Generating revenue at the start of any business is a huge challenge. Do the negotiations your sales team is capitalizing on offer every opportunity for the fastest startup growth possible?
In this article:
- Maximizing Cash Flow for Startup Businesses
- Focus on What’s Important… Even From the Start
- Low Cost vs. High Benefit Propositions
- Can Conflicting Strategies Co-Exist?
- Creating a Sense of Urgency
- Exploit Synergies within Your Customer Base
Safeguard Your Startup | Tips For Faster Startup Growth Rate
Maximizing Cash Flow for Startup Businesses
Revenue creation is among the most critical goals for companies in the startup phase, especially for small business units.
You may have the most competitive product offerings available within your market segment. Yet, without enough cash to fund operations and support overhead, your entrepreneurial efforts may be short-lived.
This is especially true at the start when cash needs can be much higher than in steady state operation.
Revenue generated by sales is usually the most important vital cash flow life-blood to pursue.
The negotiation tactics used by your sales team during a company’s beginnings are extremely important. Is there a proper focus on sales strategies to maximize cash flow?
Focus on What’s Important… Even From the Start
Starting a business is a very complex and time-consuming pursuit.
Not being clear on the level of sales required to keep the cash coming in is a mistake. This usually results in too many businesses failing.
Instead of rapid growth, they face a dangerous decline in revenue creation.
Successful entrepreneurs are the ones who envision all the crucial elements of their business to create one comprehensive client acquisition plan. At the risk of stating the obvious, your sales pipeline simply cannot be overlooked.
As an entrepreneur, the idea that you will be proficient in every area needed to run a business is not necessarily realistic. Don’t make the mistake of focusing too much on your areas of perceived weakness.
You may be excellent at product development but not much of a salesman. It’s smarter to either delegate the responsibility of effective sales negotiations to someone else or enroll yourself or your team on a public training, such as this sales negotiation training in Denver.
Low Cost vs. High Benefit Propositions
When you’re first bringing your company to the market, you may be fighting a bit of an uphill battle. Your company’s product offerings (being physical or service-based), and reputation may be unknown within your target market.
So, what can you do to get your foot in the door and actually grow in your business?
A combination of normally conflicting strategies could just be your best plan of attack. This includes being low-cost and also positioning yourself as someone who provides a high level of value.
Negotiating under a low-cost platform may be enough to entice customers to run a trial on your product. That’s simply because you’ve reduced your customer’s exposure to risk.
When traditionally negotiating from the viewpoint of being a high benefit leader, the cost is relatively less important because of the robust feature sets your products possess.
Can Conflicting Strategies Co-Exist?
Can the two (seemingly conflicting) strategies peacefully coexist? With the right negotiation training and skills, the answer is “absolutely”.
Framing the negotiations from a high benefit standpoint first will give you or your sales team the opportunity to demonstrate what your product can do for your customer. In addition, there will be an effective display of how the product can solve your customer’s problems.
Once the benefits are set in the customer’s mind, the low-cost approach can be presented. The intent is to create a need for the product or service.
Then, this is followed by showing how those needs can be satisfied at a cost-effective rate. In these situations, you need to make sure the pricing is presented as a unique opportunity with a specific call to action.
Creating a Sense of Urgency
Your sales team needs to use additional techniques (learned from the negotiation workshops you provided) to create a sense of urgency. Creating a sense of urgency can include initial promotional pricing – with a finite time frame before expiration.
Yes, taking these types of actions will affect the amount of sales revenue relative to the amount of product or service delivered. An important measure to take into account is making sure your fixed cost structure will support these activities without actually losing money.
The intent is not to create an ongoing loss leader, but to convert customers quickly (therefore generating more sales revenue). The goal is to create revenue for a short term basis at the start of your business and then transition to higher margins in the medium term.
Exploit Synergies within Your Customer Base
Converting customers at the beginning is challenging, so why not use your customers themselves as sales resources?
Here’s a proven game plan to consider. Once you have proven yourself to a particular customer, ask your happy customer to recommend your products or services to others within your target market.
Positive “word of mouth” advertising (which, as we all know, is the best advertising you can get) typically will lead to increased customer acquisition. Your sales team can focus more on closing a deal than on getting a customer’s time for an initial sales meeting.
There have been countless stories of companies that had great potential when they initially launched but then stumbled out of the gate when the time came to get the business off the ground.
A lack of revenue at startups is usually the prime culprit.
Don’t let your startup be a statistic. Make efforts to ensure you – or if preferable a highly-trained sales negotiation team – are in place right from the start. This will ensure faster startup growth and cash flow. Couple the right team with the right sales negotiation and growth strategies, and you will have a recipe for success.
Do you have existing sales negotiation strategies in place for faster startup growth already? Don’t hesitate to share them in the comments section below!