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NV#3 | Big Fish. Derren Brown. Icebreakers.
Business development strategies, qualifying prospects & leads, making meaningful connections, speed reading and more.
New Vertical
April 23, 2024
What an awesome launch! We posted on LinkedIn and sent out contribution invitations to over 1,000 SME owners and entrepreneurs for the launch, and saw an incredible response. We look forward to sharing these with you soon!
This edition is predominantly about business development and lead generation. Mainly because the conversations I’ve been having lately have touched on the topics I’m sharing with you. Want us to cover something in particular? Read this!
Stay Vertical!
Table of Contents
Featured Interview: Stephen Kenwright
Featured Interview: Stephen Kenwright
A business leader interview with co-founder of stratospheric digital agency, Rise at Seven, Stephen Kenwright.
Business Development
How to speed up cash flow
Cash flow is a prolific serial killer of new businesses, and having experienced the dreaded lull ourselves in our companies, we understand the feast and famine episodes. A client of ours recently explained they don’t have any issues with clients paying… but they take too long to pay, or often delay, and go over the agreed invoice term. We wanted to share our solutions, which may benefit your cash flow!
A report from 2022 highlighted:
54% of SMEs experience late payments
6 days is the average delay
20% of invoices are two weeks overdue
33% of invoices take more than a month
20% take 60 days or more to pay
Only 6% of manual invoices are paid within 30 days
Source: Genio
We initially operated our invoicing on a NET 30 basis, where our clients had 30 days to pay their invoice. This is the most popular for small businesses, so it made sense.
However, in the early stages when growth and speed is always on your mind, simply hoping a client pays sooner rather than later is not ideal. The first thing we did was make this a more attractive prospect by introducing a 10% discount for early payment. We use Quickbooks for accounting, so this is a manual process - but it worked wonders, and we had around 60% of our invoices paid within a day. Of course, we were losing 10% of our margin, and this would not be the most sustainable method going forward. We wanted to reduce that as much as possible.
So, at this point, we had 40% of our invoices subject to the usual back and forth of ensuring they were paid on time, and chasing any unpaid and outstanding invoices. This is a time suck for staff, and something we wanted to reduce.
After some research, we looked at invoice financing, when a lender uses an unpaid invoice as security for funding, giving you access to a percentage of the invoice’s value, sometimes within 24 hours. The problem here was that we had not been trading long enough for most of the offerings out there. That, and our credit rating was still being established.
Then we found Two. Two act as our invoicing partner - or a B2B “Buy Now Pay Later” - and allow us to access funds within a week, taking the full burden of credit and fraud. We’re not affiliated, but we highly recommend them.
Two.inc
When we invoice clients, we simply enter the company name in the Two portal, and find out if the client is eligible. We can then offer 30, 60 and 90 day terms on an invoice. Regardless of which option a client chooses, we get paid within a week. We shoulder all fees, which range from 5% to less than 8% for 90 days. Already, we have reduced all of our time in chasing invoices and reduced our costs. One caveat, however, is that Two requires a minimum of £10,000 in invoice value per month, and only registered companies will be eligible.
You can find plenty of options for B2B BNPL (Buy Now Pay Later) in the UK and USA, as well as lots of other options for invoice financing, but remember that some fees will be incurred. If you already have a discount in place for early payments, reducing this cost in your cash flow will be beneficial. If you are simply waiting on payments coming in like we were in the early days, though, this is a viable option to massively change your cash flow situation!
Business Development
Qualifying vs Building
As a business owner, you can’t often hear the word “No” without getting upset or precious about your idea. After all, you built your company and you know what you’re doing, right? Well, not always. Look at Richard Branson’s Virgin Brides if you need evidence. Side note: This Virgin blog post is a great example of the Pratfall Effect, which we discussed in NV#1, if you’re interested.
Sometimes, when you’re introducing something new to your business, you just want to forge ahead, and disregard anything negative because you are just so sure it’s going to work. From experience, I know this can be fatal, and I’m guessing there are a few of you reading this who know what I mean.
Think about it. If it takes you a month to actually bring the idea to life, then you launch it… and it flops… the pain of that is much worse than qualifying it early on. You will pour your heart into a new idea, as all entrepreneurs do, and launching with a fizzle is the worst feeling. Sure, we move on, and we adapt, but there’s a much better way.
A better process of qualifying your new idea/product/service is to literally ask the audience.
Back to the drawing board
The below advice may be teaching your grandmother to suck the proverbial egg, but hopefully this will help someone save time and money with their next big idea.
Planning and Measuring
Your first step is to plan everything out. Take a day off to do this properly without distraction. Drawings, sketches, mock-ups, you name it. Imagine you were going to show your entire idea to me from scratch. I need all the details, benefits - everything.
Now, you need to measure the time and cost of bringing the new idea/product/service to market. This will give you a figure to balance things. Let’s say it will take one month. That’s 30 days salary and time for you that must be accounted for, and for argument’s sake we will call that an even $5,000. On top of that, let’s say there will be a further $2,000 in costs. Cost: $7,000.
You now have a plan and it has cost you nothing but a day.
Qualify
Now, you need to set aside some budget for audience testing and qualifying your idea/product/service. There’s a few ways you can do this.
One way is by running Facebook ads or LinkedIn ads and allowing people to pre-order or at least register their interest. If you get pre-orders or people locking in their interest, you know it’s safe to spend time and money in launching. If it costs you $2,000 in ad spend and you qualify the idea, it has cost you significantly less than it would have, and you now know you will be making money after launch.
Need some proof this works? Colin McIntosh, Founder/CEO at Sheets & Giggles explains how it works in this interview:
Spend a few hundred bucks on Facebook ads to a landing page that describes what you’re building – are people giving you their email to lock in to the [..] price? No? Then you have to go back to the drawing board before you spend more money and figure out if your value prop isn’t good enough, if the product vision needs improvement, if your proposed price is too high, or if your marketing just sucks. The last thing you want to do is to spend $100,000 building something over a year of your life and then find out nobody wants it.
I genuinely think that people do the opposite of this because when you work on a product, no one can tell you no. In your mind’s eye, it’s going to be a huge success, and you can stay heads down on building it. You can envision a perfect future. The moment you begin selling and someone tells you no, that rejection stings worse than anything in the world, so I think people avoid that inflection point (sales) for as long as possible to avoid possible rejection while they work on building the “perfect” MVP.
Going headfirst into sales / gathering leads can actually really help you, though. You’ll gather a user base who can give you feedback on how they want you to build the product, and more importantly you can go to an investor and say, “I have 500 leads signed up who will give me money if I can give them this thing. Give me money to build this thing.” It’s a much stronger value prop than “I want to build this thing and here’s why it makes sense,” and it doesn’t cost you that much to do (costs far less than product development).
Another way is to ask a neutral - but brutal - audience: Reddit. Pitch your idea (without giving away too much if you can help it) in one of the business communities asking for advice on market fit and viability. This costs nothing, but you will get a LOT of helpful feedback (good and bad).
Some example subreddits: -
The plan is for someone to say “I’d pay money for that!”. Again, you’ve saved yourself time and money, but gained valuable supporting (or cautionary) data.
Business Development
Mastering B2B Sales in 2024
Having interacted with hundreds of B2B companies across dozens of sectors and verticals, there are a few common elements. The list is obviously extensive when it comes to sales, but these are pound for pound the most valuable.
Below are five tips that I can pass on from my experience with successful B2B sales teams, and after trawling through many, many LinkedIn “B2B sales influencer” posts that mostly showed well-groomed people staring wistfully out of a window (btw, what’s up with that lately?).
✅Know Your Buyers
Identify who's ready to purchase, who might need a little nudge, and who just needs to keep you on their radar. Tailor your outreach accordingly to turn interest into sales.