BUILD a “BUSINESS DEVELOPMENT Alliance”
We form an alliance between us, our client, advisors & others with the relationships, expertise, capacity & resources for a strategic relationship then coach them as a group & in one-on-one sessions to reduce the business risks needed to accelerate your multiple!
The value of your business comes down to what multiple of your profit is a buyer willing to pay.
PROFIT x MULTIPLE = BUSINESS VALUE
The Business Development Alliance will improve the multiple (the other number in the equation), because in the same amount of time - it’s easier & more affordable to reduce risk. This will generate a much bigger increase in both the value of your business and sales. Briefly, here’s how together we’ll reduce the following 3 areas of risk:
1st – We’ll Identify an Untapped Market with Big Upside
Buyers will pay a lot more for a large market potential especially if you have proven future demand.
A business will stay small if they keep chasing growth in the wrong places. Imagine a dart board with a bull’s eye and around it is a series of wider and wider circles. The bull’s eye is where the (customers) are located who really understand the problem you solve & the value you provide.
So why go outside the bull’s eye? Probably, because when you’re a self-funded start-up, you’re scrambling — just trying to bootstrap your way. You don’t have a lot of money to invest in formal marketing, so you rely on reacting to the market, which means you sell outside your bull’s eye. These prospects may experience the problem you’re trying to solve but want a little tweak. You don’t see the harm in making a change and start to adjust your offering to accommodate the customers outside your bull’s eye. Making these changes to accommodate customers outside your bull’s eye seems innocent enough at the time, but eventually, it undermines your growth.
If your business remains reliant on reactive growth, it will eventually stall out with a handful of employees and an owner who will run out of hours in the day. Our secret to avoiding this plateau, and accelerating growth is to be brutally disciplined in identifying & serving your REAL customers in your bull’s eye. If a business wants to grow, THEY MUST STOP CHASING CUSTOMERS THAT COME FROM OUTSIDE YOUR BULL’S EYE - it’s just too risky!
2nd – We Do More Than Differentiate, Instead We’ll Dominate
Buyers only buy what they can’t easily create, so you can expect to be paid a lot more if you can demonstrate how you’ll dominate your market.
Does this sound familiar? If your company was innovative enough to develop a truly unique product that is earning a profit, the following inevitably happens: competition springs up from nowhere to imitate your product & service, undersell your price, and steal your market share. As your next line of defense, you choose to position yourself as the quality leader within your field; or as a lower price leader; or as the service king. You soon find yourself in a battle with other companies - all claiming to have the best selection, prices, highest quality or best service. Each competitor tries in vain to shout with the loudest voice that their offering is superior.
You need to realize three things about competing in your marketplace. Competitors do just one thing: They Woo Customers. Customers want just one thing: The Best Deal. You should always do one thing: Articulate Why You Are the Best Deal.
Follow these three guidelines & you’ll beat your competition into a demoralized pulp:
GUIDELINE #1 – INNOVATE YOUR INSIDE REALITY
Situation: Competition Actually Has a Better Deal: We’re not talking about price here either. We mean there's a competitor who is offering more value to your prospects than you and the prospects recognize that fact and don't buy from you. This sounds simple but we would contest that if you're not offering the best deal possible, you shouldn't expect to win. Why do you think traditional sales training exists? It's designed for companies with sales mentalities that believe all competitors are equal and your only chance of landing any business is to out-sell, out-technique, out-cold call and out-persist all your competitors. This selling strategy can work but it’s hard for others to replicate and VERY RISKY for anyone thinking about investing in the business!
Recommendation: INNOVATE CONSTANTLY! Innovation means simply figuring out a way to offer more value than any of your competitors. Just ask yourself: If you were a customer, what would compel you to buy from you instead of your competitors? And remember we're looking for real, quantifiable, interesting, exciting, and compelling reasons to buy. Not things like we've been in business for a zillion years. Not things that are pretty neat. Not things that your customers have come to expect from you or your industry.
GUIDELINE #2 - BUILD YOUR COMPELLING SALES CASE
Situation: Marketplace Perceives Competition Has a Better Deal: Okay, so you've innovated and you're now the best deal. Anyone in your target market would be a fool to buy from your competitors. But they still do! Why? We say it's because, in general, you are a BAD communicator. Show us 99% of all marketing created and we'll show you a huge amount of fluff, platitudes & unbelievable claims. Words like cheapest, professional, service, quality, speedy, convenient, and best do absolutely nothing to communicate why you're the best deal.
Recommendation: BETTER ARTICULATE YOUR CASE! The most powerful tool you can use to stand head and shoulders above your competition is the Compelling Sales Argument. Your CSA is the most unique benefit that your customers can expect to receive when they buy your offering. NORMALLY THIS IS THE BIGGEST ISSUE AT MOST COMPANIES!
GUIDELINE #3 - EXPAND YOUR OUTSIDE PERCEPTION
Situation: Marketplace Doesn't Know You Are an Option: If you’ve kept your target market very narrow & easy to identify, then this is an unforgivable mistake. Basically, you haven't effectively nurtured prospects through the educational stage of the sales process; consequently, prospects don't believe you or don't think about you in the moment of truth. How much of your marketplace perceives that you are a viable option? Nothing is worse than being the best kept secret!
Recommendation: SPREAD THE WORD! But Don't Break Your Budget. One common mistake is to buy a ton of media impressions to get what they call "name recognition." If you're not a Fortune 1000 company with an unlimited budget, forget this strategy. Getting in front of your marketplace is only 10% of the battle. Again, you must provide a process that effectively steps the marketplace at their own pace through the interrupt, engage, educate, & offer process. They must learn, in a compelling way that they would be a fool to buy from anyone else but you, regardless of the price.
3rd - We Will Generate a Recurring Revenue Stream
Buyers will pay a premium if they know they’ll have secure on-going revenue after they buy your business.
MOST BUSINESS OWNERS DON'T EVEN REALIZE A SUBSCRIPTION MODEL IS a 3RD OPTION TO IMPROVE THE MULTIPLE!
We try to implement a subscription model because it:
1. Delivers Predictability - When you have subscribers, you can plan what your business needs are in the future. This data is the ultimate in reliability.
2. Eliminates Seasonality - Many businesses suffer through seasonal highs and lows. By contrast, a subscription-based business has a steady stream of subscribers that pay each month.
3. Improves Valuation - Recurring revenue accelerates the value of your business. Whereas most small companies’ trade on a multiple of profit, subscription-based businesses often trade on a similar multiple but of the total sales revenue.
4. Creates a Trojan Horse Effect - Once customers subscribe to a service, they become much more likely to buy other things from the same company. That’s one reason Amazon tries to get customers to buy subscriptions to Prime. Once a subscriber, you are much more likely to buy additional products.
5. Makes One Sale That Keeps-On Selling - Unlike the transaction model where you stimulate demand through advertising each time you want customers to buy, you sell one subscription and it keeps giving month after month.