do your homework.  Never, ever skip reference checking.  Dig deep!  Ask community and business people that might know the person, look at their LinkedIn connections and recommendations.  Reference and background checks are as important as due diligence when buying a business.  You will be writing substantial checks to this person on a promise.  They will be creating your business first impression.  Reduce the risk by learning from other’s experience.  Again, it may be in your best interest to hire someone to do your reference checking to get a complete picture.

Finally, use your gut.  Do they represent you?  Your professional and personal instincts will serve you well.  A bad hire can scar you and make you timid in making a future decision.  Know that it can take four or five hires to find a rock star.  An early success in hiring a sales person is rare, so have a backup plan.

Sales people can make or break a business.  Know your upside and downside when hiring a sales person to promote your business.

Jamie Glass, CMO and President of Artful Thinkers.  Creative. Strategic. Results.

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Arizona Capital and Business Growth Resources

Along with Artful Thinkers, there are many great organizations in Arizona that support innovators, startups, entrepreneurs within the established business community from early stage to exit.

This is an easy-to-use reference of various groups, associations and service providers in Arizona that help businesses with financing, strategy, venture development, M&A, growth and mentoring services and business networking.

Accelerators and Growth Advisors

Investment Bankers (FINRA Registered)

Angel Investor Groups

Venture Capital Sources and Funds

Collaborative and Shared Work Space

Associations and Support

Pitch Contests & Competitions for Capital

Chambers of Commerce

Additional Resources:
This list was first published in 2012.  If you know of an organization that fits into the categories above, you can add the reference in a comment or email [email protected].

This list is maintained by Jamie Glass, CMO + President of Artful Thinkers.

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Talk is Not Cheap for Entrepreneurs

Planning, Strategizing, Ready to Change the World!

Countless CEO’s and leaders surround themselves with trusted advisers for counsel on a variety of business topics. Plunkett Research estimates $366 billion will have been spent in 2011 on global consulting, including HR, IT, strategy, operations management and business advisory services.

These billions are spent to generate new ideas, validate existing plans and provide strategic vision on solving problems and growing markets.  Most consultants dream of the engagement that is purely focused on strategy, 100% of the time creatively brainstorming on ways to be more, do more and get more.

Whiteboards filled with plans of grandeur, detailed reports, heart-thumping counseling sessions with these hired experts are alluring, especially to an entrepreneur hungry to take their business to the next level.  More revenue!  Less costs!  Decreases in human capital! Increases in productivity!

We have all seen the movie, hand-in-hand the strategist and business leader announce they have a better way. Bring in the team!  With the plan baked, the leader announces to his company, “I have a new idea and you will be responsible for the outcomes.”  The room is silent.

Why? A plan with little or no buy-in from the team sets off alarms.  The people who do the work know that every time they have to implement something new there are great costs.  Time. People. More time.  Did anyone ask for input from the doers?  Who is going to execute this new plan?  Who is going to be accountable?  It is probably not the consultant.

The first step to being a great strategic consultant is to build consensus within an organization.  Identify the problem, interview, validate, analyze and then present recommendations.  Buy-in is critical to achieve the best results. The most important person in every business is the person that actually does the work.  It is easier to get those that don’t do the work to agree with your plan.  What about the people who have to actually implement the program or new revolutionary way of doing business?  Consideration and respect for the doer’s role is essential.

When entrepreneurs take on counsel for one or more advisers, the amount of work that can be created for an organization and the doers can be overwhelming.  In fact, it can result in chaos, lost productivity, decreases in morale and lack of confidence in leadership.  You see, talk is not cheap.  Whiteboard ideas that go from chatter to “let’s do this” have a big cost to an organization.

Every time a consultant sells you on an idea, take the estimated “savings” and reduce by 75% and the estimated “costs” and double it.  It is not the intent of a strategic adviser to mislead his or her client, it is simply a factor of unknowns and assumptions made in the planning.

Leaders need to be able to evaluate every idea, every strategy and every problem solving plan that comes from outside consultants with great care and consideration to those that do the work.  Create consensus.  Ask the team to identify the risks and potential rewards.  Understand buy-in takes time and capital.

Business strategy consultants may be a very wise investment to spark innovation, challenge a new idea or share experiences to avoid pitfalls.  Define accountability in execution.  Too much time on strategy can actually be detrimental to any business. It is tactics that move the needle. Tactics are completed by doers. The “labor pool” gets the job done.

So, the next time a consultant sells you a “great idea”, remember talk is NOT cheap.  Be cautious, measure your tactics and define your outcomes.  Get buy in from your team before you “buy the plan” and know your costs, which are always far more than the just the consultant’s fee.