Category: Entrepreneurship

Introducing the Working Life Project Podcast

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Since December, I’ve been putting a lot more time on my latest project, the Working Life Project podcast. As you might imagine, there’s a lot that goes into launching a new podcast and that, in part, explains the lack of content on my blog lately.

It’s also no surprise, then, that it took me a little while to put the finishing touches on the new website and work through some production issues. 

My goal with the Working Life Project is to capture the stories of America’s entrepreneurs and small business owners. It’s a conversational/interview podcast where I hope to find those things that make them tick and share, in their own words and sometimes with pictures.

On April 2, I launched the first full-length episode with Ahna Hendrix of Anahata Swimwear. I interviewed David Harris of David Harris Magic for episode two, and later this week I’ll launch release the third interview. New episodes will be released every other week throughout the first 10-episode season.

If you’re a regular reader of my blog, you may recall I interviewed several entrepreneurs for my graduate work in entrepreneurship. This was a catalyst for bringing my 2010 idea for this project into the 21st century with a podcast. So, a couple of those interviews will make it into this first season in some way.

I hope you’ll listen and share the podcast with friends. You can learn more and listen to the podcast online at workinglifeproject.com. You can also subscribe at iTunes, Google Play, Spotify, Stitcher, SoundCloud, or wherever you get your podcasts.

How to Develop a Sales Plan for Your Entrepreneurial Venture

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Sales planning is a combination of both strategies and tactics necessary to achieve sales revenue growth within the company. The purpose of sales planning is to determine the expected volume of future sales to support business operations. A sales plan should be based in part on historical performance, but also factor a stretch or performance goal that considers new products, new territories, and changes in the marketplace.

A sales plan is direct and straightforward and focuses on how to identify and develop new customer sales opportunities as well as how do grow revenue opportunities from existing customers. Typically, the following four steps are used to frame the sales planning process:

  1. Establish a realistic revenue goal (What do you desire to achieve?)
  2. Identify sales opportunities (To whom are you selling?)
  3. Determine outreach approach (How will you engage and what will you say?)
  4. Set clear and measurable metrics (What will you measure and how frequently?)
Establish a realistic revenue goal

Sales planning must begin with a revenue goal. The annual revenue goal is this segmented and assigned to broad customer segments, such as new acquisition vs. existing or returning). Among the factors considered when determining how to apportion the revenue goals are historical sales performance for new customers vs. existing customers as well as customer satisfaction and customer churn rate (Gallo, 2014). Factors such as new product launches, the lifetime of a product, product or service pricing, and other similar things will often influence which segment gets the most substantial proportion of the revenue goal.

Identify sales opportunities

Once the revenue goal is established and the segmented by new vs. existing customers, the next step would determine how to identify sales opportunities within those segments. For both segments, an analysis of the customer’s needs, values, and expectations (NVEs) are essential, as is a review of the competitive landscape. The outcome of the analysis will shape the products and services offered, as well as the price position of those offerings.

With existing customers, the goal is to create deeper customer loyalty and increase retention. To do this, start with how to strengthen the relationship by meeting or exceeding the customer’s NVEs. Often this involves creating new insights for customers that support long-term goals and objectives. Usually, this means brainstorming new ideas and identifying new solutions and projects before the customer realizes or understands the need (Selling Power Editors, 2014). Determine if there are cross-sell (offering similar products) or upsell (offering an add-on or next-level product or service) opportunities with existing products or services, or if something different needs to be provided to strengthen the relationship. Then, create a sales goal for each customer based on those identified opportunities. These customer sales goals should roll up into the existing customer sales revenue segment.

For new customers, first, determine what an ideal customer might look like using the parameters of the current best and most profitable customers. Sometimes it’s helpful to create “buyer profiles” or “personas” to help identify what that best customer will look like in the marketplace. Then, identify prospective customers that align best with the products and services offered. Next, consider what would cause those potential customers to switch and whether the products and services provided will create enough value. Finally, establish realistic sales goals for new customers considering the market conditions and competitive landscape. These sales goals should roll up into the new customer sales revenue segment.

Determine Outreach Approach

Also known as the strategies and tactics of the sales plan, the outreach approach defines when, how, and the message used to reach each of the target customers and prospective customers. Given social media and online engagement have changed prospecting, some argue an excellent way to connect with potential customers be present in their communities (Haden, 2017). Identify the company first, if the prospective customer is a company, and then identify prospective buyers within the company. According to Inc.com contributing editor Jeff Haden, questions to consider when determining outreach approach include:

  • Are they on social media?
  • What’s their network of choice?
  • Are they involved in social media groups (e.g., LinkedIn or Facebook)?
  • Do they ask questions on Quora or Reddit?
  • Do they listen to podcasts? Which ones?
  • What blogs are they reading?

Gaining a better understanding of the prospective customers and their media consumption habits will help to define the strategies and tactics used to engage those prospects.

For example, considering the lists above, a strategy might be to provide value to prospective customers by becoming a trusted resource. Then, the tactics might be to engage in non-selling activities (i.e., conversation and Q &A) in social media groups, and answer questions on Quora and Reddit. Other tactics might be to develop a sponsorship program for the target prospects that includes the blogs they are reading (if possible) or the podcasts to which they listen. And, of course, some prospective customers do not engage with online media or do so sparingly.

Another strategy might be to incent the sales staff or offer customer incentives to increase sales. If a strategy is to increase sales by 20% during a calendar quarter using incentives, for example, tactics might include referral programs, price discounts or promotions, sales team bonus, or increased commissions for the period (Frost, 2018).

While the outreach tactics will depend upon the nature of the offering and the engagement preferences of the customers and prospective customers, ideally the engagement should include multiple channels. Creating a continuity of contact campaign or program that defines the frequency of contact, the channel of engagement (online, email, phone call, personal visit, trade show, podcasts, blogs, etc.), and the message strategy can be very useful in moving a customer through the sales cycle to purchase. Technology, such as sales force automation systems or CRM tools can be beneficial for tracking and keeping up with engagement campaigns and programs.

Set clear and measurable metrics

The sales plan must establish metrics and milestones against which to measure performance progress. Moreover, that progress needs to be measured frequently to ensure the plan is on target, and if it is not on target, what needs to be done to ensure any shortfalls are made up before year-end. While many things can be measured, the most important thing to measure in a sales plan is total sales because it provides the top-line cash flow for the business.

For example, let’s consider, and sales goal is 1 million dollars. Based on the historical sales seasonality of the business, $200 thousand is expected during the first quarter, $400 thousand is expected second quarter, $300 thousand third quarter, and $100 thousand in the fourth quarter. Because of the seasonality of sales, the majority of the sales come during the first three quarters of the year. If sales are off during any of those quarter, it becomes harder to make up sales to meet the goal. Therefore, monthly milestones should be established to monitor performance and enact new programs as may be necessary if sales fall short.

Sales planning is as much an art as it is a science. While revenue targets can be established that are built on a solid foundation of research, customer and market needs, product and service offerings, and historical performance, there remain many variables that can affect the ability to achieve those targets. Market conditions, new competitors, pricing and delivery factors, and sales team staffing are just a few of the factors that are difficult to predict and may influence sales performance. Regular performance monitoring will allow for quick plan corrections and revisions and minimize variances from the plan.

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Supplemental Articles Resources

In addition to the references and links within, here are a few more supplemental resources that might be of use to you as you consider how to develop your sales plan:

The Value of Keeping the Right Customers by Amy Gallo

What is Sales Strategy  by Hubspot Staff

The Hubspot.com Staff provides a good overview of sales strategy and planning and offers case studies of sales strategies for Hubspot, Salesforce.com, and Shopify.

How to Create a Sales Plan in 7 Steps by Allison Potts

Allison Potts offers a step-by-step approach to developing a sales strategy and plan, covering everything from the benefits of developing a sales plan, to examples and ideas for execution. The article also provides guides and templates to use in developing your own plan.

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References

Frost, A. (2018, January 9). How to Create a Sales Plan: The Ultimate Guide. Retrieved October 25, 2018, from hubspot.com: https://blog.hubspot.com/sales/ultimate-guide-creating-sales-plan

Gallo, A. (2014, October 29). The Value of Keeping the Right Customers. Retrieved October 25, 2018, from hbr.org: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

Haden, J. (2017, July 12). How to Create a Profitable Sales Plan for Your Business: 10 Steps. Retrieved October 25, 2018, from inc.com: https://www.inc.com/jeff-haden/how-to-create-a-profitable-sales-plan-for-your-bus.html

Selling Power Editors. (2014, August 21). The True Purpose of Account Planning. Retrieved October 26, 2018, from sellingpower.com: https://blog.sellingpower.com/gg/2014/08/the-true-purpose-of-account-planning.html

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Photo by Daria Nepriakhina on Unsplash

Thoughts on Entrepreneurial Education

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In December, I will complete the required coursework and earn a master’s degree from Western Carolina University’s Master of Innovation Leadership and Entrepreneurship program. Over the course my graduate work I have been asked many times if a master’s degree is worth the money if I really needed a master’s degree to be an entrepreneur, what prompted me to continue my education, and why I chose a Master of Entrepreneurship degree over an MBA.

As I wind down the program, I wanted to share my perspectives on these questions and offer other thoughts on entrepreneurial education.

My motivation for pursuing a graduate degree.

When I started the program in January 2017, my primary purpose was to earn the credentials to teach courses as an adjunct in higher education. My goal was to teach the basics of licensing and intellectual property protection to those students, like my summer interns from Savannah College of Art and Design (SCAD), who were on a path to creative careers but seemed to have little knowledge and understanding of licensing options for generating revenue and the importance of aggressively protecting their creations.

It was apparent to me that those with aspirations for careers in the creative arts are missing education in the fundamentals of business necessary to support themselves in those careers. I saw this not only in my student interns but also in my interactions with working artists and creators some of whom have been out of school for many years. I wanted to teach students how to establish a better business foundation for extracting long-term value from their future creative careers.

Two years later, my desire remains fundamentally the same; however, my vision is different. The coursework for the master’s program led me to think more broadly. We live in a world where corporate loyalty to employees is virtually nonexistent, and many individuals are pursuing entrepreneurial endeavors—some out of desire, others out of necessity. Moreover, the Internet enables everyone who wants to start a business, a way to find an audience, sell a product or service, and facilitate the delivery of the creation—whether its artwork, a book of ideas, a piece of furniture, or a service.

Most of us, though, are educated and trained to work for others. Very few of us understand how to be self-employed, or have the basic understanding of how to build a business that employs others. This lack entrepreneurial education and training must change, or the long-term impact is potentially devastating to the economy and the culture.

At the end of my program, I still see the significance of helping students extract long-term value from their future creative careers, but I now understand the necessity and importance of embedding entrepreneurial thinking and approaches in our post-industrial culture. I want to be a part of preparing future generations to think differently, to help them develop skills to identify opportunities and to teach them the building blocks that create products and services on which viable businesses can be built and thrive.

Why Master of Entrepreneurship (ME) instead of an MBA?

I chose the Master of Entrepreneurship program because I liked the idea of exploring the foundational theories for business management within the context of innovation leadership and entrepreneurial action.  Plus, I already hold a Bachelor of Business Administration, and I have significant hands-on experience in running and managing businesses, which is a core component of an MBA program. I found little additional value for earning a master’s degree in the same discipline.

While I suspect the curriculum may differ from university to university, I believe, based on my research and experience, the MBA curriculum primarily prepares students to run and manage the businesses of others, whereas graduate curriculum in entrepreneurship teaches students to identify and develop opportunities that can grow into businesses. While there may be some similarities in the ME and MBA programs, the business focus is often different. The curriculum differences would also seem to suggest some variances in the level of risk tolerance between graduates of the two programs, with the MBA leaning more toward risk avoidance and the ME leaning more toward risk acceptance.

A high level of risk tolerance is essential for innovation and is the cornerstone of most entrepreneurial education. Let me be clear: I am not saying MBAs cannot innovate—many do—although the curriculum for MBA programs and my experience with many MBA-trained executives in my career would suggest the educational foundation stresses an over-reliance on existing data and information in decision-making. Innovation stems from chasing the unknown, which is hard to do when there’s no hard data to support the chosen direction. Entrepreneurs know this, and a graduate level education in entrepreneurship soundly reinforces the concept of decision-making under uncertainty. For me, such a curriculum provided greater support and balance for my tendencies toward research and data.

Contrary to what some might think, a Master of Entrepreneurship degree doesn’t just teach you to start your own business—you don’t need a graduate degree, or any degree, to be an entrepreneur, but some entrepreneurial education does help your long-term success rate. Many, including the degree program in which I participated, teach entrepreneurial concepts applicable to existing organizations as well as startups. By focusing on those skills necessary to identify and drive innovation, a Master of Entrepreneurship degree provides a foundation that students can deploy for the benefit of any organization—from their own startup, to small businesses, to large corporations, third-sector organizations, nonprofit organizations, and everything in between.

As with many decisions of this nature, there’s no right or wrong answer. The choice depends on personality, background, experience, personal goals, and aspirations. There are indeed many individuals with an MBA who are successful entrepreneurs. The MBA-path was not the path for me.

Is a master’s degree worth it?

For me, this Master of Entrepreneurship degree is worth the time and expense because it helps to put in motion my future goals. My payback period should be short, I have learned a few new things, met some great people and earned a necessary credential for the next step in my career path.

Lifelong learning is important to me and the Master of Entrepreneurship degree demonstrates my commitment to that concept. I didn’t pursue a graduate degree at this stage in my life with hopes of increasing my earning potential significantly. I chose the degree to update my foundational knowledge and to learn new techniques and approaches to business and entrepreneurship upon which I can form new insights and, hopefully, contribute knowledge to future generations.

Of course, everyone must weigh the pros and cons of a graduate degree themselves. In some fields I would imagine it’s worth the time and expense; in others, perhaps not as much. I do think many hiring managers consider a master’s degree to signify a certain level of knowledge and commitment that a bachelor’s degree once suggested.

My commitment.

There are too many entrepreneurs who, whether by choice or necessity, are flying by the seat of their pants, throwing things against the wall and hoping it will stick. I know, because I’ve been one of them and I have worked with many others. What I have learned through experience and formal entrepreneurial education is there is not a magic formula that will breed successful ventures, but there is a framework for innovation leadership that will improve the chances of entrepreneurial success. And it’s time to give back.

I value the power and impact of entrepreneurial activity on the broader economy, yet my greater interest is in entrepreneurship as a solution for unemployment and economic growth in distressed communities. More specifically, I have interest in those communities where changing demographics, cultural and societal shifts, corporate closures, and access to education create barriers to employment and economic growth, and how to spur innovation and entrepreneurial activity to break down these barriers.

To this end, I rebooted my strategy consulting practice earlier this year, and I have incorporated a coaching component for startup founders and entrepreneurs as my first step in giving back. I am also looking for opportunities within academia as well as select organizations where I believe I can leverage my education, experience, skills, and abilities for the next generation.

Finally, I am exploring doctoral programs so that I might continue researching, working, and teaching how innovation leadership and successful entrepreneurial activity can be a positive force in cultural change.

If I can be of any assistance to you in your pursuit of entrepreneurial activity, please don’t hesitate to reach out.

 

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