Starting a small business is a commendable milestone, but propelling it to annual sales profits is a challenge in and of itself.
Putting black owned businesses aside, statistics show that 50% of all businesses fail within the first four years.
Of that 50%, the data shows that 76% had to shut their businesses down because they were incompetent and lacked experience.
Those are the average startup numbers, one could only imagine what the failure figures are for black entrepreneurs who have additional plights to overcome.
So I ask, are incompetence and lack of experience the source reasons why black owned small businesses fail? I feel ignorance of any journey can doom the journeyer, but I don’t feel those are the core culprits.
I’ve heard the stories of many successful entrepreneurs who admitted to knowing nothing when they began their businesses, later on to prevail.
But the ONE THING that remained consistent in all those stories was SALES!
There’s not a single small business on Earth that can die from having too many sales coming in.
I know there are a scenarios where a business can grow too fast outpacing it’s ability to keep up, but for all intents and purposes, that is not the norm for small business. Let alone small black owned businesses.
Now let me clarify what I mean by sales. Obviously every business needs sales to survive, what I’m hitting at is that a majority of startup black owned businesses fail to create a structured sales process in which to actively generate new leads and nurture those leads into paying customers.
Even the greatest of products can’t move indefinitely without some type of sales system.
And on on the flip, some products ,of sub-par nature, can be made extremely profitable with a solid sales process.
Sales is THE backbone of business. And if I were to say anything of business incompetence, it would be that an individual who invests theirs and others hard earned money to start a business venture without a detailed plan for selling the product or service is blatantly setting themselves up for failure.
I would liken that to going into battle with no combat training. A sure way to commit suicide.
Why Marketing Is NOT Selling.
Oh the many business owners I’ve consulted with who say, “I’m using social media, my website, the local radio, (fill in the blank), to generate sales.”
Although these are wonderful “passive” medias that provide top of mind awareness, they CAN NOT be used in place of an effective sales process.
Producing content and waiting for customers to blow up your phone or beat down your doors isn’t the way to build a thriving small business.
You have to go get it! That’s how the game is played.
Don’t sit back and wait for people to “Buy Black”. Get out and “Sell To Black”!
I’m not a proponent of any philosophy that suggests that just because you’ve opened a black owned business, Black Americans will come running to buy up all of your products.
It sounds great in theory, but I wouldn’t bet MY business on it happening. And neither should you.
I have worked in many very profitable white owned businesses and not one of them were waiting for people to “Buy White”. They ALL had a well trained sales team fighting for each deal.
Don’t get me wrong, I’m 💯 for “Buying Black”, but I’m afraid it can sometimes become a crutch for Black Owned Businesses.
If your business was created to serve the black community and that is your target audience, then just like any business, you need to formulate a sales system that will engage you towards “actively” prospecting, presenting and closing the sale. All else is wishing and hoping.
At the end of the day, people of all races buy products that they believe in.
Yes there are some Black People who will buy just because they want to support your black owned business and what you’re trying to accomplish. They believe in YOU!
That’s all good until you come to the realization that there’s just not enough of them to support the overall long-term growth of your business. What next…?
If you don’t have sales experience your small business will sit dead in the water. If you do have sales experience… Well, you’ll know what to do.
Just in case you don’t, here are 5 steps you can take to jump-start your sales process.
1) Market Research –
Who is your ideal customer? What do they like, want and need? Where are they located? When and how do they prefer to purchase your product? How much do they earn annually?
Those are just a handful of questions you should be aware of in regards to the demographics you serve.
Knowing your competitors’ strengths and weaknesses should also be incorporated into to your market research as well.
The idea is to get a full picture of how you can position your business for success in the market. You can’t hit a target you can’t see.
2) Acquire or Develop A Prospect List –
After the completion of your market research you will assuredly be able to identify your ideal customer.
Now you just have to compile a list loaded with hundreds or thousands of leads that fit the “ideal customer” profile.
The best list is always one that you’ve generated on your own.
Using the data you learnt from the market research, you can design online lead generation systems that’ll work like a magnet attracting highly interested prospects.
During this list building phase you’re not trying to sell anything, in fact to collect as many leads (names and contact info) as possible you going to want to give away a freebie of some sort that your “ideal customer” would love.
An alternative method for acquiring a list is to buy one from a database management company.
I recommend doing your due diligence on any list management company you consider as there are ample companies who will gladly sell you trash lists.
Yet another source for building a prospect list is joint partnerships. Find a business, (not a direct competitor) that serves the same ideal customer as you do and ask if they’d be willing to add your message to an email newsletter, direct mailer, etc.
This works very well if you could offer your product as an affiliate program where you’d pay your joint partner a small commission for any sell made from their efforts.
If you’re not familiar with affiliate programs and how your business could use them to recruit an army of sales people working to promote your products, you should to take a moment to investigate it. It might be worth your while.
3) Make Direct Contact & Set The Appointment-
When receiving new leads make it a habit to contact the person directly as soon as you can.
Always try to get a phone # so that you can make a warm call or at the least text them a personal message.
If an email is all you have to work with then learn how to write the best dang personal emails you can that will let the recipient know your a real person and not some automated responder.
If they do reply back, go for the appointment and ask them what would best the time and phone number to reach them.
Why Do You Want To Get Them On The Phone? Let’s look at #4…
4) Close the sale-
The best way to close the sell is to present your product and its benefits.
The phone will allow you to build rock-solid rapport, discover the needs of your potential customer and provide a solution that will help solve those needs.
The more people you can take from lead to phone the more sales you’ll close.
And if you’re working with local customers and the sale justifies meeting in person do that. You want to do whatever is necessary to show the prospect you care, because you do. If that means a one on one then set that appointment and close the sale.
5) Ask for referrals-
The sales process is not complete after the sale. Post-sale servicing is one of the most important steps that 80% of small businesses fail to do.
There’s more money to be made in the post-sale than there is pre-sale.
As a matter of fact, many profitable businesses will take a loss on customer acquisition just because they know they’ll make it all back and more in after sale profits.
First, there are referrals. You should always ask your new customer, “Hey, who do you know that might be interested in (Product)?”
The worst thing they can say is no one, and the best thing is they give you 2 or 3 names that you can call as prospects.
So always ask for referrals!
Secondly, depending on your business and product, you need to figure out how this new customer could bring repeat sales.
Is your product consumable and will need to be refilled in the future? Do you have additional products that you can sell them in the future?
Once you’ve done all that hard work of attracting a customer, it would make no cents to let them go.
Always remember that it’s easier to keep a loyal customer than to get a new one.
But you’ll want to do BOTH of course.
Making SALES the core of your black owned business will give your organization the ammunition it’ll need to pull in consistent profits and avoid failure.
You might not know everything about running a business, but this you MUST know…
“Nothing happens until someone sells something.” Henry Ford