Build a profitable business- the baby steps part 26

Don´t oversell. Sometimes there is a fine line between selling and outright lying. One of the smartest investors we know once told us that “all selling is lying to a certain degree”. While we do not agree completely with that statement we understand the point he is trying to make. We have been around long enough to encounter most types of sales pitches. And we´ve done our fair share of pitching as well. While we can honestly say that we have never intentionally oversold anything, we sure have been on the receiving end of numerous sales pitches that proved to sell a lot more than what was actually on offer. Before we go any further there is an important distinction to make here. There are two basic types of sales situations. You either sell something as a one-time event, which means you are probably not going to meet that particular customer ever again. Or you sell something over and over to the same customer, which means that you will build a long-term relationship with most of your customers. Sales people from the first group will in general be a lot more aggressive than sales people from the second group. It´s kind of a no-brainer. If they figure that they are never going to see the customer again they can unleash alll of their sales tactics without a second thought about it. On the other hand if you are expecting to meet with your customer again and again and again, overselling will result in a one-off spike in revenues but longer-term you will be dead.

We have certainly belonged to this latter group the better part of our lives. As a matter of fact we believe most entrepreneurs do to some extent. Most entrepreneurs rely on repeat business. And even if they don´t they need to build long-term relationships with a number of other business groups. And the buck doesn´t stop at the customer. Whenever you are dealing with a supplier, a retailer selling your product or another firm that you are doing business with you are employing some sales tactics. It comes with the territory. “Give us a better price on this shipment and we´ll order a 1000 more next time”, or maybe “if you start selling our product you are likely to earn more than if you continue selling your current product line, look at our numbers here…”. You get the picture. More or less every interaction you have as an entrepreneur involves at least a tad bit selling. Even at times when you are pointing out a minor flaw or limitation of your product you are really selling. Perhaps not the product, but you are putting yourself accross as an honest person with the highest of integrity. And in the long run people like to do business with people they like and trust.

Our advice is simple. Never oversell. Maybe just a little at times. But believe us when we say this: always deliver more than promised and never overpromise. If you can do that the selling part will virtually take care of itself in the future. Everybody wants to do business with someone who is honest and delivers more than expected. It´s rare too meet such an individual and you will soon be swamped by business without any increase in sales effort on your part. That is what typically happens when word gets around and you aqyure a solid reputation for being a good, honest businessman who tells it like it is. Our experience is that it is good long-term businessnever to oversell. And that´s exactly why we keep doing it.

There are exceptions to this rule. We believe it works best in Europe. Every time we do business in the US we have noticed that netrepreneurs in general are a lot more aggressive than their european counterparts. They are more likely to oversell than europeans according to our experience, and we have also been told by several US entrepreneurs that we need to step up our sales pitch if we are to make it on the other side of the pond. We most likely won´t change our ways, after all its always difficult to teach an old dog how to sit. But we are thankful for the advice. It has had a major impact on the way we do business in the US, especially how we respond to sales pitches over there.

So maybe if you are a US entrepreneur, you shouldn´t pay too much attention to what we say here. We have done too little business in Asia to be able to see a real trend there. Also there seems to be a difference between different regions within Asia. Our advice has worked well for us, but keep in mind that we operate mainly in Europe. We have customers that have been with us for the last 28 years. And such customers are the backbone of any successful business. At least if you ask us. There are other ways to conduct business and we are not saying ours is the only way to move forward. There are large cultural differencies when it comes to sales method and how well different sales approaches are accepted in various countries. This is only natural, and it is important to be aware of these differencies before doing business in another country. That way you can avoid becoming a victim of cultural differencies. We have been fooled on more than one occassion by overpromises and underdeliveries. Don´t let that happen to you. Always be suspicious when someone promises you more than you thougth possible. When it comes to sales the funfamental guidelines are simple:  If it seems too good to be true, it most probably is…

 

Don´t buy into the moral high ground. We know we are a bit cynical, But to some degree that is only a byproduct of doing business for a long period of time. When you´ve heard as much bs as we have you simply develop the most sophisticated bullshit-detector available to man. We can tell when somebody is lying to us. Not all the time. But most of the time. The tell-tale signs are usually there. At least if you know what to look for. In general you will pick it up in their eye movement. If that doesn´t work you can usually tell by asking an unexpected question. The answer will usually lie in the body reaction to your question. Forget about the actual words being spoken. They are irrelevent. Far too often they represent a smoke screen for what is really being said. And for a large number of incidents what is actually being said is the exact opposite of what is really happening. The reason for this is that it is always easier to adopt the moral high ground to justify your actions. A lot of the diversive repertoires that can be encountered across large corporate boardrooms or large corporations in general has been built around this principal. Adopting the moral highground is one of the very backbones of the machiavellian way of controlling a situation.

We strongly dislike it when people are trying to play out the moral high ground game. Yet, it has become such a widely followed move, we just felt we had to include it here. So what exactly is the moral high ground and what can it achieve? By adopting the moral high ground you can achieve so many favourable things in a very short period of time. First of all you can convey what you stand for, and show that what you are trying to accomplish is honourable. You are doing something out of kindness, integrity and solidarity to your fellow man. Money and power is irrelevant to such an accomplished individual as yourself. The fact that this is not true will probably be lost on the vast majority. Those who see things as they are will find it impossible to protest or raise their voices. Second, by adopting the moral high ground you can divert most of the attention from what is really going on. Paradoxically, by representing the truth, you can often times make sure that the truth does not be discovered. Third, by adopting the moral high ground you are making yourself a very tough target to attack. While you are untouchable you are allowing yourself to strike viciously at those who do not possess the advantage of the high ground. After all you are coming from a position of innocence and kindness.

So what is the moral high ground exactly? It´s claiming something in order to obtain a more favourable political position by swaying public opinion in your favour or creating a smokescreen to cover up your real motives. By far, the moral high ground statement we run acrross the most is “I´m not that interested in the money, really”. For instance, we have come across this statement when we were negotiating, when we were looking to hire somebody and when we were discussing a company buyout. What is always interesting on these occassions is that the individuals claiming that they don´t care for the money over and over are in general the fiercest negotiators out there. They fight for every cent. They discuss the non-monetary parts of the deal the least. They are all about the money. And since we have learned a long time ago that action,, not words are what an entrepreneur should pay attention to, we tend to get suspicious as soon as anybody starts their climb up the moral high ground.

We dislike the moral high ground game. We find it to be dishonest and highly political in nature. It´s not for us, and we would like to believe that we have avoided to play this card for the better part of our careers. We find that it is a card best played by politicians or within large corporations as an integral part of all the corporate bullshit flying around. Whenever someone tries to adopt a moral high ground position we get very suspicious and sceptical. As far as we are concerned you are always better of being honest about your intentions. We want to make money. We want to deserve the money and make it in an honest fashion, but other than that we are pretty much up to anything to make  money. We will get up earlier than most in the morning. We will work on weekends and late nights. We will give it our all when others are prepared to give up. But in the end we want the money. That´s why we are in business. We would like to make money while having fun doing it, but above all we want profits. And we are not ashamed of saying it. We feel strongly than any good business relationship should start with two honest parties telling it like it is. As soon as somebody starts playing the political game of adopting the moral high ground we lose interest. It is not for us.

Build a reputation. Warren Buffet once said that “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you´ll do things differently”. Building a reputation is not that hard. But it does take work, time and some effort. The upside can be difficult to pinpoint, but believe us it is there. So how do you do it? First of all you want to have some of the basics covered. Be on time. Always call back if you say you will. Honour any deadline. Don´t oversell. Speak the truth (as much as possible anyway, there are times and social settings when being too honest will kill you). Don´t oversell. Be sure to honour every commitment. Look for deals and negotiations with two winners. Underpromise and overdeliver. Be open and honest in everything you do.

There will be times when seemingly irresistable opportunities to stray from these simple guidelines will present themselves. Don´t do it. But if you do anyways, don´t sweat it. We each make mistakes from time to time. Nobody is perfect, and those who claim to be perfect are either fooling themselves, or they are trying to fool their surroundings. We stopped believing in innocence a long time ago. We all make mistakes. Some of us are just better at covering up than the rest of us. It is ok to make mistakes as long as you make sure you learn something from them and keep them from occuring again. And don´t beat yourself up about it. We are human, and humans sometime do make mistakes. Those who are eager to claim the moral high ground and point fingers at others are often doing it for other reasons. Whenever somebody tries to occupy the moral high ground we always ask ourselves what the real reason is. We are yet to come across a case where the  moral issue is the reason.There is always another reason- the real reason. But this real reason is seldom as flattering to the individual who has occupied the high ground, and therefore it ends up being buried beneath a sturdy shield of moral code. In most instances, the real reason has little to do with moral code and everything to do with machiavellian strategies or political schemes. Nevertheless, if you do mess up be sure to try to learn from your mistake, try to grow from it, and make sure you never repeat it for a second time. Learning from our mistakes is ultimately what makes us grow as human beings. And if we are lucky we only get to make each mistakes one time.

Plan your home office. Even if we are not that fond of meetings that doesn´t mean we don´t like structure. We are really big on planning. And we are even bigger on the practical application of those plans. We honour our deadlines. We fulfill what we have set ourselves out to do. We deliver the goods- every single time. And once we do, we generally reward ourselves in some way and then move on to the next item in our plan. But in order to get the work done you need a good place to work. Many entrepreneurs overdo it. particularly when starting out. They want a fancy office, and some of them even play up some premium cash to get hold of the office of their dreams. We can honestly say we did just the opposite. Today we have a fantastic office with an even more fantastic view. But back then we sat in a small dark office with no windows. And yet those were probably some of the most productive days of our lives. There is something about being in a spartan environment that just forces you to focus on getting the job done no matter what. We think it´s because there are no distractions. If your office is too accomodating it is easy to wander off with yoiour mind. But if you are sitting in that small dark windowless room we were telling you about, what else could you do but work? The whole atmoshere was about work. There was no time for leisure. There was only time to get the job done. In all honesty we did not choose that first office because we liked it that much. We chose it because that was the only one we could afford initially. And that was a good thing. When fate offers you a lemon you are forced to learn how to make lemonade if you want to make it. And that´s just what we did. We accepted our office, we even thrived in it. It was us against the big sharks sitting in their big offices right in the middle of everything. We were the underdogs. And we were out to prove that location isn´t all that for the resourceful entrepreneur.

I think the most important thing with that office is that it did not offer any distractions. It was not overly cosy. It was not a place where you would want to spend the night or eat your dinner (although we did both of those things on numerous occassions). It wasn´t exactly a dump, but it wasn´t anything you wanted to boast about to your friends either. But we got the job done their. And ultimately that´s what´s important. Cheap and not so fancy offices are a good thing as far as we are concerned. We know many entrepreneurs who had one of those and most of them ended up being quite successful (and eventually moved to much fancier offices) later on. The opposite is what you should be worrying about, especially if you are starting out. If your office is too fancy or you are working from a home office, that´s when some of the real troubles will start. A too fancy office not only costs you insane amounts of money, it can also make your mind wander away. You´re there to work remember. Fancy offices have too much distractions. One entrepreneur we know spends an average of 3 hours each day honing his pool game. Although we can attest to his skills, he throws away 3 hours each day on a distraction.

Having a home office can be a very rewarding experience. You get to work out of the comfort of your home, you save tons of time travelling to and from work and it´s a great change of venue for you if you are not doing it every single day. But there are some things you need to be aware of. We can tell you from our own experience that working from home can be an extremely unproductive experience. It all depends on how you arranged it all and what your life situation is like. First of all there´s the cave-man approach. You know, the small home office  being littered with old pizza boxes and jolt cola cans. And you sitting there in your underwear trying to get things done, only you are too tired because you spent last night watching that great movie on the telly. That´s one of the many pitfalls to avoid when it comes to working out of your home. You can´t run around in your underwear and expect to do a good job. At least not in the long run. We know this because we tried it. While it is certainly quite comfortable in the beginning to have a home office, after some time has passed by you are likely to experience a drop in productivity. The reason in most cases is that there are just too many distractions. Another big factor is that you will find it much harder to switch from relax mode to work mode in the comfort of your own house. Yet another factor is that your spouse or significant other does not fully eappreciate the fact that you are working. She figures you might as well do the dishes or take the dog out for a walk since you are home anyways.

While there are many pitfalls to operating from a home office, the good news is that there is a way around all of them. First of all you want to have a separate home office with a separate entrance. If having a separate entrance is not possible for you at least make sure the home office is separated as much as possible from the rest of your home. Our home offices are not only separated from our homes, they also have separate entrances and separate door bells. As far as a visitor is concerned, our home and our home office look like two completely separate entities. Another thing we beleive is very important is to treat a day working from your home office as any other working day. Go up, take a shower, shave or apply makeup, and get dressed. This might all sound a bit silly but our experience is that grooming is even more important when you are working out of your home. It´s as if you are signalling to your subconsious mind that you are about to get busy with important stuff. And you will feel more up to the task if you have taken the time to look and feel your best. Maybe there will be no one else there to notice, but you will know and that´s what really matters. If you are not paying attention to your grooming and whether or not you look presentable you will pretty soon start to get sloppy with your work as well. At least that´s our experience. Discipline is impportant to any business endeavour, but never more so than when you are working out of your own home. It is so easy to stay in that relaxed mode once you entered your home office, and just let the whole day slip by without getting any meaningful job done whatsoever. We know it´s really easy to drop your gard and become a bit lazy, even for the most disciplined ones among you. The complacency and ineffectivity just has a way of sneaking up to you. Whats starts out as getting a cup of coffee from your house, can easily end up in something completely different. After all you are at home, and your subconsious mind knows that you are always able to relax more when you come home. Be aware of these pitfalls and try to cut them short as soon as you notice them. Another thing that is usually quite a challenge for many entrepreneurs working out of the comfort of their homes is how to deal with the requests from their significant others. This is actually a bigger problem for many than you might imagine. But those of you who have tried working from a home office while your wife /husband and kids are around will understand immediately what we are talking about. You see, neither your kids nor your significant other realises you have a job to do. Your wife or husband may figure that since you are around, you might as well have a really long lunch with them, have a cup of coffee with them or take a walk with them. Or you might want to have a look at the plumbing in the kitchen. After all you are there and you have a great opportunity to do some of your daily choirs. And that´s just the stuff coming from your significant others. Your children will have even less understanding of the fact that you are trying to get some work done. They will take every opportunity to show you a drawing they´ve made or to simply give you a hug and ask you if you would like to play with them. What parent can deny them that? It´s important that you talk this through with your wife or husband if you want to be able to work out of your home. You need their backing and understanding, otherwise there is no way it´s going to work out well.

Working from home can be one of the most liberating and happy experiences of your professional life, providing that you make sure that you give yourself the best possible cirumstances. All that extra freedom you will be able to enjoy needs even more discipline, structure and the approval and collaberation of your spouse. If you can achieve all those things, you might have a great experience working out of your home. If not, you had better start looking for another office. We have tried to go both ways ourselves. We have fully equipped home offices with separate entrances. And we have a regular office as well. We spend most of our time on our regular office, but we often end up spending one day a week in our home office. And since we make sure we have less distractions when we are working from home we can actually use that one day every week to get some serious work done. Another  benefit of having a home office is that you can work from a proffessional environment during weekends, holidays or even when you catch the flu. Just make sure not to overdo it. We know entrepreneurs who spend all their “free” time working from their home offices. In the long run this will not be acceptable for the rest of the family, nor will it be sustainable for the entrepreneur. Being an entrepreneur is a marathon not a sprint remember.