My experience in a service based business

[veritasvisions]

If you are starting in a service based business, here is my personal experience that i think could help you out. Of course, many may have varying opinions but i am up for a discussion.

1) You cannot scale a service based business if you are doing the service yourself. I think it is extremely inefficient and not necessary to do it yourself. If you do the service, you won't have as much time for hussling for business, marketing, and sales. Don't get me wrong, it's great to have the experience in that service, in fact, i think it is very important. Your main positionin in the company, however, should either be to generate sales, manage a sales team, or develop strategic partnerships not be involved in the detailed day to day work. You will not have a business for very long if that is the case.

2) My main source of business is the phones. At some point, you will have to call someone to gain their business. Not many clients are going to call you and just pay you $3000 just beecause they saw you in a youtube video. Will that happen sometimes? Maybe if you have a MASSIVE FOLLOWING, but it will still only happen sometimes. I think video marketing and internet marketing ease the sales process tremendously but I don't think such methods are the end all be all to building a company. Again, they help a lot but I wouldn't rely on them.

When it comes down to it, making cold AND warm calls is the most effective way to get busienss. Now, you can ignore what i am saying like most people that lose their businesses but the fact is that making calls works better then anything. I had a friend who owned a car dealership and he said he didn't like to annoy people with cold calls. Do you believe that? Guess what? He lost his business.

3) Keep your expenses low as possible. You don't need an office right away, you don't need a ton of employees right away.

4) It is always a good plaly to invest in your business. However, you always have to ask yoursef 'is this expense an investment or a waste?'. Do not be one of those business owners who is always afraid of spending money. If you are, maybe business is not the field for you. To grow, you have to spend, it's just reality.

5) Success requires humility. It doesn't require a humble personality. I know some of you will say that Donald Trump is not humble. I am wlling to bet, at one point, he had to get an honest assesement of where he was and that he needed help to grow. I bet you he read, listened to success audio tapes, and grilled successful people like a mad man.

6) Business is $*%&#*@ hard but you have to learn to bounce back from failures. There WILL be times you will want to quit. I had a mentor who once told me that if you havent thought about quitting, you simply haven't worked hard enough. There will be times where running your business will feel like going through a breakup. It will be that tough. There will be customers who take advantage of your newness in business and completely thrash you. There will be times when a 9-5 job looks extremely appealing. But guess what, I promise you, It's worth it. However, if you quit, you will never experience the best part of business.

7) The foundation of your business is leadership and integrity. You cannot keep a client for a long time without integrity. You cannot keep employees or sales rep for a long time without integrity. Always keep your word and always do the right thing. These things will go a long way to establishing a successful business.

8) Always be on top of things. This may be extremely obvious but it's not. MOST PEOPLE are not. ALWAYS BE ON TIME AND ALWAYS KEEP YOUR WORD.

9) HUSSLE YOUR ASS OFF. There are no shortcuts, I promise. Stop finding ways to make it easier for you. SOme say work smart and not hard. I say work smart and hard.

[tallen]

1) I agree that you cannot continuously scale a business if you are the one providing the service yourself, but I disagree that the means you will lose the business. Your business may reach a plateau, but that may be fine -- meeting all of your needs and expectations. Basically what you are saying is that old standard, "You cannot work on your business if you spend all your time working in your business." (which is true, one does need to set aside some time to work on their business and not just in it.) I will also note that your advice here is contradicted somewhat by your advice in your point 3 (limiting expenses by not hiring employees).

2) Yes, one will likely have to actually talk to many prospective customers, but I disagree that cold calling is a necessity in all businesses. In our businesses, we regularly get customers committing thousands of dollars based just on the information on our websites. Sure, some of them want to talk to us before closing the deal, but they contact us (we don't contact them first in a cold call).

[turboguy]

That was a nice post and made some really good points. One thing that could be added would be that when you are ready to hire people, most always those you hire will not be able to do what you can and if by chance you find someone who can he will leave and start his own business.

I do agree with Tallen about the cold calling. Sometimes it is necessary an/or in some businesses it may be necessary. In my business we don't do any cold calling. We don't even follow up when someone has contacted us except when they want us too. By that I mean we don't harass people who have expressed an interest in our products. Of course we make sure we have provided all the information that they have asked for. In my case getting sales is not a problem we are concerned with as much as taking care of the business we get.

[Harold Mansfield]

2) My main source of business is the phones. At some point, you will have to call someone to gain their business. Not many clients are going to call you and just pay you $3000 just beecause they saw you in a youtube video. Will that happen sometimes? Maybe if you have a MASSIVE FOLLOWING, but it will still only happen sometimes. I think video marketing and internet marketing ease the sales process tremendously but I don't think such methods are the end all be all to building a company. Again, they help a lot but I wouldn't rely on them.

It's amazing that you have drawn this conclusion and are presenting this as gospel while evidence to the contrary is all around us. Companies with an actual marketing plan that include multiple tools including commercials and videos do get customers, do increase sales, and it IS their marketing plan that builds the company. This has been true for centuries. From print to radio, to TV to the web.

Marketing online is not about having a "massive following" it's about targeting your demographic. The goal is not to throw a blanket over everyone and hope to capture a few that are interested in what you have. It's about targeting. The same thing companies have been doing since before soap companies started producing radio shows.

What you've done here is decided that just because certain things don't work for you, or you haven't figured out how to execute them effectively, that they therefore don't work for anyone. And there's too much evidence all around us that proves your sweeping declarations incorrect.




When it comes down to it, making cold AND warm calls is the most effective way to get busienss. Now, you can ignore what i am saying like most people that lose their businesses but the fact is that making calls works better then anything. I had a friend who owned a car dealership and he said he didn't like to annoy people with cold calls. Do you believe that? Guess what? He lost his business.


This is totally not true. No it isn't the most effective way to get business. It's actually the least effective because it's a numbers game of burning enough leads to eventually close a few sales. The reality is that people hate telemarketers, more often than not it ruins your credibility, and cold calling is risky if you don't scrub your leads against the DNC list. You can actually be fined thousands of dollars per call in the most extreme cases that completely ignore the law.

It's also a very slow and tedious way to make sales in an era where the goal for most companies is to reach people. Not one person at a time. If my business depended on cold calling and I had no other source of lead generation or marketing I'd be out of business. You CANNOT keep a business running that depends 100% of cold calling. Not today. It may work for a few months like a time share company, but it's not a long term solution.

Business is not one sized fits all. Sales is not one sized fits all. Marketing is not one sized fits all.
Cold calling is what you do when you lack any other marketing plan or money to do anything else. Very few car dealers cold call people and I certainly wouldn't buy from one who did. They advertise. Following up is a necessary part of sales, but that's not cold calling.

I'm not beating up on cold calling. But saying it's the only way (or most effective way) to get business (for every kind of business in the world) is giving people bad advice. Maybe it's the only way that works for you, but you aren't everyone.

You can't take the experience and situation of one business and then draw absolute conclusions and force them into every situation. An experienced and knowledgeable marketer knows how to cater a plan for each situation and execute it effectively.

[tallen]

Yeah Harold, the tendency to state things in absolute terms struck me too, but veritas did preface the post by saying that these were observations and opinions based on his own personal experience, and that others might not agree with them.

[veritasvisions]

Yes Tallen, that is what i said. Thanks

[Harold Mansfield]

Yeah Harold, the tendency to state things in absolute terms struck me too, but veritas did preface the post by saying that these were observations and opinions based on his own personal experience, and that others might not agree with them.

True. He did. I just find the long "Here ye, Here ye...Behold!" general postings to "help us all" really strange considering that this is a forum of business owners who have been around the block for years..some of us decades.

[Harold Mansfield]

Yes Tallen, that is what i said. Thanks

OK, so I'm up for the discussion. We've had many around here concerning cold calling. Why do you think marketing doesn't work and that every business has to cold call?
And how do you explain the decades of evidence to the contrary of successful businesses that DO NOT cold call trolling for individual customers in order to increase sales?

What did people do before phones? Everyone went door to door?

[veritasvisions]

OK, so I'm up for the discussion. We've had many around here concerning cold calling. Why do you think marketing doesn't work and that every business has to cold call?
And how do you explain the decades of evidence to the contrary of successful businesses that DO NOT cold call trolling for individual customers in order to increase sales?

What did people do before phones? Everyone went door to door? Yes door to door would be considered a cold call. I didn't say it is the only method, I said it is the most effective method but I also said that warm calls are also very important. The closest thing i think to a cold call online is PPC which works great. The reason I say this is because it is the only thing that is quantifiable and measurable besides ppc and print advertising. I know that i have to make about 270 calls to make one sale in my b2b business where the average sale is between 2000-10000. What other marketing method can i actually quantify besides the ones mentioned above? So while, I agree, it's great to wait for calls and wait for customers to come to you, You still have to go out and make calls or you are losing on a huge opportunity to grow your business and EVEN building an email list. I would say marketing is necessary but you shouldnt focus just on marketing. You should be hussling and getting business when the marketing efforts are not panning out. I also do partnerships where i get referrals from other businesses that have similar clients and, honestly, those are the best clients but i cant really tell when im going to get a lead from them and I get a lot of leads from my partnerships. What i am simply stating is that if you want to have a LARGE business, you HAVE to incorporate cold calls, it's just reality. I have not talked to one sales company over 1 million in sales for the year who does not do cold calling. I challenge anyone in this forum who is over a million in sales that does not do cold calling. I know this because i work with the businesses. I am surprised you are even arguing this point Harold. Literally, every successful business owner i have talked to says it's effective. Actaully, I have a real estate client that gets 70% of his business from repeat clients through email marketing and he's balling. But his assistants still make calls for him whether warm or cold. It is extremely effective for me. I also want to make clear that it is not my only method of getting sales, again, it just is the most effective. I know that if i need to make money this week, the surest way i have to doing so is picking up the phone. I know that if i wait for people that get my mailers and my partnerships, I won't hit my target. I'll also add that the best calls i make are to former happy clients and that calling those clients will likely result in some kind of sale too.

I also want to note that, yes, telemarketing annoys some people for 30 seconds of their day. But who cares. In what way does it destroy a reputation? Actually it's only assisted in my reputaion because i earn them as a client and they give me rave reviews.

[Harold Mansfield]

Yes door to door would be considered a cold call. I didn't say it is the only method, I said it is the most effective method but I also said that warm calls are also very important. The closest thing i think to a cold call online is PPC which works great.
PPC is not cold calling. It's advertising. However if you're lumping this in with cold calling I suggest that you're using the wrong terminology and that's why you're getting resistance on your cold calling stance.



I know that i have to make about 270 calls to make one sale in my b2b business where the average sale is between 2000-10000. What other marketing method can i actually quantify besides the ones mentioned above?

This is where I say cold calling is NOT the most effective method as you keep trying to say. I only need 1-3 phone calls to do the exact same sales numbers. And I'm not burning leads and wasting resources to do it. When I talk of targeting your market, this is what I'm talking about. With this method you're just playing the odds. How much time do you waste on this method of hope? I'm suggesting that time is better spent building continuous lead generation models and sales funnels and closing...not calling people who have shown no interest in your services one by one and trying to sell to them.

All you're doing is boiler room, crash and lead burning.

It's great that this works for you, at the moment, but this is not an efficient or viable sales and marketing method for MOST businesses and it doesn't last long. Every week I block calls from people like you, who I may have done business with in the future..but if this is their level of professionalism and desperation I write them off.

There is a way to do what you are promoting, it's called lead generation, but it doesn't sound like you're employing any of those methods...you're just calling strangers. I'm saying that is not a marketing plan. It's hope and desperation.

Capturing leads like you seem to be doing with your LeadPages capture is a totally viable way of sales. But again, that's not cold calling. They've shown interest and asked to be contacted.




So while, I agree, it's great to wait for calls and wait for customers to come to you, You still have to go out and make calls or you are losing on a huge opportunity to grow your business and EVEN building an email list.

2 different things. Yes, lists are great marketing, but again that is not cold calling. Marketing is not waiting for calls to come to you. You don't seem to have a grasp of what marketing is and how to build long term lead generation.


I would say marketing is necessary but you shouldnt focus just on marketing. You should be hussling and getting business when the marketing efforts are not panning out. I also do partnerships where i get referrals from other businesses that have similar clients and, honestly, those are the best clients but i cant really tell when im going to get a lead from them and I get a lot of leads from my partnerships.

If you have no marketing and your entire business is based on cold calling, you will eventually find yourself out of business. What you are suggesting is to ignore what has worked since the first hut sold wheels, and put all of your eggs in one cold calling basket. This is bad advice.


What i am simply stating is that if you want to have a LARGE business, you HAVE to incorporate cold calls, it's just reality.
No it isn't. You seem unwilling to accept that every business is not yours and that this is NOT a viable sales method for everyone.



I have not talked to one sales company over 1 million in sales for the year who does not do cold calling. I challenge anyone in this forum who is over a million in sales that does not do cold calling. I know this because i work with the businesses. I am surprised you are even arguing this point Harold. Literally, every successful business owner i have talked to says it's effective.
We all work with businesses. Look around man, you're talking to people who've been around longer than you, are older than you, have been in business longer than you, and are running businesses with more sales than you have.

I'll be honest, no one is interested in who you've talked to and what they've said. We all talk to people. We're all about what you've done around here. That's where you gain credibility. You keep bringing up a million in sales as some level of credibility. Let us know when you get there.


Actaully, I have a real estate client that gets 70% of his business from repeat clients through email marketing and he's balling. But his assistants still make calls for him whether warm or cold. It is extremely effective for me. I also want to make clear that it is not my only method of getting sales, again, it just is the most effective. I know that if i need to make money this week, the surest way i have to doing so is picking up the phone. I know that if i wait for people that get my mailers and my partnerships, I won't hit my target. I'll also add that the best calls i make are to former happy clients and that calling those clients will likely result in some kind of sale too.

Again, it's great that this works for you. And you've made it clear that you don't have a reliable sales funnel set up, or haven't found your marketing strategy that brings in consistent business. So to compensate you cold call. I get that, and good for you. You could probably give some good tips on the subject. But it's not good advice for everyone and every kind of business.


I also want to note that, yes, telemarketing annoys some people for 30 seconds of their day. But who cares. In what way does it destroy a reputation? Actually it's only assisted in my reputaion because i earn them as a client and they give me rave reviews.

That's great for you. But some businesses do care, and don't need to ignore the law to make sales.

Just curious, how do you make sure the people you cold call are not on the Federal Do Not Call list?

[Freelancier]

Just curious, how do you make sure the people you cold call are not on the Federal Do Not Call list?This no longer appears to matter. The number of phone-spammers is huge and the number of complaints has overwhelmed the FTC, so they rarely prosecute.

[Harold Mansfield]

This no longer appears to matter. The number of phone-spammers is huge and the number of complaints has overwhelmed the FTC, so they rarely prosecute.
Maybe, but do you want to do business with someone who completely ignores it and just does whatever they want? If you're on that list, aren't you angry when you still get unsolicited calls? Don't you immediately write them off, or do you listen to the sales pitch?

[billbenson]

I've been a successful salesman of high dollar products for over 30 years and have never made one cold call. In today’s world with the internet I get people to call me. I spend my time answering RFQ's not calling 250 people to get one lead.

[veritasvisions]

Again, it's great that this works for you. And you've made it clear that you don't have a reliable sales funnel set up, or haven't found your marketing strategy that brings in consistent business. So to compensate you cold call. I get that, and good for you. You could probably give some good tips on the subject. But it's not good advice for everyone and every kind of business Ok Harold, what method do you employ that gets you a sale in 3 calls? And what marketing method have you employed that gets you a certain set of results per action you take. I would love to learn from that. Again, i am not saying you shouldnt use marketing but marketing is a waiting game in my opinion and i definetley wouldnt use just cold calling but it is the most essential in my business. I do print advertising, networking, and partnerships, those are my other effective methods. I have had one sale online from a live broadcasting channel called periscope but that is my only sale online. I would say my closing percentage on a partnership lead is about 70% but, again, i cant go out and actually find partnership leads, i have to wait for them. I would love to hear what method you would use if you needed to make a sale tomorrow. Not a few days from now, not with a long term strategy. If you had to pay your payroll tomorrow and had 0 money in the bank, what method would you use?

[Freelancier]

If you had to pay your payroll tomorrow and had 0 money in the bank, what method would you use?It's called "bankruptcy". It's a dumb sales-y question designed to elicit an emotional response instead of logic, because even if you close the sale today, you often don't get paid for a few weeks.

[Harold Mansfield]

Ok Harold, what method do you employ that gets you a sale in 3 calls? And what marketing method have you employed that gets you a certain set of results per action you take. I would love to learn from that.

My batting average is actually a little higher than that. Generally if the phone rings, especially if it's for support services, it's a sale because they've found me by looking specifically for help, and generally they need it now. Many times they're telling me to send an invoice before I've gotten to my closing statements, because I started closing the sale long before they picked up the phone to call me.

It's not all one thing, it's a combination of things that I've developed over time from SEO, to content marketing, partnerships, some social media (but not much), online reviews, referrals, footer links on website's I've built for others, multiple websites...it's a lot of things. I don't get leads from one source online, but more than 80% of my business comes from something that I've done with my online marketing.

I does take time. It's a long game, not a sprint.

I've made mistakes, wasted money, employed bad tactics..the whole gambit. But you have to go through it to learn and the web is constantly changing.

Many things that don't work for me, do work for many of my clients. Just as everything that I do, won't work for others in other industries and markets.


Again, i am not saying you shouldnt use marketing but marketing is a waiting game in my opinion and i definetley wouldnt use just cold calling but it is the most essential in my business. I do print advertising, networking, and partnerships, those are my other effective methods. I have had one sale online from a live broadcasting channel called periscope but that is my only sale online. I would say my closing percentage on a partnership lead is about 70% but, again, i cant go out and actually find partnership leads, i have to wait for them. I would love to hear what method you would use if you needed to make a sale tomorrow. Not a few days from now, not with a long term strategy. If you had to pay your payroll tomorrow and had 0 money in the bank, what method would you use?

I'm past that stage of jerking from one sale to the next. It's exhausting, stressful, and it's a constant round robin trap, kind of like pay day loans. But that's usually how you start out especially when you are bootstrapping. But you have to keep laying the ground work that will eventually start paying off via SEO and other online marketing.

I also don't employ anyone. If I need to subcontract out, the costs is factored into the project.

Business is unpredictable sure, but when you build a consistent sales or lead funnel you bank up when the phone is ringing off the hook so that 3 weeks later when it's not you aren't stressing out and desperate. It's also very satisfying when it's slow and the phone just rings out of the blue with money on the other end because of something you did or wrote months ago.

The same things that work to bring customers to you, also work to attract partners. They search the same way. Just make sure that you have language in your marketing that speaks to them, and set your business up with the tools that help you do business with them.

You have to establish your business' personality and branding, be consistent, have a professional presentation, and make it easy for people to do business with you...and of course do awesome work. Doesn't matter what peers say, a happy client is THE BEST marketing and free advertising you can get. Blow their socks off, give great customer service, and they will sell for you without even knowing it. It doesn't take hundreds of people or thousands of followers.

In your (our) business, opportunity is created simply by the amount of people in the same business who suck, and run their business like it's a part time hobby.

It takes a while to get there, but you have to get there if you want to make it. It's a mindset of constant improvement over time, finding your niche and working that niche. Not tricks. You know the stats of how much of your resources it takes to be constantly looking for new customers, as opposed to building long term relationships with existing customers.

Most people give up on marketing because they have no patience and aren't willing to fail. They want everything to work immediately and don't take the time to learn and get better with their messaging. If they employ a marketing campaign that doesn't work, they blame the method instead where they may have gone wrong and what they can do to get better. You also need to know when to cut bait. Every thing doesn't work for every body.

You also need to develop additional services and other streams of income. Web design is entering into a time where the large companies are trying to price us out of business. None of us can complete with Go Daddy, Squarespace, and Web.com for the small business, "mom and pop" business that we used to have a monopoly on. So I stay away from associating myself with that market all together.

The long money is in products and continuing services that people need and cannot do themselves. The services that the drag and drop site builder companies don't offer, or don't do well. The industry has evolved, and anyone still in it has to as well or they won't make it.

[Brian Altenhofel]

This no longer appears to matter. The number of phone-spammers is huge and the number of complaints has overwhelmed the FTC, so they rarely prosecute.

I report everyone that cold calls me, including some high profile software development companies (mostly offshoring). Nothing happens.


Maybe, but do you want to do business with someone who completely ignores it and just does whatever they want? If you're on that list, aren't you angry when you still get unsolicited calls? Don't you immediately write them off, or do you listen to the sales pitch?

If I get cold called, I decide immediately that I won't buy.

How I treat the call depends on how much time I have available and what sort of mood I'm in. Longest I've lasted before politely saying "no" is 45 minutes with an SEO company who was trying to land a "partnership" (basically resell their services white label for a 15% discount and a minimum commitment of $7500/mo - I don't wake up for less than 40% margin, and I don't do minimum commitments unless I already have commitments for those services from my clients).

[Fulcrum]

I'll step into this discussion. I was going to respond this morning but ran out of time. These are my responses, based on my experience of 20 years, working for and running a service based business as an owner/operator.

1) For the most part, you are correct in your observation. However, the business can be scaled quite high if the owner is willing to put out the cash and invest in automation. We are going to disagree when I say that an owner needs to know exactly what's going on in his business. How the work gets done can be left to the policies and systems that are in place, but an owner needs to know the details of the work in progress.

I'm starting to get annoyed at how often I am hearing the "You will not have a business for very long if that is the case" line. When did being an owner/operator turn into a hobby? When did a sole proprietorship equal a non-professional?

2) Most of my marketing in cold calling. However, I don't just pull out a phone book and start dialing. I do a lot of online research and look for companies that appear to fit my definition of an ideal customer. I will only contact them after prequalifying them. Also, I work with friendly competitors where we have different customers and minimal service overlap. They refer work to me and I refer work to them. I'm also prequalify these competitors as well. Their work and delivery must also be up to the same standards I apply to myself.

As to your friend who lost his car dealership, my guess is it wasn't the lack of cold calling that caused the business to go under. You haven't said if he was selling new cars or used, but either way, I would think that he was pulling too much cash out, not marketing at all, giving poor service, or just looking for the one time sale that caused him to fail - not the lack of cold calling. I know a used car dealership that has around 1000 vehicles on the lot, quick inventory turnover, and they only advertise in used vehicle magazines (who'd a thunk that would be a great place to market).

3) You are contradicting yourself with this point and point #1. If you want to scale a service business, you need employees and probably about 5-8 of them in order for an owner to focus the bulk of his efforts on marketing, sales, and overall strategies.

You will also need an office. It doesn't need to be fancy (mine is a room in my apartment), but it needs to be effectively set up. File storage (I'm talking paper), computer for record/book keeping, phone, and a door that can be closed to keep the distractions to a minimum.

4) Can't say that I see anything wrong with this. It takes money to make money. Just make sure it is being spent in the right places.

5) I agree with you that business owners should be humble. However, I've known many that are just the opposite. They think they can walk out of a bathroom and leave it smelling like roses. Personally, I wanted to take them out to the back forty and go a few rounds with them.

6) Holy cow, I think we're in almost a full agreement here. I can't say that a 9-5 job working for someone else looks appealing anymore as I like the freedom that comes with being self employed. If I have a rough day I just grab a beer, throw on a little https://www.youtube.com/watch?v=KC0DNLDXJW8 and kick my feet up.

7) Add knowledge and ability and I think we'll be in agreement again.

8) Geez, what's going on. We agree again.

This ties back into points 1, 3, 7 and 8.

9) Did you steal that final line from me? Sounds like what I've been saying for the last few years.

[veritasvisions]

I'll step into this discussion. I was going to respond this morning but ran out of time. These are my responses, based on my experience of 20 years, working for and running a service based business as an owner/operator.

1) For the most part, you are correct in your observation. However, the business can be scaled quite high if the owner is willing to put out the cash and invest in automation. We are going to disagree when I say that an owner needs to know exactly what's going on in his business. How the work gets done can be left to the policies and systems that are in place, but an owner needs to know the details of the work in progress.

I'm starting to get annoyed at how often I am hearing the "You will not have a business for very long if that is the case" line. When did being an owner/operator turn into a hobby? When did a sole proprietorship equal a non-professional?

2) Most of my marketing in cold calling. However, I don't just pull out a phone book and start dialing. I do a lot of online research and look for companies that appear to fit my definition of an ideal customer. I will only contact them after prequalifying them. Also, I work with friendly competitors where we have different customers and minimal service overlap. They refer work to me and I refer work to them. I'm also prequalify these competitors as well. Their work and delivery must also be up to the same standards I apply to myself.

As to your friend who lost his car dealership, my guess is it wasn't the lack of cold calling that caused the business to go under. You haven't said if he was selling new cars or used, but either way, I would think that he was pulling too much cash out, not marketing at all, giving poor service, or just looking for the one time sale that caused him to fail - not the lack of cold calling. I know a used car dealership that has around 1000 vehicles on the lot, quick inventory turnover, and they only advertise in used vehicle magazines (who'd a thunk that would be a great place to market).

3) You are contradicting yourself with this point and point #1. If you want to scale a service business, you need employees and probably about 5-8 of them in order for an owner to focus the bulk of his efforts on marketing, sales, and overall strategies.

You will also need an office. It doesn't need to be fancy (mine is a room in my apartment), but it needs to be effectively set up. File storage (I'm talking paper), computer for record/book keeping, phone, and a door that can be closed to keep the distractions to a minimum.

4) Can't say that I see anything wrong with this. It takes money to make money. Just make sure it is being spent in the right places.

5) I agree with you that business owners should be humble. However, I've known many that are just the opposite. They think they can walk out of a bathroom and leave it smelling like roses. Personally, I wanted to take them out to the back forty and go a few rounds with them.

6) Holy cow, I think we're in almost a full agreement here. I can't say that a 9-5 job working for someone else looks appealing anymore as I like the freedom that comes with being self employed. If I have a rough day I just grab a beer, throw on a little https://www.youtube.com/watch?v=KC0DNLDXJW8 and kick my feet up.

7) Add knowledge and ability and I think we'll be in agreement again.

8) Geez, what's going on. We agree again.

This ties back into points 1, 3, 7 and 8.

9) Did you steal that final line from me? Sounds like what I've been saying for the last few years.


Lively discussion. I like it. Since Brad, you seem to have a lot of expeirence and know what you are talking about and engaged me the most respecfully, I will respond to you first. Then Harold. For the sake of full transparency, i'll break down my own numbers to show everyone real world facts. Cold Calling represents just about 50% of my business. I employ a ton of other methods.

1) I said it is important to know the technical aspects but not necessary. I currently have software clients where i know absolutely nothing about the process but i trust my programmers to do the job. It just helps to know. As for my sweeping gereralizations, that's how i talk because i feel strongly about what i am saying.

2) Finally, someone who has sense and is not just a keyboard warrior. Yes i qualify the crap out of the cold leads as well as the warm leads. Also, i do have partnerships with people that have similar clients. Those are the BEST leads by far.

As for my friend, one of his issues was not many people on the lot and lack of cash flow. Can you tell me where else you can turn if you dont have marketing dollars? It's a no brainer. You pick up the phone along with your sales reps and you start hitting it HARD especially when your overhead is astronomical. I am sorry, harolds method of creating a sales funnel that is developed over months or years just would not have helped in that situation. My friend could have saved his business if he just listened to me. But of course, whether with new sales reps, or failing business owners, i always get huge objections to cold calling. Never from the people at the top. NEVER and that's the honest truth . They work on being more efficient but never will they say not to make cold calls.

3) my point is, when people are starting out they want to expand too quickly. SO they spend money they can't afford like with an office or employees. You absolutely dont need an office, at least in the beginning. Your apartment is perfect if it works for you. I am talking about a commercial space apart from the place you live. My point is to get those things when you are ready to expand not just to look cool.

5) Yea there are some people that are not humble. im in no disgreement there. But if you look at their process towards success, i bet you, there was a lot of humility required.

Actually Brad, we are in agreement with almost everything except my gerneralizing comments. I have seen too many sales reps and businesses fail because they didnt listen to me. I am not being a braggart just saying the truth. The main thing i hear before they go out of business is , 'i don't want to annoy people or i don't like that method'. Of course some don't listen and stay in business but they rarely grow.

I would love for someone with an over million dollar company weigh in on this. I think he would hold the most weight becuase we are all trying to get there right?

Here are my numbers with regards to sales and marketing

Partnerships- 22% of my business and i plan on building upon this because it is extremely effective.
Cold calls- 50%
Mailers and post cards- 5%
Referrals- 22% of my business includes all the networking I do in chamber of commerce and BNI and referrals from past clients.
Internet sales- 1% I also plan on expanding this

I would literally not have half of my business if it wasnt for cold calls. So while it's great that people have issues with my cold calling, I rather do what i am doing and actually make money to pay my employees.

[veritasvisions]

Maybe, but do you want to do business with someone who completely ignores it and just does whatever they want? If you're on that list, aren't you angry when you still get unsolicited calls? Don't you immediately write them off, or do you listen to the sales pitch?

Yes some write me off, I don't focus on them. But some don't and do business with me. Again, do i care if i piss some people off? I don't. If people get mad at one 30 second conversation and it ruins their day, that's their problem. They should go do some yoga, pilates, and not have a public business. If people don't know, i am in a b2b business.

[veritasvisions]

My batting average is actually a little higher than that. Generally if the phone rings, especially if it's for support services, it's a sale because they've found me by looking specifically for help, and generally they need it now. Many times they're telling me to send an invoice before I've gotten to my closing statements, because I started closing the sale long before they picked up the phone to call me.

It's not all one thing, it's a combination of things that I've developed over time from SEO, to content marketing, partnerships, some social media (but not much), online reviews, referrals, footer links on website's I've built for others, multiple websites...it's a lot of things. I don't get leads from one source online, but more than 80% of my business comes from something that I've done with my online marketing.

I does take time. It's a long game, not a sprint.

I've made mistakes, wasted money, employed bad tactics..the whole gambit. But you have to go through it to learn and the web is constantly changing.

Many things that don't work for me, do work for many of my clients. Just as everything that I do, won't work for others in other industries and markets.



I'm past that stage of jerking from one sale to the next. It's exhausting, stressful, and it's a constant round robin trap, kind of like pay day loans. But that's usually how you start out especially when you are bootstrapping. But you have to keep laying the ground work that will eventually start paying off via SEO and other online marketing.

I also don't employ anyone. If I need to subcontract out, the costs is factored into the project.

Business is unpredictable sure, but when you build a consistent sales or lead funnel you bank up when the phone is ringing off the hook so that 3 weeks later when it's not you aren't stressing out and desperate. It's also very satisfying when it's slow and the phone just rings out of the blue with money on the other end because of something you did or wrote months ago.

The same things that work to bring customers to you, also work to attract partners. They search the same way. Just make sure that you have language in your marketing that speaks to them, and set your business up with the tools that help you do business with them.

You have to establish your business' personality and branding, be consistent, have a professional presentation, and make it easy for people to do business with you...and of course do awesome work. Doesn't matter what peers say, a happy client is THE BEST marketing and free advertising you can get. Blow their socks off, give great customer service, and they will sell for you without even knowing it. It doesn't take hundreds of people or thousands of followers.

In your (our) business, opportunity is created simply by the amount of people in the same business who suck, and run their business like it's a part time hobby.

It takes a while to get there, but you have to get there if you want to make it. It's a mindset of constant improvement over time, finding your niche and working that niche. Not tricks. You know the stats of how much of your resources it takes to be constantly looking for new customers, as opposed to building long term relationships with existing customers.

Most people give up on marketing because they have no patience and aren't willing to fail. They want everything to work immediately and don't take the time to learn and get better with their messaging. If they employ a marketing campaign that doesn't work, they blame the method instead where they may have gone wrong and what they can do to get better. You also need to know when to cut bait. Every thing doesn't work for every body.

You also need to develop additional services and other streams of income. Web design is entering into a time where the large companies are trying to price us out of business. None of us can complete with Go Daddy, Squarespace, and Web.com for the small business, "mom and pop" business that we used to have a monopoly on. So I stay away from associating myself with that market all together.

The long money is in products and continuing services that people need and cannot do themselves. The services that the drag and drop site builder companies don't offer, or don't do well. The industry has evolved, and anyone still in it has to as well or they won't make it.

Wow Harold, I am in complete 100% agreement with you on everthing you say here. I agree with marketing. I think you think i dismiss marketing, i don't. I think it is more effective then cold calls when it comes to closing. My definition of marketing is reaching the RIGHT prospect at the right time so that when that prospect calls you they are ready to go. No one disagrees with that point and i strongly encourgage everyone to employ marketing methods because they could have a huge return. However, if those marketing methods are not panning out AT THE MOMENT, don't just sit around and wait for the next call. Go out and find new business. I know harold that you dont mean just wait for a call but how else would you define a marketing method? It's essentially throwing out a net waiting for the right person to catch your bait. Then the sale begins. But what if the net doesn't catch anything? What it seems you are saying is that you would spend months crafting a new net that may or may not work again. What i am saying is create that new net, but in the process go out yourself and find the new fish.

[veritasvisions]

I've been a successful salesman of high dollar products for over 30 years and have never made one cold call. In today’s world with the internet I get people to call me. I spend my time answering RFQ's not calling 250 people to get one lead.

Billbenson, I would love to hear your method of getting tons of leads, building a highly profitable and large business, without makig cold calls. Please show us all so we can learn. Also, please support your methods with facts and figures so we can look at and measure the numbers when we use your method ourselves. No sarcasm in this post, i really would like to know and learn. Thanks.

[veritasvisions]

It's called "bankruptcy". It's a dumb sales-y question designed to elicit an emotional response instead of logic, because even if you close the sale today, you often don't get paid for a few weeks.

Lol freelancier seems your dumb sale-y remark was meant to insult me. Well, I guess I could show you the same candor. It's just a hypothetical situation to show my point. Please explain your business a little more, it seems like you are in the lodging and travel business. I have a client roamba Inc who does 7 figures a month and they have a huge call center. COLD CALL CENTER. I'm being totally honest, there location is in Irvine California. Call them and ask them if they have a call center. Then look at their reputation online. I find this really funny actually.

Also, freelancier, everyone has tough times in their business. Yes, i have been at a point where i have been at 0 in the bank and have to pay 5 employees in a few days. I'll be honest, it's the reality of business sometimes. I'm surprised you are even saying this. I have learned a great deal from the experiences and try to prevent it as much as possible, but, yes, it happens.

[veritasvisions]

Quote Originally Posted by veritasvisions View Post
What i am simply stating is that if you want to have a LARGE business, you HAVE to incorporate cold calls, it's just reality.

No it isn't. You seem unwilling to accept that every business is not yours and that this is NOT a viable sales method for everyone.

Yes i rescind my comment, it doesnt work for every type of business like lawyers or restaurants. It works fro most businesses though.


Again, it's great that this works for you. And you've made it clear that you don't have a reliable sales funnel set up, or haven't found your marketing strategy that brings in consistent business. So to compensate you cold call. I get that, and good for you. You could probably give some good tips on the subject. But it's not good advice for everyone and every kind of business. I never said I don't have a reliable sales funnel, maybe not online, and ill be honest about that. Look at my response to fulcrom. I employ some of the most effective methods and i break down my numbers for the year so far with all my methods.

[veritasvisions]

I'm past that stage of jerking from one sale to the next. It's exhausting, stressful, and it's a constant round robin trap, kind of like pay day loans. But that's usually how you start out especially when you are bootstrapping. But you have to keep laying the ground work that will eventually start paying off via SEO and other online marketing. I agree on this point but i don't think you should eliminate cold calls all together. You should have other people make cold calls for you so you can focus on partnerships and marketing. That is what i am doing currently. I have a telemarketing team. Would i give up cold calls? NO WAY. BUt i personally dont want to do them.

[Fulcrum]

Again, do i care if i piss some people off? I don't. If people get mad at one 30 second conversation and it ruins their day, that's their problem.

This is where we will run into a disagreement. I've got enough trouble with competitors going around undercutting and talking bad (can't prove libel/slander as it's all hearsay) that I can't afford to piss off a possible customer. This is why I prequalify them as the size of customer I target is enough to keep me reasonably busy. Ideally, I would like to have a referral from a shop/mill that I do business with to get me in the door. My industry is quite small and none of the players can afford to piss any potential customer off.

I'm curious about your use of the word partnership. Are you talking about an actual ownership position in these companies or more of a referral type of arrangement?


I would love for someone with an over million dollar company weigh in on this. I think he would hold the most weight becuase we are all trying to get there right?

I'd listen to the guy who's small and flexible as well as the guy with rigid systems. Both have merit in their methods and experience in different management styles. I see this weekly when I visit my customers (5 employee outfits to 100+ employee outfits). There are lessons that can be learned regardless of the size of the outfit your studying.

[billbenson]

veritasvisions, shouldn't your time be better spent cold calling rather than writing novels here?

[Fulcrum]

I agree on this point but i don't think you should eliminate cold calls all together. You should have other people make cold calls for you so you can focus on partnerships and marketing. That is what i am doing currently. I have a telemarketing team. Would i give up cold calls? NO WAY. BUt i personally dont want to do them.

You posted this while I was answering a different one.

My own personal opinion is that the best marketing plan is one that will have your customers prequalifying themselves, contacting you to place an order, actually placing the order, and willing to pay for said order.

There are really only 4 types of possible customers out there:
1) Those who don't want your product/service
2) Those who want your product/service just not from you
3) Those who want your product/service but can't afford to deal with you
4) Those who want your product/service, want to deal with you, and are willing to pay your price

I think we all want to deal with #4 and having them call us is better than us calling them. If business is slow than we should learn how to use the phone. If business is booming and your booking 4-20 weeks out than you would be shooting yourself in the foot trying to bring in more work (lesson learned from a company that routinely sold $12K/day - even during the 2007-2008 crash, undercut everyone by too much, rarely delivered on time, drove away new customers due to poor delivery). Cold calling by someone who doesn't understand both my business and the customer's business will only serve to hinder good growth. It boils down to a pure numbers called game, and over time you will run out of numbers to call.

[veritasvisions]

veritasvisions, shouldn't your time be better spent cold calling rather than writing novels here?

I didn't make cold calls today but i usuallay do every day and I did work my ass off today. Billbenson, why don't you answer my question rather then deflect the attention. What is the method you employ that makes you so successful? You said you have been doing this for 30 years correct?

[veritasvisions]

You posted this while I was answering a different one.

My own personal opinion is that the best marketing plan is one that will have your customers prequalifying themselves, contacting you to place an order, actually placing the order, and willing to pay for said order.

There are really only 4 types of possible customers out there:
1) Those who don't want your product/service
2) Those who want your product/service just not from you
3) Those who want your product/service but can't afford to deal with you
4) Those who want your product/service, want to deal with you, and are willing to pay your price

I think we all want to deal with #4 and having them call us is better than us calling them. If business is slow than we should learn how to use the phone. If business is booming and your booking 4-20 weeks out than you would be shooting yourself in the foot trying to bring in more work (lesson learned from a company that routinely sold $12K/day - even during the 2007-2008 crash, undercut everyone by too much, rarely delivered on time, drove away new customers due to poor delivery). Cold calling by someone who doesn't understand both my business and the customer's business will only serve to hinder good growth. It boils down to a pure numbers called game, and over time you will run out of numbers to call.

I completely agree with the points made here. However, i think it's totally fine to use telemarketers. I use it in my business and I do great with them.

[Harold Mansfield]

I know harold that you dont mean just wait for a call but how else would you define a marketing method? It's essentially throwing out a net waiting for the right person to catch your bait.
No, it's throwing the right bait right in the middle of the school of the specific fish that you're trying to catch. Of course you can't make one fish eat when you want it to, but if you're targeting correctly, every day one of them is going to be hungry and need you. It's your job to be there when they are and to keep them coming back. It's even better if they remember you.

Of course you also have to have a product or service that someone wants, and you have to be awesome at what you do.

I spent years selling, trying to convince people. It sucks, it's less money, it's terrible customers, and it's a waste of time and resources. Then I started targeting people who were looking for what I have to offer, and capitalized on the specific things that they asked for the most. Viola! Niche.


Then the sale begins. But what if the net doesn't catch anything?
The sale begins the minute you decide to go into business for yourself. It's in your name, URL, website, social media profiles, blog posts, cards, the work you do and reviews you get. The sale is always happening by your mere presence in business.

Your entire presentation and every communication is an element of the eventual sale. You are laying the foundation for the close in everything that you do because business can come from anywhere at any time for any reason.


What it seems you are saying is that you would spend months crafting a new net that may or may not work again. What i am saying is create that new net, but in the process go out yourself and find the new fish.
Not exactly. Your marketing is always ongoing. If you are communicating, or representing your business in any way online or off, you're influencing how others feel about you and your business. Even when you think no one is looking.

You can't think of marketing as some task that you do a few hours a week. If you're communicating in any way (Phone, email, articles, social media, cards, blog posts, and so on), it reflects on your perceived credibility and professionalism.

That doesn't mean that you need to be always selling and pitching your product everywhere you go. That's actually obnoxious and online is flat out spamming. It just means that you need to represent well in whatever you do.

So you're asking what about the beginning? If it takes time to build your credibility and messaging, how do you make money as you're learning to build that?

My answer is that you should think about that BEFORE you open your business. If you don't have a plan of how you will get your first customer and every customer after that...everything else in your business plan is fantasy.

Most people have a marketing or advertising budget and a plan. This is why you see so many people with marketing backgrounds involved in start ups. Besides the product, and logistics, knowing how to come up with a plan to get customers is the most important task of a new business, yet the one that very few new business owners ever thinks to learn anything about until after they've opened and realize that no one is going to flock to them waving money just because they opened. Nor does anyone outside of friends and family know they exist.

Personally, I trolled jobs boards, freelance sites, reached out to friends to help promote me to people they knew, called on old bosses and business associates, past co-workers who were with new companies, and everything else I could think of.

[Harold Mansfield]

I have a client roamba Inc who does 7 figures a month and they have a huge call center. COLD CALL CENTER. I'm being totally honest, there location is in Irvine California. Call them and ask them if they have a call center. Then look at their reputation online. I find this really funny actually.


Cold calling is typical in real estate, especially resorts and time share real estate. However, what looks like cold calling on the outside, is actually not. I used to work for a time share call center and when we did outgoing calls, they weren't exactly cold. The leads were generated from a variety of sources and in some cases even purchased.

I still have friends in this industry or who have moved on to other telemarketing outfits and we have many conversations of leads and where they come from. The methodology is interesting, but they aren't cold calls. In almost every case the people signed up to be contacted, entered a contest, joined a specific mailing list, have shown interest in time share or vacation resorts in the past, are members of vacation or players clubs ( casinos), and so on and so on.

Generating leads is big business and how companies do it is fully integrated into everything we do in life. In some cases your are sold as a lead without knowing it because you didn't read someone's Terms of Service, or in the case of my DMV office, register a new car and someone is calling you about some auto related product or service.

We are all a lead to someone.

[veritasvisions]

Cold calling is typical in real estate, especially resorts and time share real estate. However, what looks like cold calling on the outside, is actually not. I used to work for a time share call center and when we did outgoing calls, they weren't exactly cold. The leads were generated from a variety of sources and in some cases even purchased.

I still have friends in this industry or who have moved on to other telemarketing outfits and we have many conversations of leads and where they come from. The methodology is interesting, but they aren't cold calls. In almost every case the people signed up to be contacted, entered a contest, joined a specific mailing list, have shown interest in time share or vacation resorts in the past, are members of vacation or players clubs ( casinos), and so on and so on.

Generating leads is big business and how companies do it is fully integrated into everything we do in life. In some cases your are sold as a lead without knowing it because you didn't read someone's Terms of Service, or in the case of my DMV office, register a new car and someone is calling you about some auto related product or service.

We are all a lead to someone.

Yes i think they use travel sites for generating leads online. Still, in my opinion, that is a cold call but just a little bit better then calling on random people.

[Harold Mansfield]

Yes i think they use travel sites for generating leads online. Still, in my opinion, that is a cold call but just a little bit better then calling on random people.

Maybe we're just misunderstanding each others use of the term. When I hear "Cold calling" I immediately associate that with unwelcome solicitation. I don't think of lead generation as cold calling. As a matter of fact lead generation around the web and social media is rampant and as far as I'm concerned a perfectly viable and effective strategy.

I remember a few years back (probably 10) looking online to investigate a model of car and signed up to "get more information" about financing deals. My phone rang almost immediately after I left the website. The consumer in me was a little taken aback, but the wanna be marketer in me thought that was cool as hell.

Same with behavior/re-marketing ads that follow you around the web. In a way it's kind of creepy, but as one who makes his living online, I think it's pretty awesome tech.

I'm just not a fan of the random phone call, or just walking into an office without an appointment or having made some kind of previous connection.

[tallen]

Is this what we are talking about?


Cold calling is defined as the solicitation of business from potential customers who have had no prior contact with the salesperson conducting the call, therefore making the call cold.

https://en.wikipedia.org/wiki/Cold_calling

[Harold Mansfield]

That's the definition I assume when I hear the term.

[veritasvisions]

Maybe we're just misunderstanding each others use of the term. When I hear "Cold calling" I immediately associate that with unwelcome solicitation. I don't think of lead generation as cold calling. As a matter of fact lead generation around the web and social media is rampant and as far as I'm concerned a perfectly viable and effective strategy.

I remember a few years back (probably 10) looking online to investigate a model of car and signed up to "get more information" about financing deals. My phone rang almost immediately after I left the website. The consumer in me was a little taken aback, but the wanna be marketer in me thought that was cool as hell.

Same with behavior/re-marketing ads that follow you around the web. In a way it's kind of creepy, but as one who makes his living online, I think it's pretty awesome tech.

I'm just not a fan of the random phone call, or just walking into an office without an appointment or having made some kind of previous connection.

I prefer those kinds of leads, those that showed some type of interest before me contacting them. I prefer partnership leads the most because they are warm. But when those leads are not available to me, i start calling on targeted business lists. So like brad, I qualify my leads so im only calling on those that do above 1 million a year in business, are in a certain location, normally do retail, and have sites that could use some sprucing up.

[veritasvisions]

I report everyone that cold calls me, including some high profile software development companies (mostly offshoring). Nothing happens. Ok Brian, that's you but notice how you said high profile software companies. Why is a high profile software company as you put it making cold calls when it just doesnt work. High profile companies don't just waste their efforts on things that don't work. Maybe sometimes but not for very long if it is being run correctly.

[veritasvisions]

That was a nice post and made some really good points. One thing that could be added would be that when you are ready to hire people, most always those you hire will not be able to do what you can and if by chance you find someone who can he will leave and start his own business.

I do agree with Tallen about the cold calling. Sometimes it is necessary an/or in some businesses it may be necessary. In my business we don't do any cold calling. We don't even follow up when someone has contacted us except when they want us too. By that I mean we don't harass people who have expressed an interest in our products. Of course we make sure we have provided all the information that they have asked for. In my case getting sales is not a problem we are concerned with as much as taking care of the business we get.

I would highly suggest you follow up with them. I think that is a huge mistake.

[veritasvisions]

And I am not too concerned with annoying people. In my opinion, that is one of the main causes of the lack of success. Fear of annoying peopole. I have annoyed some people to be honest, but it has done nothing to tarnish my reputation.

[veritasvisions]

I'm curious about your use of the word partnership. Are you talking about an actual ownership position in these companies or more of a referral type of arrangement?

Hey Brad, what i mean by partnership is someone who has similar clients as mine and would pass along a recommendation. I only work with companies that do substantially better then me. For example, i work with print shops, computer retail places, and small marketing companies although harder to establish. My main partnership has a computer shop that is a multi million dollar business and he get's people asking about web design at least 10 times a week. I write about 5 proposals for him a month and close 60% of the time with those leads in about 2-3 follow ups. So i have a ton of room for growth towards that asepct of my business. however, a good partnership takes 3-5 months to establish. With cold calls, i close about 15% of my leads within 5-16 follow ups. About 15% more will close past the 16th follow up. Yep, real numbers. So if i do 20appoint of those 3 will close within about 3 weeks time and yes i follow up 5-16 times in 3 weeks. I can't wait for all the keyboard warriors to criticize me on this. i will close another 3 within a month and a half. Now, Can i do something better to streamline the process? of course and that is what i am working on. Im working on qulifying my leads better, getting refferals on every appointment, doing more events at chamber of commerce meetings. So yes, i want to let everyone know that i am doing my best to become more efficient but, again, calls are the only way i know to to yield a SPECIFIC RESULT comiitting to a specific action. I will also note that i have a telemarketing team. PPC and print marketing work but I still can't get a grasp of what my return will be.

[Brian Altenhofel]

Ok Brian, that's you but notice how you said high profile software companies. Why is a high profile software company as you put it making cold calls when it just doesnt work. High profile companies don't just waste their efforts on things that don't work. Maybe sometimes but not for very long if it is being run correctly.

I don't take kindly to people misrepresenting my posts. At no point did I say that cold calling doesn't work.

[Harold Mansfield]

I qualify my leads so im only calling on those that do above 1 million a year in business...
That's crazy. Why isn't everyone's money good? IMO you're limiting your pool by making such an arbitrary demand on who you'll do business with. Why is it your business what their sales are? So you won't do business with someone who does $250k in sales? Or $80k in sales? Isn't what matters is that they want your services, and pay on time? You don't have a sales based business.

The higher you make your demands on the kind of businesses you'll service, the more you're going to run into businesses who handle their web needs in house, or already have relationships with people who handle it. Very few businesses get to that level of sales by ignoring the web. Your target market should be people who need your services and have the money, not based on how much they do in sales.

Besides, how do you even qualify that? And why have you set this million dollar mark as the only thing you consider success. Plenty of businesses have well over a million in sales and fail. Or look like they do and are actually broke.

[Brian Altenhofel]

That's crazy. Why isn't everyone's money good? IMO you're limiting your pool by making such an arbitrary demand on who you'll do business with. Why is it your business what their sales are? So you won't do business with someone who does $250k in sales? Or $80k in sales? Isn't what matters is that they want your services, and pay on time? You don't have a sales based business.

The higher you make your demands on the kind of businesses you'll service, the more you're going to run into businesses who handle their web needs in house, or already have relationships with people who handle it. Very few businesses get to that level of sales by ignoring the web. Your target market should be people who need your services and have the money, not based on how much they do in sales.

Besides, how do you even qualify that? And why have you set this million dollar mark as the only thing you consider success. Plenty of businesses have well over a million in sales and fail. Or look like they do and are actually broke.

Sales levels can be a good metric for determining needs as well as the type of client.

I like working with small businesses, but I find it doesn't work out so well if I'm asking for more than 2% of their total sales for my services. Even in e-commerce (which is a main focus of mine), it doesn't make sense. Someone in the US in e-commerce or retail doing <$250K in sales is usually not a profitable business. I want to work with profitable and stable businesses who see the value in the services I offer. Most businesses doing <$500K in sales are still in that stage of "most widgets for bottom dollar" and place minimal value on quality.

[Freelancier]

That's crazy. Why isn't everyone's money good?
For the same reason I have a minimum first-project buy of $20K. Just because everyone's money spends the same doesn't mean that the cost to do business with them is the same. If someone is just starting out with no sales, they have different needs from someone who has already gotten to a certain point in their sales and now needs help to get to the next level. It's a different target audience and if having that filter helps him to use his messages more effectively, that's not crazy at all.

I also want companies with at least $500K-$1M in sales, because those are the people with money to spend on the kinds of activities where my business excels. When they have less than that, I've found that they're more worried about keeping the lights on than in using IT to improve their top/bottom lines. It's a question of focusing my limited attention on the best prospects. But that's MY business model. It's not going to be for everyone, and in fact I'm in a niche that doesn't have many companies properly servicing it, so that makes my sales timeline much shorter.

As for qualifying that, 5 minutes on a phone call with them tells me whether they have adequate sales or adequate financing. I get calls all the time from people who want to create "the next facebook" and have $25,000 to spend to get the business off the ground. Not my target audience at all. Mrs. Freelancier says I'm too nice with them.

[Harold Mansfield]

You guys are in different businesses. The market of established companies with $1 million in sales and don't have a web department or web person is small. To me the market is new, start up, or growing businesses who want to get to that level. Plenty of businesses aren't doing $1 million and will spend thousands for web services.

Of course it depends on what kind of web services you do. Web design at the level I've seen from the OP does not require such high requirements of company sales/success. When you're talking about $50k and up projects, then I understand it. But not for single digit thousands.

[veritasvisions]

That's crazy. Why isn't everyone's money good? IMO you're limiting your pool by making such an arbitrary demand on who you'll do business with. Why is it your business what their sales are? So you won't do business with someone who does $250k in sales? Or $80k in sales? Isn't what matters is that they want your services, and pay on time? You don't have a sales based business.

The higher you make your demands on the kind of businesses you'll service, the more you're going to run into businesses who handle their web needs in house, or already have relationships with people who handle it. Very few businesses get to that level of sales by ignoring the web. Your target market should be people who need your services and have the money, not based on how much they do in sales.

Besides, how do you even qualify that? And why have you set this million dollar mark as the only thing you consider success. Plenty of businesses have well over a million in sales and fail. Or look like they do and are actually broke. Web design is my gateway into other services so to speak and only those companies can afford my other services. My company also does software development, application development, and credit card processing. Most of the larger companies want inventory management software, pos software, crm software, and applications. I currently have a potential software project that i have been working on closing for 7 months now that will beat my entire year in sales. BUt i see your point. The way i find these companies is by using http://salesgenie.com. You can filter the leads using a lot of qulifications. It does cost $150 a month but totally worth it. And you can sign up for a trial to see if you like it. I guarantee you will.

[veritasvisions]

I don't take kindly to people misrepresenting my posts. At no point did I say that cold calling doesn't work. Ok i take it back. lol

[veritasvisions]

The higher you make your demands on the kind of businesses you'll service, the more you're going to run into businesses who handle their web needs in house, or already have relationships with people who handle it. Very few businesses get to that level of sales by ignoring the web. Your target market should be people who need your services and have the money, not based on how much they do in sales.
No, i think companies start having an in house person at around 20 million in sales not 1 million.

[Brian Altenhofel]

No, i think companies start having an in house person at around 20 million in sales not 1 million.

It really depends. I have a few clients above that level that still don't bring it in house.

[veritasvisions]

It really depends. I have a few clients above that level that still don't bring it in house. Yea, it all depends how much they value their marketing department.

[Fulcrum]

Yea, it all depends how much they value their marketing department.

Sometimes it is easier and more efficient to contract it out. That's where well run service companies can shine. There was a time in the not too distant past when most of my customers would have done my work in house.

[Brian Altenhofel]

Sometimes it is easier and more efficient to contract it out.

This.

Idle time for employees comes with a price, and it's impossible to hire an employee who is truly an expert in every niche of their job.

[Harold Mansfield]

No, i think companies start having an in house person at around 20 million in sales not 1 million.

The optimum phrase being "I think". The truth is you really can't know. A smaller operation can have an in house person just as easily as a larger one. For a lot of people I am the in house person. But I see your point if you are calling on businesses...you don't want to waste your time. Although having the money doesn't mean they are going to give it to you.

I just don't think you can quantify who's worth doing business with by how much in sales you think they're doing. Just like in the bar business you can't tell who is going to be a big tipper and steady customer by what you think they do for a living and how much money you think they make. Anyone can have the potential to be, or bring you the big hits, or to be a long time customer that bring in steady income.

I say this from experience. I have quite a few clients who have been with me since they were a start up and over the years have grown and now come to me for everything they do online (or tech related) from their first simple website to running long term social media and advertising campaigns and beyond. Especially if your services help them make more money.

They are also more consistent customers. To me $500 every now and then from someone who calls on me for everything, is just as important as one person who drops $10k for one thing. Those $500 every now and then people can end up being what pays the bills while you're trying to close bigger, one time deals, or will be an income stream when it's slow or locked up on a project for long periods of time and don't have the time to cold call for new money.

But the key here is that you do what works for you, not what works for me or anyone else. If it's working and you're paying the bills, that's what matters.

[Fulcrum]

I have quite a few clients who have been with me since they were a start up and over the years have grown and now come to me for everything they do online (or tech related) from their first simple website to running long term social media and advertising campaigns and beyond.

They are also more consistent customers. To me $500 every now and then from someone who calls on me for everything, is just as important as one person who drops $10k for one thing. Those $500 every now and then people can end up being what pays the bills while you're trying to close bigger, one time deals, or will be an income stream when it's slow.

I don't think I can put enough emphasis on this. Sometimes getting in early with a smaller company can result in some exceptional long term growth for both them and you. Not to mention you can gain a reputation for being easily approachable and focused on solving the customer's problems. I may start kicking myself because I discontinued a service ($150 of work over six months and wanted the floor space for something else) that 2 of my existing customers have just started needing.

If I could find a, somewhat, local company that offered what Harold mentioned in the latter half of the first part of the quote I'd probably contact them for my web needs. I've seen very few web companies that offer those services (design, maintenance, long term marketing, etc) and give me the impression that they can do an adequate job. Most can do 1 or 2 things well while the rest get ignored.

[veritasvisions]

I just don't think you can quantify who's worth doing business with by how much in sales you think they're doing. Just like in the bar business you can't tell who is going to be a big tipper and steady customer by what you think they do for a living and how much money you think they make. Anyone can have the potential to be, or bring you the big hits, or to be a long time customer that bring in steady income.

I say this from experience. I have quite a few clients who have been with me since they were a start up and over the years have grown and now come to me for everything they do online (or tech related) from their first simple website to running long term social media and advertising campaigns and beyond. Especially if your services help them make more money.

They are also more consistent customers. To me $500 every now and then from someone who calls on me for everything, is just as important as one person who drops $10k for one thing. Those $500 every now and then people can end up being what pays the bills while you're trying to close bigger, one time deals, or will be an income stream when it's slow or locked up on a project for long periods of time and don't have the time to cold call for new money. Yea i agree with this. It all depends and it is not a good thing to discriminate bases on sales. Maybe that is something i am doing wrong. It is true that all companies operate differently and are different. Someone who is making 60k a year could drop 40k on a project to build his company. Someone that makes a million a year could bargain you down to the bare bones of a project with regards to money and be a nightmare because he/she has unrealistic expectations. I have had both types of clients.

[Harold Mansfield]

For me, it's also about if the money is worth it, or does it end up being more hassle that it's worth?

I like dealing with small to med businesses because they can make a decision and execute quicker. The larger the company, the longer it takes them to make a decision, the more people it has to go through, the longer it takes to close the deal, and the longer it takes to finish the job.

Is it worth spending 2 months to close a $10k deal that is then going to take 2+ more months to complete after all of the people it needs to go through before everyone is satisfied?
Or would I rather do 4 $2500 deals in that same time frame, have the money in hand for completed work, just racked up 4 stellar reviews, and now have 4 more clients to sell additional services to? I'd rather do the later because it's worth money. The price may be the same, but the value of the 4 $2500 jobs is MUCH higher.

Again, it depends on your business model. If all you do is $50k jobs then that's your market and you have to deal with the PIA factor, and the time frame in between jobs. Higher risk can definitely yield higher rewards.

I like everyone's money and over time have crafted services that allow me to get the $500 guy that I can finish in a day or 2, as well as the larger corporate client that takes a month to close, and could be continuing services.

I also hate bidding for jobs. Actually don't do it anymore. As soon as I hear "we're looking at a few companies", I'm out. Go with one of them. But that's my own issue with people wanting all of your ideas and then giving the project to someone else for less. I've seen it happen too many times in my own dealings with people. "This guy says he can do this thing that you do too (after we asked him about it) and his bid is lower than yours. If you can get down to his price, we'll send your bid to the final decision process"...yeah screw that. If my ideas are so great, I shouldn't have to lower my price to the level of the guy who didn't have them. Either you want to work with me or you don't.

You will NEVER be the cheaper company in this business. So competing on price is a losing battle if you live in the U.S. and need to make living in the U.S. money.

The thing about the smaller client is that he's loyal to you if you're truly helping him. He wants someone to work with long term that can help him grow. He doesn't have 20 managers making decisions and that need to be CC'ed in on every color change or font decision. He needs you to be his web and marketing department. To me that has more long term value.

The large company is going to go where ever they please based on who's in charge at the moment, and whether or not they're looking to cut cost. They are also far more demanding (to the small guy) and want to constantly low ball you over the threat of moving on to someone else who promises to be lower. Very few large companies respect the time of companies or service providers who they deem "smaller" than them.

Also, and here's the big thing, at the large company there's someone who's in charge that is supposed to be versed in what you are doing, and those are the people who waste your time making unproductive decisions...not because they are better, but because they have to look like they're making some decisions. You can't know more than them. And those people make you wish you had charged double the price because they get in the way of EVERY decision and drag the project out.

Sometimes it's not worth it.

In a perfect world you have the ability to do both. Big jobs for big profits, while keeping a stream of small jobs that pay the bills.

This is especially true if you provide a service like web design and some kind of online marketing. We're a dime a dozen these days and the large players are trying to take it all from us. You have to have a specialty that is hard to find, awesome service that is hard to find, great rapport with whoever is in charge, a lot of great referrals and projects where you can show results, or something proprietary.

[veritasvisions]

I don't think I can put enough emphasis on this. Sometimes getting in early with a smaller company can result in some exceptional long term growth for both them and you. Not to mention you can gain a reputation for being easily approachable and focused on solving the customer's problems. I may start kicking myself because I discontinued a service ($150 of work over six months and wanted the floor space for something else) that 2 of my existing customers have just started needing. I think this is a really great point.

[veritasvisions]

This is really great feedback, i am starting to realize the true value of this forum.

[Fulcrum]

Well said Harold.


I also hate bidding for jobs. Actually don't do it anymore. As soon as I hear "we're looking at a few companies", I'm out. Go with one of them. But that's my own issue with people wanting all of your ideas and then giving the project to someone else for less. I've seen it happen too many times in my own dealings with people. "This guy says he can do this thing that you do too (after we asked him about it) and his bid is lower than yours. If you can get down to his price, we'll send your bid to the final decision process"...yeah screw that. If my ideas are so great, I shouldn't have to lower my price to the level of the guy who didn't have them. Either you want to work with me or you don't.

You will NEVER be the cheaper company in this business. So competing on price is a losing battle if you live in the U.S. and need to make living in the U.S. money.

I think we've all had that. It wastes my time, their time, and everyone's money. I quoted one job for someone (gave my normal price) and they used that quote to beat up on their normal supplier (resulting in a minimum 40% discount). Makes me wonder why that competitor is doing all they can to keep me away.:rolleyes:

There's a few sayings in manufacturing and job shops:
1) Race to the bottom. I've gone so far as to tell a customer that if they wanted me to drop my price they needed to commit on the spot, prepay the full job, and receive delivery whenever I felt like dropping it off as this would be filler work and nothing else. I didn't get the job.

2) You can get the job done right, fast, cheap - pick any two. In my shop you can pick any two as long is it's right and fast. I don't work cheap.

[veritasvisions]

1) Race to the bottom. I've gone so far as to tell a customer that if they wanted me to drop my price they needed to commit on the spot, prepay the full job, and receive delivery whenever I felt like dropping it off as this would be filler work and nothing else. I didn't get the job. 1) Man, you'd always be better off passing on those clients. Some clients just don't get that we do this for a living and don't mind dragging you through the mud.

[Fulcrum]

1) Man, you'd always be better off passing on those clients. Some clients just don't get that we do this for a living and don't mind dragging you through the mud.

Don't kid yourself. These guys know what they're doing. They only care about the initial cost rather than the full lifetime cost so they can walk into a budget meeting and say "I reduced our new tooling cost by $xx". It's why I took as hard a stand as I did.

What's worse is when you agree to a net 30 term and the customer decides that a net 120 would be better (whenever we feel like paying). How about having a customer call after 120 days and attempt to renegotiate the final dollar amount knowing full well any more delay may possibly bankrupt the vendor (two large construction companies in my area are known for this yet are well connected and keep receiving government infrastructure jobs).

[Harold Mansfield]

There's a few sayings in manufacturing and job shops:
1) Race to the bottom. I've gone so far as to tell a customer that if they wanted me to drop my price they needed to commit on the spot, prepay the full job, and receive delivery whenever I felt like dropping it off as this would be filler work and nothing else. I didn't get the job.

I do this all of the time. I'll do it a little cheaper if you drop me a deposit today. Period. You can't have a week to let me know. This offer expires at 5 or it's back to the regular, full price that everyone else pays.


2) You can get the job done right, fast, cheap - pick any two. In my shop you can pick any two as long is it's right and fast. I don't work cheap.
Exactly.


Don't kid yourself. These guys know what they're doing. They only care about the initial cost rather than the full lifetime cost so they can walk into a budget meeting and say "I reduced our new tooling cost by $xx". It's why I took as hard a stand as I did.

Yes, they know EXACTLY what they're doing.

And then there's the small business that just jumps from service provider to service provider low balling everyone, and expecting to pay 3rd world labor rates on everything if he can find someone desperate enough.

1. The Wimpy Hamburger guy. Promises future work if you'll just give them a deal today.
2. The "I can send you so much business" guy.
3. The "I can get this cheaper, but I wanted to throw you some business" guy.
4. The "I could do it myself, I just don't have the time" guy.
5. The "It's not me, it's the boss" guy.

And many others.

That's why when I find people who are good to work with, pay on time, and respect my time the same way I respect theirs... I do everything I can to hold on to them.

[MikeSweeney]

Building leads and building relationships have always been a part of business. Cold calling is an option, and one that can be part of your marketing and/or sales process. But you really need to get in front of people and decision makers multiple times before they become customers. Some will never buy or convert to a customer. But, you still need to work that relationship. It may lead you to more leads... customers.

You do have to work your butt off.

[Fulcrum]

1. The "Wimpy Hamburger" guy. Promises future work if you'll just give them a deal today.
2. The "I can send you so much business" guy.
3. The "I can get this cheaper, but I wanted to throw you some business" guy.
4. The "I could do it myself, I just don't have the time" guy.
5. The "It's not me, it's the boss" guy.

And many others.

That's why when I find people who are good to work with, pay on time, and respect my time the same way I respect theirs... I do everything I can to hold on to them.

I've used the lines in #'s three and four. When I throw some business to guys it's because I want to keep them happy and my name in front of them. I know there will be a time when I'm in a bind and will need there help to get out of it.

As for the rest:
1) Receives no break on the first orders though an agreement could be reached where they receive rebates if volumes hit a certain amount within a certain time period
2) These guys I'm willing to spend some time on. Since I deal with physical products I would require a tour of the facilities to see exactly how much they are talking about.
3) I smile, do the work, shake their hand when we're done, and say "look me up first next time"
4) Similar to #3, but I usually ask them where their time is best spent. Sure they could save $30/hour but if they normally generate $100/hour plus on normal activities than they are loosing money.
5) Than let me speak to the boss.

Don't forget the cheap ones who ignore long term value over initial cost. I had a few vendors try to pull this one on me. They claimed to be able to save me over 50% on my consumable costs yet their product only lasted 3 weeks where my current vendor gets me over 4 months of life.