In business, it’s not just what you sell that matters, but how and where you sell it. This is your route to market. Yours could be selling direct; via Amazon, online, or over the phone – whatever works for your customer. The right route to market is the one that makes it easy for new customers to find you, and therefore buy from you. Get it wrong and they’ll go to your competitors instead. Today, selling via one channel or sticking to what you’ve always known leaves you in danger of being left behind, missing opportunities and losing market share.
To sell anything effectively, it pays to understand the people who are likely to purchase it. If you’re trying to sell fish, for instance, the way you sell it to a Michelin-starred restaurant will be vastly different to the sales pitch to a zoo looking to feed their penguins. One is concerned with quality, the other is all about price (unless they have a particularly fussy Emperor in their enclosures). Building a business to sell is no different. To get maximum value, you need to know what a buyer wants and is willing to pay for it. The answer is multi-faceted: from positioning via industry benchmarks and perfecting your brand to attracting and retaining talent through your employer brand. In this series, we’ve previously discussed these areas and how marketing can help you build value, but one key element remains.
“How do I know your solution is what my business needs?” “I’ve already got a reliable supplier in your sector. Why should I switch to you?” “How are you going to solve my business problem?” Questions like these can make even practised business owners break a sweat. If you start hearing yourself waffling on about the ’synergistic benefits’ of your ‘integrated solution’ it’s not because you don’t know your stuff, it’s generally because you haven’t developed your value proposition.
In 1860, Robert O’Hara Burke and William John Wills set off from Melbourne, heading north to explore the Australian interior. It had taken them three years to raise funds for and awareness of the expedition, during a gold rush. Neither had the faintest sense of bushcraft; their “essential supplies” included a cedar-topped table and chairs, rockets, flags and a Chinese gong. They broke down on the first day, took until midnight to reach the suburbs of Melbourne, and - to cut a long story short - their expedition was a disaster from which neither of them returned.
How much is your business worth? Ask this question to ten business leaders, and nine of them will focus on the bottom line - turnover, profit, revenue. Important factors, no doubt, but value runs deeper than the financials. Business value is generally calculated as Net profit of business times Multiple of earnings for the sector. This series is concerned with those multiples; those variable elements of a business that can add considerable value when it comes to the time to sell. In this series so far we’ve covered benchmarking, and the importance of a good employer brand. In this piece, we’re focusing on new product development.