A recent book I've been reading is "This Business Has Legs", sub-titled "How I Used Infomercial Marketing to Create the $100,000,000 Thighmaster Craze: An Entrepreneurial Adventure Story".

OK, I'll admit, I have pretty eclectic reading habits :-)

The book is a fascinating insight into the world of infomercials, written by Peter Bieler, the entrepreneur behind the Thighmaster Craze - well worth a read.

Anyway, Peter set out to create a "virtual corporation", outsourcing all aspects of his business from day one, including sales. As Peter writes:

"The nice thing about a virtual corporation is that you don't have to change. You don't have to transform yourself from a frontline manager to a guy that sits at the top of a huge pyramid of employees. The other advantage to a virtual structure is that you can grow rapidly... not only can you grow rapidly, you can shrink - painlessly - if need be"

Given that the infomercial world is driven by instant sales hits with a limited shelf-life, this certainly makes sense.

But, more than this, outsourcing the parts of your business that you don't do well (or don't enjoy!) makes perfect sense.

When we work with business owners they all have a common thread; they're passionate about their product or service, they are typically the creator type... but they all hate sales & marketing.

I'm not talking about meeting with potential customers; all our clients love that part! It's all the peices that run up to and after this single event.

Generating leads, building a pipeline of business, chasing and closing deals - it all takes times and unless you've worked in sales or business dveelopment for any length of time, the knock-backs and rejections that come with the territory can be punishing.

In way, in current Silicon Valley parlance, we "eat our own dog food" here.

We're a classic virtual corporation in every sense. We scale for each client gig with an associate base, bringing a team of telesales, field sales and business development professionals to deliver results. Over time the structure of the team changes to reflect the business stage of each client.

Plus, in a way, we have outsourced our content production. It's almost a reverse-outsourcing, if that term exists :-)

We are the sales engine, but without our clients "content" (ie: their products and services) then we cannot grow our business.

Which makes us an ideal partner for clients seeking to outsource their sales.

Labels: entrepreneurs, new business development, sales outsourcing, small businesses

Over a year ago I posted about "Sales Outsourcing as a Bootstrapping Strategy".

I mentioned that "most of our start-up and small business clients are bootstrapping their businesses and our services are a low-cost and low-risk option for them."

This certainly hasn't changed too much. For international companies entering the UK market, many are investor backed, but they are still looking to contract us to test the market and develop a beach-head rather than launch full scale operations in the UK.

In fact, even if a company has raised a significant round of funding for international expansion, it is still a sound strategy to utilise third parties (outsourced sales/channel partners, etc) rather build your own local office and team.

In the book "Other People's Money", Michael Lechter talks about the sources of Other People's Money (OPM), which is generally equity investment, bank loans, as well as factoring, leasing, etc and also the concept of OPR (Other People's Resources).

Included in sources of OPR are co-venture, strategic alliances, partnering, licensing (including franchises) and outsourcing.

Michael's simple definition of outsourcing is "purchasing a functional service from another business" and he explains that it is effectively a way to leverage Other People's Resources in a similar way to Other People's Money.

In the same way that you pay a premium (or interest) for immediate access to money in the form of a loan, outsourcing provides you immediate access to resources without the time and expense of developing the capability or performing the task in-house.

Today, many people think of "outsourcing" as moving jobs to a lower cost region (which is off-shoring, really).

In reality, outsourcing could cost you more, even if some of that cost is deferred in terms of commission, with sales outsourcing, for example.

In the case of entering the UK, rather than paying the (large) up-front costs of recruitment, offices, etc and the time it takes get everything in place you could contract an interim sales manager to put feet on the street within days.

Instead of "buying it"... you "rent it"

Labels: market entry, sales outsourcing, small businesses, venture capital

I read an interesting article for small businesses in the Sunday Times yesterday, "Think hard before selling a stake".

The article looked at the pros and cons of selling equity in small business. Lots of good points in the article, including a quote from Doug Richard, former Dragon and Chairman of Library House:

Any entrepreneurs who can get by without the cash for as long as possible are doing themselves a favour because whatever they can accomplish increases the value of the business and reduces the risk of the business - and therefore it means that whatever equity they do sell, they can sell less for more.

To me this is a very good point. For example, the other day I was speaking with a potential client who was considering a further round of funding to support sales expansion. We were discussing our proposals to help them get traction in a specific new market.

By bringing in a senior sales manager on a flexible contract, we can add value through testing the new market and establishing a beach-head. The company could then resource appropriately once the stage of the market was validated.

Plus any initial traction we achieve will make for a more attractive (and valuable) funding round.

Labels: entrepreneurs, funding, small businesses, start-ups, venture capital

I was reading an interview in F1 Racing with Mike Gascoyne the other day. Mike the CTO of Spyker F1, one of the smaller F1 teams.

I was struck by some of Mike's comments on how smaller F1 teams try to outmaneuver rivals with larger budgets and better cars.

"Even when we were at the back [with Tyrell] we went into every race thinking we were a going to score a point. We were convinced that we could come up with a strategy, make the call or do it better than our rivals."

According to Gascoyne, it's the thrilling bite of competition against the odds that drives him.

I get that. Absolutely.

Having worked with smaller companies up against larger, global competition, I know that it's all about finding smart ways to do more with less.

I've worked with people from larger companies who, when they make the transition to a start-up or emerging company, they just don't cut it without a huge marketing budget behind them and a string of warm accounts to farm.

Gascoyne calls it trench warfare - "I'll blow the whistle and we'll all pile over the top. Of course, it's going to be shitty at first, but you can guarantee I'll still be leading from the front."

Let's see how they fare when the F1 season starts next Sunday.

Labels: new business development, small businesses, start-ups

I was reminded the other day just how important strong qualification is in the sales process.

A bumped into a contact that I had met some 9 months previously. When we last met they were launching their business and were considering our services. At the time, they had already engaged a "lead generation" company to help find opportunities for them and wondered how we could help. In the end, because the other company was delivering a steady stream of "leads", they decided to run with them. I wished them good luck.

However, this time around it was a different story. Sure, they got lots of leads which, of course, meant lots of meetings, and then more meetings, and then more meetings...

9 months later they hadn't landed a single deal and had basically run out of cash. Part of their problem was the ongoing (and escalating) cost of sale.

In my book, when it comes to building a strong sales pipeline that will deliver results, the key is in qualification. Understanding which deals to pursue, and which ones to keep on the back-burner (or drop) is essential.

As my old Sales Manager told me many years ago when he handed me a wad of leads from a trade-show "your job is to make these go away".

As if to underline this point, on The Apprentice last night, the teams were set a task to sell second-hand cars. When their Sales Manager gave them the some training what did they emphasize again, and again? "Qualification". Once the selling day started it became obvious why.

Poor qualification = time wasted with the wrong punters = lost selling opportunities.

Set a strong qualification criteria and only pursue those where you have a high probability of success. And the scary thing is, when you do this you'll find the ones that would have wasted your time, will start to get much more serious.

Labels: sales, small businesses

The Investor Fair is held in London every Spring and Autumn, the next one being held on Tuesday 9th May 2006.

This prestigious event has recently drawn nearly 200 active investors to meet with clients on the day. Investors are likely to be syndicate members, VCT's, small institutions and some wealthy High Net Worth individuals.

Last Autumn's Investor Fair was filmed by BBC TV for the Working Lunch business programme. One client at that fair received two offers of investment, and that was before the company was subsequently featured on BBC TV's Trouble at the Top. Fair clients have also appeared on BBC2's Dragon's Den.

The Investor Fair can be a stand-alone method of reaching potential investors or, even better, used as part of the full Business Angel service which gives you access to nearly 1500 angel syndicates, VCT's, small institutions and HNW individuals in the largest Angel network in Europe.

Spaces are limited to 30 clients, who can be from any sector and at any stage of development, on a first come-first-served basis.

If you're interested in attending, contact me and I will introduce you to our associates.

Labels: entrepreneurs, small businesses, start-ups