BUSINESS MONITOR Thinking ■ Continued over
BIG
The bigger the business, the bigger the sales opportunity. Marketing expert, PAUL CLAPHAM, has some pointers to help you trade with the ‘big boys’ in the bid to win new orders in 2013.
B
usiness growth comes from many angles. One route that any ambitious smaller business will have a beady eye on is to sell to larger clients.
If your typical current client employs 10- 20 people and your largest has 50 employees, you can make a judgement of likely average and largest order sizes. That structure may well satisfy you – there are lots more businesses of such size than there are those with 100 or more employees.
Nonetheless, those bigger businesses present a beguiling opportunity. To start with, that bigger headcount means bigger uniform purchases.
Those larger companies will have a marketing budget, some of which can land on printwear. They will go to a greater number of events and exhibitions. They are likelier to be opening new outlets. They may well have export markets.
It is not, of course, a simple matter of setting your sights higher and planning to put an extra zero on your quotes and invoices. The fundamental reality is that selling to larger organisations demands a different set of disciplines.
It will probably involve some up front
costs. It will certainly take you out of your comfort zone if you have only traded with much smaller businesses to date. All of this can be exciting and will tend to up your game overall, which should create greater success with your existing core clientele. But letʼs address the downside, first, because there are some important negatives that need to be overcome in such a plan. First and foremost is cashflow. If your normal invoice is less than £1000, a £10,000 debtor is inclined to scare you to death and put a major kink in existing cashflow forecasts.
Horror stories
You donʼt know the clientʼs payment practices, you donʼt have trading history to encourage prompt payment, you donʼt know whose arm to twist. We have all heard the horror stories of small businesses going under in such circumstances.
This is a planning issue. Some advice from your accountant and the involvement of your bank is indicated. If both say youʼre not ready, Iʼd listen! ʻNot yetʼ doesnʼt mean ʻneverʼ and, as below, you can start small with the big boys. Your bank should bring up the subject of
factoring, also known as invoice discounting. Enabling the smaller business to trade with the big boys is exactly what it is designed for. For a fee (usually a percentage), your bankʼs factoring division takes on responsibility of collecting from your debtors. Rapidly expanding businesses find it invaluable. Both bank and accountant should tell you best practice in protecting yourself against big 90 day debtors on 30 day invoices. However, Iʼm not entirely convinced they know it themselves. You have to ask new customers about this and if the numbers simply donʼt add up, you have to walk away. Set yourself realistic targets. A classic mistake made by those selling B2B is to give themselves the ʻas much as we can getʼ target. Itʼs a total nonsense and very wasteful of both time and money. When you are targeting big businesses this goes into overdrive. You need to be totally honest with yourself and recognise that, while one new, big client could boost the business enormously, recruiting two at the same time could be damaging, impossible to handle and, as above, a financial nightmare. One new, big client a year is probably the most that many smaller
www.printwearandpromotion.co.uk February 2013 | 23 |
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