Amanda GomeThursday, 24 November 2011 15:03
I want to start selling but all I have is a concept. What should I do?
I am starting a new business and want to go out and start selling, but I am still building the concept and have nothing to show. How can I sell and how do I bridge that finance gap?
When you start a business there is that horrifying gap between paying bills and getting in your revenue, especially if you are paying staff and office costs.
It is essentials you do four things.
First you have to make sure you have enough cash to carry you through the difficult months. This means you have to be very realistic about when people might pay you.
I have often seen business plans that assume companies will buy products and services outside their buying cycle.
For example, European companies often do budgets in March so there is no use assuming that a large French company might do a deal with you in October.
Second, don't be afraid that companies can't see the vision if you have a great idea and can prove you will solve an important problem for them, a reputation in the marketplace so you are a known quality and a management team that gives them confidence you will deliver.
They will sign up to a concept but you have to have those three key elements in place if the price is right.
Thirdly, tempt them with an exclusive element. If they sign up with you then you won't go to their competitor. This can speed up the selling process.
Finally, do whatever you can to get the money upfront. Rather than wait for them to pay you month by month, offer a small discount if they pay you upfront which can help with cashflow.
Your biggest challenge once that money is in is to deliver beautifully while building the product, building the business and continuing to sell and market.
Amanda Gome is the CEO of online media company Private Media, which owns SmartCompany, StartupSmart, Crikey, The Power Index. Property Observer and Women's Agenda. She is also an adjunct professor of business at RMIT University.
Ask Amanda or any other StartupSmart mentor a question here.
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